It’s never too early to start earning points, miles and rewards. Despite age and credit limitations, here’s how college students can combine cards, loyalty programs and other tools to save money on travel and everyday expenses.
Update: The City ThankYou Preferred for College Students is no longer available through our site as of Nov. 28, 2018.
Getting a credit card in college is a good way to build credit and learn some financial responsibility. But it can also yield savings when you spend in the form of rewards.
Just don’t rush to apply for those premium rewards cards in your parents’ wallets yet. You need to start small first.
Why? Because you may be still too young to be eligible for a rewards card on your own.
- The 2009 CARD Act changed up the rules on credit cards, with one major about face affecting young adults.
- It raised the minimum age for opening a credit card to 21.
- An exception applies if you have an adult co-signer or a steady income to repay what you charge.
The age rule makes it harder for students to get access to rewards credit cards. Fortunately, you can still earn rewards in college, through a combination of credit cards, online apps and tools and loyalty programs.
If you’re a college student, check out this crash course on earning rewards.
See related:Student cards: The definitive guide
College students and rewards points: A 6-step guide
1. Working around limitationsBecause you can’t get a card in most cases until age 21 unless you are working part- or full-time, you likely don’t have opportunity to build up credit history. You might have student loans in your name, but if they’re not in repayment yet, they won’t help much.
Once you hit your 21st birthday and apply for credit, you could still get turned down for mainstream rewards cards. The most desirable cards often require an excellent credit score and/or a long credit history, both of which students typically lack.
Student rewards credit cards offer a work-around, since they’re easier to qualify for, but again, they still require that you have at least some sort of income stream. Here are a few student cards to consider:
- Citi ThankYou Preferred Card for College Students: Earn 2 points on dining and entertainment and 1 point on everything else.
- Discover it® Student Cash Back: Earn 5 percent cash back in rotating quarterly bonus categories, up to $1,500 per quarter (enrollment required); 1 percent on other purchases.
- Discover it® Student chrome: Earn 2 percent cash back at gas stations and restaurants on up to $1,000 in combined purchases every quarter; 1 percent on everything else.
- Journey Student Rewards from Capital One: Earn unlimited 1% cash back on all purchases; 25 percent bonus when you pay on time.
As you compare cards, remember that they work differently, says Chloe Merriam, marketing coordinator at National Debt Relief. “Cash back is a different type of process from earning miles or points, and they’re going to result in different types of rewards.”
Josh Hastings, founder of personal finance blog Money Life Wax, says college students should know what their end goal is when choosing a student rewards card.
“If you’re looking to travel, then a miles card works great,” says Hastings, while you may prefer to earn points if you are mostly spending at restaurants or bars. “Cash back cards are great, too, it just depends on the rate of return and type of purchasing you’re doing the most.”
You can also earn rewards as an authorized user on one of your parent’s cards. Talk with Mom and Dad first about how and when those can be redeemed and keep track of what you’re earning.
“When it comes to divvying up payments and rewards earned, most banks make this easy,” says Max Frankel, founder and CEO of Max points. “Most statements clearly detail which cardholder made which purchase and how many points or miles they earned.”
2. Earn travel rewards without a credit card
Signing up for airline, hotel and other loyalty programs is a simple way to earn rewards in college when you lack a credit card.
- If you plan to spend a semester abroad, for instance, you could earn airline miles every time you book a flight that you could redeem for free airfare in the future.
- Hotel loyalty programs offer points that you can turn into free nights.
“Earning frequent flyer miles, such as Delta SkyMiles or United MileagePlus miles, is ideal for those who love to travel,” says Frankel “College students can redeem more dollars’ worth in airfare than cash back alternatives.”
These programs often give you flexibility in how you use your rewards.
“You can credit partner airline flights to U.S. frequent flyer programs,” says Frankel. If you’re flying with a partner airline, you can still get full rewards credit by booking with your frequent flyer number.
Some hotel loyalty programs also coordinate with partner merchants, including airlines. The IHG Rewards Club, for instance, gives you the option of earning points or miles on eligible stays if you’re also a member of a partner frequent flyer program.
Hastings says being loyal to one brand in college could help you accumulate rewards faster, especially for hotel bookings.
“Stay consistent one way or the other and factor in where you travel the most when deciding on hotel loyalty,” he says. “Most cities have the big players when it comes to hotel loyalty programs.”
Tip: United’s MileagePlus X is a mobile app that lets you earn United miles on everyday spending by purchasing e-gift cards from your favorite merchants, from restaurants and coffee shops to movie theaters and clothing retailers. And you can add any credit or debit card as a payment form to the app. See “Mileage Plus X: A unique, mobile way to earn miles on United” to learn more.
3. Earn rewards with your mobile device
Using online shopping portals and cash back sites can help you earn miles, points or cash back on purchases made with a student credit card. You can also use these online tools to earn rewards if you’re spending with a debit card instead.
Merriam says an app like Ibotta – which lets you earn cash back at participating stores – could be a huge help in saving money. In addition to Ibotta, check out these other sides for earning cash rewards, discounts or both:
“The easiest way to make sure you’re getting the highest cash back or loyalty program bonus when shopping online is to compare payout rates on CashBackMonitor.com or a similar site,” says Frankel.
4. Take advantage of special deals associated with your card
Card-linked offers are yet another way to save money with a debit card or student credit card.
These programs automatically apply a discount or promo code when you make a purchase with your card at participating business.
Coupons.com also features debit and credit card-linked offers for restaurants and shopping. You can plug in your ZIP code to see what’s available near campus.
5. Keep an eye on credit utilization
There’s one potential hitch to using a student card to earn rewards in college. Student cards often have lower limits than regular rewards cards.
Charging up to the limit on your card can help you max out rewards, but doing that consistently could hurt your credit score, not to mention having a balance that you can’t afford to pay off at the end of the month.
“Credit utilization is paramount to keep track of as this factor determines 30 percent of FICO scores,” says Frankel. Credit utilization is the amount you have borrowed compared to your credit limits.
A lower utilization can result in a higher score. To keep utilization in check:
- Keep track of spending. Setting up balance alerts or new purchase notifications with your card can make it easier to see how close you’re getting to a certain credit limit on your account.
- Keeping your credit utilization under 10 percent is great, according to experts; keeping it as close to zero as possible is best.
- Make payments before the due date. “Most banks report the balance on your final bill each month, so paying balances down early is an easy way to improve this section of your score,” says Frankel.
6. Follow the rewards rules
As you earn rewards in college, keep these rules in mind:
- Get organized. “To be successful with all of these rewards programs, students need to be organized and keep straight all the requirements of every program,” says Merriam.
- Check your calendar. Some of the rewards you earn with a credit card or a loyalty program may have an expiration date. If you have rewards that are “use it or lose,” know when they expire.
- Redeem the right way. You may be able to redeem rewards for travel, cash back, gift cards or merchandise but their value may not be the same. Do the math on what you’re getting for your rewards, especially for travel redemptions. “Look up how much a flight should cost so that you don’t overspend on a peak mileage price and keep searching for saver awards,” says Frankel.
- Don’t overdo it. It’s OK to have just one card in college if you’re still learning the finer points of rewards. “Start small and gradually increase how you use credit cards to get rewards,” says Hastings.
- Give your rewards card an annual checkup. Credit card terms and benefits can change and not always for your benefit. At least once per year, take time to review the competition, says Frankel, to see if another card might offer better rewards or fewer fees.
- Never charge more than what you can afford to pay off every month. Earning rewards is great, but self-defeating if you end up with more card debt and interest charges that you can handle.