Getting a Student Credit Card

When used responsibly, a student credit card can help you build credit history and effectively manage your debt obligations.

A student credit card is like a “starter card” with low credit limits, generally because college students have little income or credit history. Banks and major financial companies offer credit cards to students often as a means to earn their loyalty for future purchases, like a car or home loan.

Some online retailers or travel companies may require you to use a credit card to make purchases or reservations. You can use a student credit card to reserve a hotel room and purchase things like food, textbooks, plane fare and more.

Remember, a credit card shouldn’t be used to pay for school. That’s what financial aid is for.

Get more information on understanding your credit.

Understanding Student Credit Card Fees

You should always take the time to read your credit card agreement, as well as the finance charges, fees and benefits. If this is your first credit card, you’ll want to show the credit card terms to a parent or relative to make sure that they help you understand the terms of the agreement. In general, you will want to check the following items in your student credit card agreement:

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Finance Charges

  • What interest rate are you being charged and if you carry a balance, when and how often does interest accrue?

Grace Period

  • The amount of time you have to make your payment on prior purchases without accruing interest. This window is typically between 20 -25 days.

Annual Fees

  • Does your card charge a yearly fee for the ability to use their card?

Credit Limit

  • What is your spending limit? This would be the maximum amount of credit that is extended to you on this card. Many lenders have websites that allow you to check your balance.

Minimum Payment

  • What is the minimum payment you need to pay each month, based on your balance?

Late Payment Fees

  • When is your payment considered late and what are the penalties for late payment?

Other Fees

  • Are there any other fees that could be assessed, like if you go over your credit limit?

Interest Rate and Fee Changes

  • Can your interest rate and fee structure be changed? If so, know when this can occur and what notification you will receive prior to these changes.
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  • Will you be receiving any benefits for becoming a card member or based on your spending habits, or purchases?

Without significant income or credit history, you may find that you will not obtain a competitive interest rate on a student credit card. You might want to see if your parent can add you to a credit card with a lower interest rate.

Best Student Credit Card Practices

As a college student with a new student credit card, you need to understand how to use it responsibly.

When not used properly, credit card debt can be difficult to get rid of and stressful. When you spend on a credit card, you owe what you spend plus interest that has accrued, if you do not pay off the entire balance each month.

You will only be required to make a minimum payment on your balance every month, but it’s always advisable to only spend what you can pay off in full by the due date.

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It’s also a good idea to check your credit card statement frequently to make sure you are not spending more than your credit limit or outside of your personal budget.

You may incur penalty fees should you spend over your credit limit.

You also want to verify that you made all the charges on your credit card, and that there aren’t any incorrect charges by vendors or other unauthorized parties.

Find a Student Credit Card

Before you apply for a student credit card, make sure you do your research. Try to find the companies that offer the best credit cards for students, including low finance charges, no yearly fee, other fees, and benefits.

Remember, each time you apply for a student credit card, a credit report will be run.