As a young student, just starting college, there is a good chance you haven’t established a credit score or credit history at this stage of your life. However, establishing a credit history isn’t something you want to put off. Once you leave home, you’ll want to rent an apartment, buy a car or even get a better job. Unfortunately, all of these goals are affected by your credit history. Therefore, it only makes good sense to establish a credit history with credit cards for students as soon as possible.
How Students Can Apply for Credit Cards
Even though you may be a young adult, there is a good chance you’ve already opened a checking account at your local bank branch. If so, explain to the bank personnel that you are seeking a credit card to build credit. They’ll be happy to help you.
Getting a relative like your parents or another responsible party to co-sign on a credit card with you is an excellent way to be approved for a card. Cards list you as the account holder, so payments are posted to your credit history at anyone or all of the three main credit bureaus.
Student Credit Cards
Utilize the internet to search for credit cards specifically designed for students with no credit. You’ll find a huge number of companies offering student cards. Most of the offers will have lower limits until you prove you are responsible and make payments on time. However, it’s a good way to start building credit.
Secured Credit Cards
Consider secured credit cards, which require you to put down a cash deposit into a charge card account. In essence, your deposit secures the card in case you should fail to make payments. You are free to charge up to your limit just like a regular charge card. Many charge card companies refund deposits after a certain time limit and increase card limits once you’ve proven yourself to be reliable.
While researching credit cards to build credit, verify the cards you’re considering report to one or more credit bureaus. If payments aren’t reported, you can’t build a credit profile, which is your goal.
Credit Cards for Students
Discover it for Students
Many credit card companies like Discover are keenly interested in helping young people to establish their credit because they know they will eventually get good jobs with spendable cash. Overall, Discover offers students a pretty good deal.
- No annual cred card fee.
- Keeping your GPA at 3.0 or higher can result in $20 cash back per year up to five years.
- Special cash back offer. Discover matches the total cash back earned in a given year for each new student with a Discover it card.
- Earn cash back rewards of 5 percent on Amazon.com, restaurants and gas stations each quarter. All other purchases can earn rewards of 1 percent.
- Rewards won’t expire. You are free to redeem them any time for any amount.
- Not responsible for unauthorized charges.
- Free FICO credit scores included in monthly statements.
- Capital One Secured MasterCard
- Regularly reports to all three major credit bureaus.
- Requires a deposit of $49 with an initial credit limit of $200, depending upon your credit.
- Easy account management 24/7 using mobile applications, phone or online access.
- Secured MasterCards are accepted at millions of places worldwide.
- No annual fee.
- Accepts applicants with bad credit.
- Variable APR 24.99 percent.
Building credit takes time. Don’t jump at the first couple of credit card offers you see. Spending a little more time researching rewards, minimum payment amounts and interest rates is important when establishing your new credit profile.