For any college student using a credit card, no annual fee and great rewards are two key, must-have features.
Credit card companies are starting to offer incentives to younger card holders, especially students. These include additional rewards for paying your purchases on time and rewards for good grades.
Along the way, the cards are providing incentives to help students learn to spend responsibly and build a solid credit history at the same time.
Christine Forman, a marketing director for Discover, had this advice for students, “As a student applying for a credit card, you should be focused on using it responsibly to build your credit history. Handling credit responsibly now could help you to get lower interest rates in the future.”
An alarming statistic reported by a 2017 U.S. News Survey found that 44.2% of students aren’t taught how to use credit cards before getting one. Credit card companies are now offering various forms of education on responsible use of credit cards.
Let’s jump into the line up for some of the best student cards when it comes to rewards.
Discover it® for Students
This might be one of the best student credit cards available right now. A unique feature is that Discover will pay students $20 at the end of the year if they maintain a 3.0 GPA. Students can take advantage of the offer for up to 5 years. Learn more about this offer here.
Carrying a monthly balance means incurring interest charges. The same U.S. News survey from above also found that 31% of students carried a monthly balance over the past year, 6 or more times. This means students aren’t paying off their balance each month and allowing it to accumulate interest.
Having an incentive to pay your credit card on time every month can help build positive financial habits. But we’d like you to take it one step further and pay your balance off each month to avoid interest charges and accumulation of debt.
When you’re learning how to manage a credit card, accidentally missing a payment isn’t uncommon. This can have a number of negative side effects that can range from an increased APR, late fee, negative mark on your credit, and reduced grace period. But not with the Discover it® for Students.
Discover allows students to pay late without any impact on their APR. Additionally, there isn’t any fee for first late payment.
This card comes with a 5% cash back rewards program, which rotates through different categories. For all purchases that aren’t on a current 5% category, students earn 1% cash back.
Knowing your FICO score means knowing the health of your credit. You’ll receive your updated FICO score with each monthly statement for free.
Security is always a concern and this card goes the extra mile when it comes to ensuring your protected. By activating alerts, you can be notified if your social security is found on any number of risky websites. Additionally, you can be notified when new accounts show up on your Experian credit report.
Dealing with fraudulent charges can be a time consuming hassle. The Discover it® for Students card comes with $0 Fraud Liability. Meaning, you aren’t responsible for unauthorized charges. As well, you can freeze your account right from the Discover website or mobile app.
A similar card offered by Discover is the Discover it® chrome for Students. The main difference is that this card offers 2% without rotating categories. Learn more about this card here.
Here’s a summary of the differences from Christine Forman, “Discover has two student cards available—Discover it® for students and Discover it® Chrome for students—that both offer reward programs,” says Forman. “The Discover it® chrome card for students gives 2% cash back at gas stations and restaurants up to $1,000 in combined purchases each quarter automatically and 1% cash back on all other purchases, while the Discover it® card for students earns 5% cash back in rotating categories each quarter up to the quarterly maximum when activated and 1% cash back on all other purchases.”
Also, did we mention there’s no annual fee. You can learn more here.
Journey Student Credit Card
The Journey Student Credit Card is available from CapitalOne and boast a nice rewards plan. If you spend $500 per month, it will result in an annual $75 cash back. CapitalOne even includes a calculator on the credit card website so you to determine the reward amount based on monthly spending.
Cash back rewards are 1% of purchases. However, you can boost your cash back to 1.5% simply by paying on time.
The card doesn’t have an annual fee and includes CreditWise, which provides unlimited access to your credit score.
Citi ThankYou® Preferred Card for College Students
Unlike the other two cards, this is a points based card. The Citi ThankYou program offers a wide range of options for using your points. Compared to the cash back cards, there’s a few reasons why you might choose this card.
If you spend $500 (a very practical feat) within your first 3 months, you’ll earn 2,500 bonus points. Another reason is an intro offer for 7 months of 0% APR on purchases.
2X points are earned on dining and entertainment related purchases. All other purchases earn 1X points. There aren’t any limits on points and they never expire.
Categories that you can redeem points for include:
There’s no annual fee and the card includes EMV Chip Technology for enhanced security.
More than ever, students have a few great credit card options available to them. We’ve outlined two that provide cash back and one based on points. You really can’t go wrong no matter which card you choose.
Picking out the right credit card to maximize rewards can be tough. That's why we think the Discover it® for Students is a great card - you get the most flexibility for the rewards that you're looking to use.
Remember, always treat a credit card like a debit card and pay off your balance in full each month! You don't want to bury yourself in credit card debt to simply take advantage of a little bit of rewards.