College is an exciting time for many students. For some students, it’s their first time living on their own without parental supervision. Other students are simply excited to begin their academic journey where they can study the things they want to study instead of things they’re forced to study. For all students though, college is a time of meeting new people and making new friends.

Overall, college is also a time of figuring out how to balance academics, a social life and living on your own. The latter means you’ll most likely be figuring out how to create a budget and stick to it so you can afford basic needs and to pay your own bills.

For some students, budgeting and paying bills are both giant curveballs thrown into their college plans and they struggle to adjust. In some cases, applying for a credit card may be able to help them remedy certain aspects of their budgeting situation, but along with a credit card comes a whole new set of questions and concerns.

If you’re a college student who is searching for their first credit card, you’ll probably need a little help when it comes to finding the right card that will meet your specific student needs. Don’t worry though, with a little advice and tips on what to look out for, you’ll be on your way to choosing the perfect credit card for yourself in no time.

Don’t Be Afraid

You may be hesitant to apply for your first credit card and that’s completely understandable. It’s a big, scary unknown to jump into without an “adult” holding your hand through the process. But it’s time to take the plunge and just do it.

Is that not enough to persuade you to apply for a credit card?

Then you should know that 15% of a credit score is based on the length of your credit history and your credit history tends to begin when you open your first credit card (1). If anything, opening your first credit card during your freshman year of college can only help you four years down the line when you graduate—assuming you also make on-time monthly payments, but more on that later.

Your four-year credit history right out of school could help you apply for a car loan or rent a nice apartment instead of a cheap, scuzzy one. Having that type of credit length early in your adult life could even help you apply for a home mortgage in a few years when you’re ready to do so.

Even if you’re dragging your feet on applying for a credit card as a student now, know that it can help you nearly immediately once you’re out of college.

Create a Budget, Curb Your Spending Habits and Figure Out Where You Shop the Most

Whether you have your own job, you’re living off money from student loans or financial aid, or you’re earning an “allowance” from your parents, once you begin living on your own in college, you need to create a budget.

This budget is based on the money you’re bringing in weekly, bi-weekly, monthly, etc. Once you know how much you’re bringing in, you can allocate your funds to paying for tuition, books, bills, groceries or whatever else you need to purchase. This can also help you figure out how big of a credit card bill you can allow yourself to accumulate each month.

Why is that important? If you’re able to easily budget to pay off your entire credit card bill every month and make the payments on-time, your credit score will easily rise over time. A high credit score paired with a long credit history can essentially take you anywhere you want to go in life when it comes to purchasing big ticket items down the road post-graduation.

If you ignore your budget and struggle to make on-time monthly payments in-full on your credit card bill, your credit score will quickly find itself in the gutter. A terrible credit score, even if you have a long credit history, will hinder you from making big ticket purchases down the road.

This is also why it’s important to curb your spending habits when you create your budget. If you can reel in what you’re spending every month, paying off any credit card bills you may accumulate will be easy and you won’t have to worry about it.

Additionally, while you’re creating your budget, you should take note of the retailers you shop at the most (2). This could become important if you find those retailers offer their own store credit cards.

Also, other major credit card companies could reward you for shopping at those retailers. If you can earn extra rewards just for shopping where you normally do, why wouldn’t you choose to apply for that specific credit card? All this could help you easily decide which credit card application you should submit.

Use Helpful, Reputable Websites to Assist You in Your Credit Card Research

Naturally, when you realize you need to apply for a credit card, you need to do some research into what types of credit cards are available on the market. In theory, you could just visit each of the major credit card provider’s websites. While that’s not a wrong way to go about conducting credit card research, it’s a tedious way to do it.

A better and more condensed way to look up credit card availability is by visiting reputable credit card review websites such as NerdWallet (3), MyCreditCardGuru (4), and Intuit Mint (5). All three of these websites provide thorough evaluations of all types of credits cards offered in the United States.

You can conveniently find all the credit cards you could ever imagine on these websites, so you don’t have to hunt high and low for them on the Internet. These sites provide you with critical features about the cards that make them great and include features that may be detrimental to the cards. You can also read through extremely detailed reviews about certain credit cards that will help you make the right decision when it comes to selecting the perfect credit card for you.

Look for Student-Specific Credit Cards

Even if you use the credit card review websites to aid you in your search, you may be overwhelmed at the sheer amount of credit cards that are available. There are so many brands to sort through, so many details, so many rewards. Where do you even begin?

A great way to narrow down your search is by setting a filter to look at student credit cards only (6). Believe it or not, there truly are credit cards out there that are specifically tailored to college students and/or people between the ages of 18 to 21 (A.K.A. college-aged individuals).

There are also less application restrictions when it comes to applying for them. Usually, you don’t need a previous credit history to apply for a student credit card because these companies know you’re just beginning your credit journey today.

If you’re under 21 years old though, you’ll need to show proof of independent income–whether that’s from a part-time job or a full-time job–when you submit your student credit card application. This strict requirement is brought to you in part by the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 (2).

If you don’t have your own independent income, that’s okay. You can most likely still apply for the student credit card with a co-signer such as a parent or a well-established older sibling. A co-signer is essentially just assurance to the credit card company that your credit card bill will be paid on-time every month, whether the payment comes out of your bank account or your trusted co-signer’s account.

Most student credit cards allow for co-signers, but there are some that do not, so make sure you read the fine print on if it’s allowed.

If co-signing isn’t an option, you could also be added as an authorized user onto someone else’s credit card, such as a parent’s credit card or a well-established older sibling’s credit card. You would still receive your own credit card with your name on it, but both parties are equally responsible for whatever purchases are made, regardless of who made them. So, it’s still important to make full, on-time monthly payments.

Look for Specific Credit Card Features

Most student-specific credit cards contain helpful features that will set up students to succeed if they use their cards responsibly.

Credit Bureau Reporting

One of the important features to look for with student credit cards—and with any credit card in general—is it needs to report to all three major credit bureaus. These three bureaus are TransUnion®, Equifax and Experian®. Assuming you make your payments in-full and on-time every month, your credit score will slowly rise over time as these three bureaus receive more good data about you.

No Foreign Transaction Fees

Another specific feature that college students find very helpful in a credit card is if the card offers no foreign transaction fees. At first, this may seem like an odd feature to be looking for in a student credit card, but this feature is especially helpful to students who are planning on studying abroad. If you can pick up a student credit card that will allow you to use it on your American campus as well as your international campus, then why wouldn’t you want to go with that specific credit card?

No Annual Fee

Another important feature to look for in a credit card for students is the card has no annual fee. This can help an already strapped-for-cash student be able to afford to own a credit card since they won’t have to worry about having the extra money once a year to pay the annual fee.

Cash Back Rewards

Students love earning rewards. Therefore, a major feature to look for on a credit card is the ability to earn cash back rewards for making purchases on the items you need. Some student-specific credit cards will give you additional cash back for making school-related purchases, so it’s important to read the details on what cash back opportunities are offered.

Intro APR and On-Going APR

If you’re not familiar, APR stands for annual percentage rate. This rate represents how much interest you’ll pay on your credit card bill balance if you don’t pay off the total bill in-full (7). As alluded to in the name, this is a percentage, so the higher the APR percentage is, the more you’ll be paying as a penalty if you don’t pay off your bill in-full.

If you can find a student credit card that offers 0% APR, you’ll definitely want to apply for it because if you ever have a carry-over balance, you won’t be penalized for it. You’ll just have to pay off the remaining balance, or at the very least, the minimum amount due each month.

If you can’t find a card with 0% APR, you’ll want to at least find one offering an intro APR of 0%. Intro APR typically only lasts for a set period of time, such as for six months, 12 months or even as long as 18 months.

After the intro APR has expired, typically the on-going APR jumps up to a range between 24.99% to 34.99%, though this can greatly vary.

Sign-Up Bonuses

To stand out from the competition, some student credit cards offer a sign-up bonus for joining. Some bonuses could be as lucrative as $50 or $100, but you’ll have to meet certain requirements before receiving the bonus.

The requirements vary by credit card company, but they sometimes involve spending a certain amount of money in your first month or keeping your account active by making purchases for the first three months you own the card.

Only Select One or Two Credit Cards to Open

During your student credit card research, you may come to find you want to apply for more credit cards than just one. You may have found five or six or seven credit cards that sound enticing and could meet your needs.

Do your best to restrain yourself from applying to them all.

Your best bet is to apply for one or two credit cards. If your applications are accepted for both cards, that’s great. There’s nothing wrong with having two credit cards open. But if you apply for an absurd amount of cards and your applications are all accepted, you may run into multiple issues. It could negatively impact your credit score due to all the credit inquiries (if applicable).

If you signed up for all these cards just to get the sign-up bonuses, you may not get them all if you don’t meet specific purchasing requirements on them. Even if you do meet all the purchasing requirements, you could happen to forget a due date on one of the payments. Not making a payment on-time will severely damage your credit score, so you’re setting yourself up for failure.

Not to mention, the more credit cards you have open, the more likely one of your credit card numbers could be stolen or you could lose one of the physical cards. To avoid those situations, it’s best to only apply for one or two student credit cards and go from there.

Alternate Options to Credit Cards

If you find yourself in a situation where your application for a credit card is not accepted, don’t panic, because there are alternate options available to you.

As mentioned before, you could have a trusted co-signer join you on your next application to ensure monthly bills will be paid on-time. You could also be added as an authorized user to a trustworthy person’s already existing credit card account where you’ll be jointly responsible for any accumulated debt racked up on the card from purchases.

Additionally, you could also opt to apply for a secured credit card instead of a student credit card or other major credit card available (6). With a secured credit card, you pay a security deposit up-front for the card. Typically, this security deposit isn’t a crazy amount of money; it normally ranges between $500 to $1,000. This amount then sets your credit limit. If you can demonstrate responsible secured credit card usage for a set amount of time, you’ll eventually be able to get your deposit back.

While not as ideal as a traditional credit card, applying for a secured credit card can help you build your credit score over time with responsible usage and extend the length of your credit history as well.

Jumping into the credit card game for the first time as a student can be a very uncertain and scary situation, but knowing what steps to take to find the perfect card and what to look for in a good student credit card can help you out in your search.

 

Additional Resources

(1) NerdWallet – Common Student Credit Card Mistakes to Avoid

(2) BankRate

(3)NerdWallet

(4) MyCreditCardGuru

(5)Intuit Mint

(6)NerdWallet – Choosing a Student Credit Card

(7) – Money Under 30