If you’ve noticed that there are credit cards geared specifically toward students, you might have wondered: Do students really need their own special credit cards? While it’s not necessary, student credit cards can be helpful to younger adult consumers, who tend to have a limited credit history and therefore may have difficulty getting approved for a standard credit card. Many student cards come with lower credit requirements, and less competitive rewards and interest rates. In some cases, student credit cards may even offer small incentives to encourage responsible behavior such as making on-time payments or even getting good grades.
Is It Time to Get a Credit Card?
Deciding to open a new credit card account is an important decision that should not be taken lightly. Students and other young adults may have little experience managing a credit card account, which can be a recipe for a credit disaster — by incurring too much debt or missing payments. At the same time, the rewards of responsible credit card use are undeniable. First, students can have the security of using a credit card as a method of payment, which is unmatched by cash, checks or even debit cards. In addition, students have the opportunity to build a strong credit history before they graduate, giving them a better foundation for when they apply for an auto loan or a mortgage in the future. Also, a good student credit card can provides valuable travel insurance and purchase protection policies, that later can of which can be important for students who travel home frequently from school. And like other credit cards, student cards can also offer rewards in the form of cash back or points that can be redeemed for travel purchases.
Picking the Best Student Credit Card
When you’re looking for a good card, it’s important to consider many factors. The best student credit cards will combine low rates and fees along with benefits that can be useful to students. All the student cards we looked at have no annual fee, but some also have no foreign transaction fees, no penalty interest rate, or even an automatic waiver of an occasional late fee. Other key features include alerts via text and email, as well as credit score tracking. Finally, it can always be good to earn some rewards or a have a short promotional financing period, although both of these features should be treated with caution as they may create an incentive to overspend and carry debt. However, when used responsibly — keeping a low balance or paying it off every month — these can be useful features.
Students who are getting ready to apply for their first credit card may also want to pull their credit reports and credit scores to see where they stand. Even if they have a limited credit history, it’s important to see what’s being reported and to check for errors or signs of fraud. They can get their free annual credit reports every year through AnnualCreditReport.com, and they can get two of their credit scores for free, updated every month, on Credit.com.
For this year’s Best Student Credit Cards, we reviewed many cards to find the top offers out there. After careful consideration, here is the winner.
Discover it Chrome for Students
We chose the Discover it Chrome for Students as this year’s Best Student Credit Card because it now offers even more benefits and rewards that users may find valuable.
For each school year that cardholders have a 3.0 GPA or higher, Discover offers students $20 cash back. Cardholders can earn 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter, and 1% on all other purchases, and Discover doubles the rewards earned at the end of the cardholder’s first year of membership. In terms of features, the card has a “Freeze It” function that offers a way to temporarily turn off the credit card.
As for the costs, the standard interest rate is 12.99%-21.99% — depending on the applicant’s creditworthiness – and six months of interest-free financing on new purchases. This card carries no annual fee and no foreign transaction fees. The first late payment fee is waived, and there is no penalty interest rate.
Click to see the runners-up for Best Student Credit Cards.
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This article originally appeared on Credit.com.
This article by Jason Steele was distributed by the Personal Finance Syndication Network.
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