Best Student Credit Cards: Credit Options for College Students
The Importance of Student Credit Cards
Hello Friends, as a college student, it may seem overwhelming to start building your credit. However, having a good credit score is important for future financial endeavors such as applying for a car loan or a mortgage. One way to start building credit is by obtaining a student credit card.
Having a student credit card can be beneficial for managing expenses, building credit, and earning rewards. It allows students to establish a credit history from an early age, which can positively impact their credit score in the long term.
Factors to Consider When Choosing a Student Credit Card
When choosing a student credit card, there are a few factors to consider. The first is the interest rate. Students should look for a card with a lower interest rate to avoid accruing too much debt.
Another factor is the credit limit. It’s important to choose a credit limit that is within your budget and ability to pay off. A higher credit limit can be tempting, but it can also lead to overspending and a higher debt balance.
Rewards are also a factor to consider. Some student credit cards offer cashback rewards or points that can be redeemed for various items. Students should choose a card that offers rewards that align with their spending habits.
The Best Student Credit Cards in 2021
There are several student credit cards available, and it can be overwhelming to choose the best one. Here are five of the best student credit cards in 2021:
- Discover it Student Cash Back: This card offers 5% cash back on rotating categories and 1% cash back on all other purchases. Additionally, the card offers good grades rewards, where students can receive a $20 statement credit each year they maintain a GPA of 3.0 or higher.
- Journey Student Rewards from Capital One: With this card, students earn 1% cash back on all purchases. For the first five months, students can earn a higher cash back rate of 1.25% when they pay on time. Additionally, there are no foreign transaction fees.
- Citi Rewards+ Student Card: This card offers 2X ThankYou points at supermarkets and gas stations for the first $6,000 per year and 1X ThankYou point on all other purchases. Additionally, the card rounds up to the nearest 10 ThankYou points on every purchase.
- Bank of America Travel Rewards for Students: With this card, students earn 1.5 points per dollar spent. These points can be redeemed for travel, statement credits, or cash back. Additionally, there are no foreign transaction fees.
- Deserve EDU Mastercard for Students: This card offers 1% cash back on all purchases. Additionally, it offers a $59 annual credit towards Amazon Prime Student after making five purchases within the first three months.
The Benefits of Student Credit Cards
Student credit cards come with many benefits. One of the biggest benefits is building credit history. By using a student credit card responsibly, students can start building a credit history, which can positively impact their credit score in the long term.
Another benefit is the ability to manage expenses. Student credit cards can help students keep track of their expenses and ensure they stay within their budget.
Furthermore, student credit cards often come with rewards programs, allowing students to earn points or cash back on their purchases. These rewards can be redeemed for various items, such as travel, statement credits, or even cash.
Risks of Student Credit Cards
While student credit cards can be beneficial, there are also risks that students should be aware of. The biggest risk is overspending. Students may be tempted to spend beyond their means, leading to high debt balances and interest charges.
Another risk is the potential for fraud or identity theft. Students should be cautious when using their credit card and ensure they only provide their information to reputable companies. They should also monitor their accounts regularly to detect any unauthorized purchases.
Tips for Using Student Credit Cards Responsibly
To ensure that students use their credit cards responsibly, here are a few tips:
- Set a budget and stick to it
- Pay off the balance in full each month to avoid interest charges
- Monitor the account regularly for any unauthorized charges
- Avoid using the credit card for unnecessary purchases
- Choose a credit limit that is within your budget
- Don’t share your credit card information with anyone
Building Credit with Student Credit Cards
Building credit with a student credit card can be beneficial for long-term financial health. By using the credit card responsibly – paying on time and in full each month – students can establish a credit history and improve their credit score.
A good credit score can lead to better financial opportunities in the future, such as lower interest rates on loans and credit cards. Additionally, it can make it easier to gain approval for various financial endeavors, such as renting an apartment or purchasing a car.
In conclusion, a student credit card can be a valuable tool for college students to manage expenses, earn rewards, and build credit history. When choosing a student credit card, students should consider factors such as the interest rate, credit limit, and rewards program.
Students should also use their credit card responsibly, setting a budget, paying off the balance in full each month, and avoiding unnecessary purchases. By using a student credit card responsibly, students can start building a solid credit history and improve their financial health in the long term.
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