Best student credit cards: Fall 2016

Kelly Dilworth
Personal Finance Writer
Specializing in new trends in credit

Our reviews and best card recommendations are based on an objective rating process and are not driven by advertising dollars. However, we do receive compensation when you click on links to products from our partners. 

Learn more about our advertising policy.

Our reviews and best card recommendations are based on an objective rating process and are not driven by advertising dollars. However, we do receive compensation when you click on links to products from our partners. Learn more about our advertising policy

 

If you’re in school and using only cash or a debit card to pay for purchases, you may benefit from a student credit card with cash back, rewards and perks tailored to appeal to a generation that is cautious about credit.

These student cards generally have slightly lower interest rates (if you don’t carry a balance), tools to help students learn about credit, and rewards geared toward campus life (such as higher cash back on gas and restaurants). Some cards even cut students a break when it comes to missed payments and other credit errors.

A student credit card, when used responsibly, can help a student to build credit early, so that down the road it’s easier to qualify for an affordable mortgage, a car loan with favorable terms or a low interest rate credit card with valuable perks.

To help students pick the best card, CreditCards.com rounded up the best cards in the student card category and asked a panel of judges to rate the CreditCards.com staff’s top three picks.

Judges for the Best Student Cards of Fall 2016 were personal finance expert Michelle Schroeder-Gardner, Kiplinger’s Personal Finance contributing editor Lisa Gerstner, personal finance expert and Gen Y advocate Stefanie O’Connell, CreditCards.com Editor-in-Chief Daniel P. Ray and CreditCards.com senior industry analyst Matt Schulz.

And the winners of the best student card competition are…

FIRST PLACE: Judges said the Discover it Chrome for Students card was the clear standout because of its generous cash back program and student-centric perks -- including a $20 cash back bonus when cardholders maintain a 3.0 grade point average.

“Discover it Chrome for Students is a great credit card for students,” says personal finance blogger Michelle Schroeder-Gardner. In addition to rewarding students for maintaining good grades, as a Discover card, Chrome for students has no annual fee, so the cost of credit is kept affordable, she says.

Discover It Chrome for Students offers flexibility, some leniency, and solid rewards and perks to boot.

— Lisa Gerstner
Contributing Editor, Kiplinger

The Discover it Chrome card’s substantial amount of cash back – especially for first-year cardholders – also was noted by judges. Cardholders receive 2 percent cash back on the first $1,000 that they spend per quarter on restaurant and gas station purchases and 1 percent cash on everything else. Discover also doubles rewards earnings at the end of the card’s first year.

As long as students avoid paying interest by paying off their purchases in full each month, “students can pocket some free cash when they use the card to pay for pizza, to fuel up for a weekend drive home and for other common purchases,” says personal finance journalist Lisa Gerstner.

And with Discover, cardholders can redeem their rewards in any amount. “Some other cards require you to rack up $25 or so in cash back before you can collect,” Gerstner says. Easy redemption is especially helpful for college students, who aren’t likely to charge as much as, say, a family of four, she notes.

Judges were also impressed by the card’s student-friendly terms and forgiving stance toward occasional late payments. The Discover it Chrome “offers flexibility, some leniency and solid rewards and perks to boot,” Gerstner says.

“This is the perfect starter card for busy students,” says CreditCards.com Senior Industry Analyst Matt Schulz. If you accidentally forget a payment, “you won’t get stuck with a fee the first time you’re late paying a bill.”

You also won’t get slapped with a penalty APR, Gerstner adds. “Skipping payments is never a good idea, but Discover’s forgiving policy can help a student from getting in over his head if he makes a mistake,” she says.

Students also get Discover’s free Credit Scorecard, an important tool for cardholders who are just starting to learn how to use credit. By letting students track their FICO score and learn what affects their score, Discover is helping students build a stronger credit history, judges said.

“As great as it is to rack up rewards and bonuses, the most important reason for using a college credit card is to build credit,” says personal finance expert Stefanie O’Connell.

Another perk of the card: “No foreign transaction fees also make this card an attractive option for students studying abroad,” O’Connell adds.

Drawbacks: The Chrome card’s 13.99 percent to 22.99 percent APR is on the high side, so be careful about charging more than you can afford. If you plan to carry a balance, you may want to choose a lower rate card.

SECOND PLACE: The Wells Fargo Cash Back College Visa came in second in the best student card contest, with our judges citing the card’s lower interest rate and free budgeting tools for new borrowers.

The lowest interest rate offered on the Wells Fargo Cash Back College Visa card – 11.9 percent – is better for students than what’s offered by many competitor cards, and Wells Fargo doesn’t charge a penalty rate. Judges said this makes the card a smarter – and less costly – choice for students who need to carry a balance or who may occasionally forget a payment.

With Wells Fargo, student cardholders also get a visual spending report and budget tracking tool. In addition, the bank’s website and app offer educational articles that explain how to build savings and responsibly wield credit.

The Wells Fargo student card’s generous cash back on everyday purchases in the card’s first six months is another plus. For example, cardholders receive 3 percent cash back on gas, grocery and drugstore purchases and 1 percent cash back on everything else. But after the promotional period ends, cardholders earn only 1 percent cash back on all their purchases.

Drawbacks: The APR for the Wells Fargo card varies. Some students, for example, may receive an APR as low as 11.40 percent. Others, however, may be offered an APR as high as 21.9 percent.

“Students have been rightfully wary of credit cards,” says CreditCards.com Editor-in-Chief Dan Ray. “They used to be the Venus’ flytrap of the lending world, with sticky sweet attractions hiding a deadly trap.

“The roughest edges were sanded down by 2009's federal credit card reform law,” Ray says. “But for someone new to credit, credit cards are still potentially risky tools.

“I put the greatest emphasis on cards that help students to not screw up. Rewards are nice, but for someone new to credit, forgiveness for rookie mistakes are more important,” he adds. “Viewed through that lens, one card is best. The Wells Fargo College Cash Back Visa is best because of its student-friendly features that offer both education and forgiveness for rookie mistakes.”

THIRD PLACE: The BankAmericard Cash Rewards Credit Card for Students -- with its significant amount of cash back – finished in third place in the best student card category.

The BankAmericard’s cash back could come in handy for cash-strapped students. The student card includes 2 percent on grocery store and wholesale club purchases and 3 percent cash back on gas purchases (up to a maximum of $2,500 in spending per quarter). Cardholders also get 1 percent cash back on regular purchases and a 10 percent loyalty bonus if rewards are redeemed in a Bank of America savings or checking account.

Drawbacks: The student BankAmericard’s terms aren’t nearly as consumer-friendly as some of its competitors. For example, Bank of America charges a 29.99 percent penalty APR if cardholders miss a payment and a $37 late payment fee. In addition, the card’s APR range of 13.74 percent to 23.74 percent is relatively high compared to other cards.

How the best cards were chosen

This is the first year that CreditCards.com has held a contest for best cards in their class. To help choose the best cards for the student card category, the CreditCards.com staff rated cards through its credit card reviews program and nominated the top three cards as finalists.

A panel of five judges -- including personal finance experts and two members of the CreditCards.com staff -- were asked to independently judge the three finalists and rank them in order of preference. The card with the best average rank was chosen as the winner. 

 

Applying for your first card?

If you’re new to credit and are having a hard time getting approved because you don’t have a traditional credit score, don’t sweat. There are credit-building steps students can take to help them get approved for their first card. If a parent or other family member is willing to let you use their card, ask if you can sign on as an authorized user. That will help build your credit history over time and make it more likely that banks will eventually trust you with your own card. Or you may want to consider a secured card that’s easier to get. 

Visit our help section for more tips

 

See related: 10 ways students can build good credit, Top 10 ways students ruin their credit, When no credit history leads to card rejection

All best credit card stories are prepared by CreditCards.com staff. Opinions expressed therein are solely those of the reviewer and have not been reviewed or approved by any advertiser. The information, including card rates and fees, presented in the story is accurate as of the date of the story. Check the credit card terms and conditions link on the issuing bank’s website for the most current information.


All best credit card stories are prepared by CreditCards.com staff. Opinions expressed therein are solely those of the reviewer and have not been reviewed or approved by any advertiser. The information, including card rates and fees, presented in the story is accurate as of the date of the story. Check the credit card terms and conditions link on the issuing bank’s website for the most current information.




About this Award

CreditCards.com’s Best Credit Cards awards program brings together prominent industry experts and journalists to choose the best credit card within a monthly category. Our editorial staff nominates cards based on a set of objective criteria. CreditCards.com is not compensated for any of the nominations or awards.