The Best Student Credit Cards of 2024

Many students build credit during their time at school by taking out student loans. However, student loans can put a lot of pressure on you to pay down thousands of dollars in student loan debt once you graduate. For this reason, many people turn to student credit cards to build credit and have an additional way to make everyday purchases.

However, you should never just jump into applying for credit cards without doing your research first. If you are a student and have never had a credit card before, you probably have a lot of questions right out of the gate. For example, what exactly is a student credit card? What are some good methods for finding the best credit card for college students? Finally, what are the best student credit cards in 2024?

In today’s guide, we will answer all of these questions and more, but first, let’s take a look at exactly what the term “student credit card” really means.

What Is a Student Credit Card?

While a student credit card is not an official type of credit card developed by banks and lenders, it does refer to a general type of credit card for beginners. Essentially, a student credit card is an entry credit card for young people who want to build a positive credit history, gain experience using a credit card, and have an additional way to pay for everyday purchases as they arise.

In short, it is a credit card that is tailor-made for students and others who may have little or no experience with credit cards.

Since most students applying for their first credit card have no credit score, banking institutions and lenders will typically make the cards less desirable. More specifically, they will likely have the following qualities:

High APR

The APR of your credit card refers to the Annual Percentage Rate that you will pay on outstanding balances. While many loans have the option to get a fixed interest rate, almost all credit cards come with variable interest rates. This means that the amount you pay in interest can increase or decrease based on economic factors outside of your control, like the Federal Interest Rate. In any case, starting APRs for student credit cards tend to be higher (currently between 22% – 26%).

So, let’s say you get a student card with a 22% APR. This means that you will have to pay interest on any amount that is left on your credit card after your monthly payment date at a rate of 22% per year. For example, let’s say that you use your credit card and spend $300. Your minimum payment is $25. You make the minimum payment, leaving you with a balance of $275.

Once the next payment cycle has started, interest will be added to this amount. Interest is calculated daily, but you can get a rough estimate of what you will owe by taking the remaining balance, multiplying it by 1.22 (22%), and then dividing that number by 12.

You divide by 12 because interest is totaled up every month and added to your balance. In the example above, you could expect to have approximately $27.95 added to your balance. Therefore, it is better to pay down your credit cards in full every month to avoid paying interest.

Low Credit Limit

Since college students often do not have an income or may only have a part-time income, they present a greater risk to lenders. For this reason, student credit cards typically come with a low credit limit. The credit limit refers to the maximum amount you can put on your card at any given time.

A starter credit card could have a limit anywhere from $100 to $1,000. In any case, you want to avoid maintaining a balance that is more than 30% of your credit limit, as this can have a negative impact on your credit score.

As you build your credit, you can often call your bank or the credit card lending institution to request a credit line increase. Sometimes, lenders will automatically increase your limit if you have shown a streak of good financial behaviors. However, if you have a big purchase that you want to make on your card, lenders will often increase your limit to allow you to make it.

Minimal Rewards

Most credit card issuers and lenders use reward systems to get more people to apply for their credit cards. These can vary from cash reward credit cards (with benefits depending on the type of purchases you make) to travel rewards points you can use for your next vacation.

However, the rewards for student credit cards are typically lower or, in some cases, even non-existent. This is because student credit cards are almost exclusively used to build a credit history, and students do not need as much enticement to sign up.

That said, you may still get a rewards credit card as a student. It all depends on the lender and whether or not you have an existing credit score. However, don’t expect great cash-back deals or student rewards programs that will give you great benefits. Even if you do get a student credit card with a reward system, you always need to remember that these systems are designed to encourage you to spend more. So, don’t go chasing after rewards benefits if it makes you spend outside your budget.

Fees

Most credit card providers have ditched annual fees because they are simply not popular with consumers. However, when you are limited in the cards you qualify for, you may run into more fees. Annual fees can range anywhere from $25 to $250. So, if you do get a card with an annual fee, you will need to factor this into your budget.

Fortunately, there are still many student credit cards out there with $0 in annual fees. Some of these cards require you to spend a certain amount per year to avoid fees, while others charge no fees at all (regardless of how you use the card). In any case, it is always important to read the fine print to know exactly what, if any, fees to expect.

Annual fees are not the only fees college credit card owners need to worry about. If you plan on traveling, foreign transaction fees can quickly add up (unless you have a credit card that offers zero foreign transaction fees). In addition to foreign transaction fees, most credit cards have fees if you go over your credit limit, make a late payment, or otherwise fail to meet the terms and conditions of your credit card account.