2018 Student Card Survey: Higher APRs, but more perks

Kelly Dilworth
Personal finance writer
Specializing in new trends in credit

2018 Student Card Survey: Higher APRs, but more perks

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It’s getting more expensive to own a student card, according to a new analysis by CreditCards.com. Average APRs have increased dramatically since CreditCards.com last surveyed student credit cards, thanks in part to higher interest rates. Meanwhile, penalty fees have also modestly increased. 

In exchange for paying higher rates and slightly bigger fees, today’s young scholars are also being treated to a richer menu of perks – including free credit scores and credit education tools, credit and identity theft monitoring, mobile apps designed specifically for teens and 20-somethings and stylish card designs.

For this year’s survey of student credit cards, CreditCards.com evaluated the APRs, penalty charges, promotions, rewards and benefits of the 10 student cards still available nationwide. Since 2014, the number of cards college students have to choose from has shrunk dramatically – from 16 cards four years ago to just 10 student-only cards today. Some credit unions also offer student cards, but you need to be a member to get them, so they weren't included in the survey.

Among the few cards that still cater expressly to college students, a common theme has emerged: APRs are dramatically higher. The average minimum APR for the 10 cards surveyed is currently 16.48 percent – up from 15.14 percent in 2017. But issuers have also packed student cards with a growing number of tools, such as credit education apps and spending analyzers designed to help students become savvier – and safer – borrowers.

In addition, many of today’s student credit cards offer valuable perks, such as cash back and point rewards, identity theft protection services, free credit scores and other credit building tools that promise to enhance a card-carrying student’s financial education. 

The extra tools are good news for students – many of whom start college with little idea of how to handle credit.

“By and large, students aren’t very savvy when it comes to understanding how credit works and what it means to their future,” says Gabriel Serna, an assistant professor of education at Michigan State.  

For example, many parents add their kids to family cards as authorized users, says Serna, but  don’t explain clearly enough how credit works. As a result, students can make costly mistakes that can have a negative impact. As authorized users, students aren’t legally liable for any unpaid balance, leaving their parents on the hook for frivolous charges.

Serna recommends parents start teaching kids about credit before they leave high school. But for students whose parents don’t take the time to instill good financial habits, extra tools to help guide their credit use and teach them how to use credit could be a lifesaver.

2018 student credit cards

Bank of America Cash Rewards Credit Card for Students

APR14.99% to 24.99%
Penalty APRUp to 29.99%
Late payment feeUp to $38
Foreign transaction fee3%
Purchase offer0% for 12 months
Educational contentYes
Free credit scoreYes-FICO
Annual feeNone
RewardsYes-1% cash back on general purchases, 2% cash back on grocery and wholesale club purchases, 3% cash back on gas (up to $2,500 per quarter), $150 sign-up bonus when you spend $500 in first 3 months
Additional perksShopSafe, Account Alerts, mobile app, text banking



Bank of America Travel Rewards Credit Card for Students

APR16.74% to 24.74%
Penalty APRUp to 29.99%
Late payment feeUp to $38
Foreign transaction feeNone
Purchase offer0% for 12 months
Educational contentYes
Free credit scoreYes-FICO
Annual feeNone
RewardsYes-Unlimited 1.5 points for every dollar you spend, 20,000 bonus points if you spend $1,000 in first three months
Additional perksShopSafe, Account Alerts, mobile app, text banking



BankAmericard Credit Card for Students

APR14.74% to 24.74%
Penalty APRNone
Late payment feeUp to $38
Foreign transaction fee3%
Purchase offer0% for 15 months
Educational contentYes
Free credit scoreYes-FICO
Annual feeNone
RewardsNo
Additional perksShopSafe, Account Alerts, mobile app, text banking



Journey® Student Rewards from Capital One

APR24.99%
Penalty APRNone
Late payment feeUp to $38
Foreign transaction feeNone
Purchase offerNone
Educational contentYes
Free credit scoreYes-VantageScore
Annual feeNone
RewardsYes-Up to 1.25% cash back when you pay on time
Additional perksExtra cash back, automatic credit limit increases when you pay on time, Social Security Alerts, free credit monitoring for your Experian and TransUnion credit reports, Credit score simulator tool, account alerts, customizable due date, mobile app, ENO intelligent assistant, car rental coverage, travel accident insurance, 24-hour travel assistance, extended warranty



Citi ThankYou® Preferred Card for College Students

APR16.24% to 26.24%
Penalty APRUp to 29.99%
Late payment feeUp to $35
Foreign transaction fee3%
Purchase offer0% for 7 months
Educational contentYes
Free credit scoreNo
Annual feeNone
RewardsYes-2 points for every dollar spent on dining/entertainment, 1 point per dollar spent on general purchases, 2,500 bonus points when you spend $500 within 3 months
Additional perksCiti Private Pass (special access to presale tickets and VIP packages), Citi concierge, customizable payment due date, Citi Mobile App which offers "spending insights" and a "360 financial view" of multiple finanical accounts, ability to lock account through mobile app, payment to payment services through Zelle, account alerts



Discover it® Student Chrome

APR14.74% to 23.74%
Penalty APRNone
Late payment feeUp to $37, $0 first late payment
Foreign transaction feeNone
Purchase offer0% for 6 months
Educational contentYes
Free credit scoreYes-FICO
Annual feeNone
RewardsYes-2% cash back on restaurant and gas purchases (up to $1,000 per quarter), 1% cash back on general purchases, 100% rewards match at end of first year
Additional perks$20 statement credit with 3.0 GPA, Social Security Alerts, credit monitoring through Experian, mobile app, ability to freeze account instantly through mobile app or online, account alerts



Discover it® Student Cash Back

APR14.74% to 23.74%
Penalty APRNone
Late payment feeUp to $37, $0 first late payment
Foreign transaction feeNone
Purchase offer0% for 6 months
Educational contentYes
Free credit scoreYes-FICO
Annual feeNone
RewardsYes-5% cash back on up to $1,500 in purchases made in accordance with Discover’s 2018 Cashback Calendar after enrollment
Additional perks$20 statement credit with 3.0 GPA, Social Security Alerts, credit monitoring through Experian, mobile app, ability to freeze account instantly through mobile app or online, account alerts



Deserve Edu® MasterCard for Students

APR20.49%
Penalty APRNone
Late payment feeUp to $25, $0 first late payment
Foreign transaction feeNone
Purchase offerNone
Educational contentYes
Free credit scoreYes-Internal score
Annual feeNone
RewardsYes-1% cash back on purchases
Additional perksFree access to Amazon Prime Student, cell phone insurance, $100 discount from T-mobile, $10 insurance rebate from Lemonade, $100 off furniture rentals from Feather, car rental insurance, roadside assistance, travel assistance, price protection, extended warranty, ID theft protection, upcoming mobile app



Wells Fargo Cash Back College Card

APR12.90% to 22.90%
Penalty APRNone
Late payment feeUp to $37
Foreign transaction fee3%
Purchase offer0% for 6 months
Educational contentYes
Free credit scoreYes-FICO
Annual feeNone
RewardsYes-1% cash back on purchases; 3% on groceries, gas and drugstore purchases for 6 months, additional cash back available through Earn More Mall
Additional perksAccount alerts, budgeting and tracking tools, car rental insurance, roadside assistance, travel and emergency services, cell phone protection, mobile app



State Farm Student Visa Card

APR12.99% to 19.99%
Penalty APRNone
Late payment feeUp to $38
Foreign transaction fee3%
Purchase offerNone
Educational contentYes
Free credit scoreNo
Annual feeNone
RewardsYes-1/2 a point for every dollar spent on general purchases, 3 points for every dollar spent on up to $4,000 insurance payments
Additional perksBonus points for paying for your insurance, mobile app, car rental insurance, Visa student discounts, account alerts






See related: Best card options when sending a child abroad, First card dilemma: Student card vs. secured card

More valuable perks

The surge in student-friendly benefits is giving students and parents new reasons to consider a college card.  

Historically, students were urged to get a credit card so they could jumpstart their financial life before graduating. “Having a credit card helps students learn to manage finances and helps to build a credit history,” says Nessa Feddis, a senior vice president at the American Bankers Association. The same holds true today.

“Having a credit card helps students learn to manage finances and helps to build a credit history.”

But now, students and their parents are finding that today’s student cards offer significantly more value than student cards of the past.

For example, according to CreditCards.com’s survey:  

  • Most cards offer some kind of free credit score. Six of the cards surveyed offer cardholders a free FICO score. One provides a complimentary VantageScore and another plans to offer an internal score.
  • Some cards help students fight back against data theft. For the first time, two cards now offer a Social Security monitoring service that scans the dark web for stolen information. Both cards also offer credit-monitoring services that alert students when an account has been opened in their name.
  • Some cards also help students avoid identity theft. Two cards offer credit-freezing services that allow students to instantly lock their cards if they lose them.
  • Most offer a rewards program. Nine of the 10 cards surveyed offer a rewards program. Six offer cash back. Two offer point rewards and one offers travel rewards.
  • Few offer traditional card benefits. Just four cards offer rental car coverage. Two offer extended warranty coverage and just one offers price protection.
  • Some offer more unusual perks. Two cards offer cell phone insurance for students who are nervous about bringing an expensive smartphone to school. One card offers free Amazon Prime student membership and substantial discounts.
  • Several are ideal for traveling or studying abroad. Five student cards waive foreign transaction fees.

The extra perks often appeal to students and their parents, who appreciate the educational value of free apps and credit scores.

For example, Jeanne Kelly, a credit coach in Rhinebeck, New York, says she encouraged her daughter to start using credit in her teens so she could get in the habit of using cards responsibly.

“I wanted to teach her at a young age how to use credit in a healthy way,” says Kelly. But when it came time to help her daughter apply for a college card, extra perks, such as rewards and a free FICO credit score, also caught her eye. “I really wanted my daughter to be tracking and looking at her score, so that was a big selling point.”  

See related: What's the minimium age to be an authorized user?

Encouraging responsible credit use

Issuers are also using free tools and incentives to teach students about credit and encourage them to be more responsible with their money.

For example, to help students become more sophisticated borrowers, the lender Deserve is developing an interactive mobile app that evaluates students’ card behavior and provides real-time advice for improving their credit score and making better decisions with their cards.

“We have personalized credit coaching within the app,” says Chris Harris, senior director of growth at Deserve, which launched the Deserve Edu MasterCard in 2017. “We really feel it’s our mission to help students build credit.”

Similarly, Capital One encourages students to become smarter cardholders by offering 0.25 percent more cash back on the Journey Student Rewards card when students pay on time. Students also get a higher credit limit after their first five on-time payments.

The Discover it® Student Cash Back card and the Discover it® Student chrome card also uses student-friendly carrots to encourage good behavior: It gives students an annual $20 statement credit (for up to five years) when they achieve at least a 3.0 GPA.

According to Emina Dautovic, a senior marketing manager at Discover, the good grades benefit is intended, in part, to help encourage students to make good choices – whether it’s with their classes or their cards. “We’re trying to connect responsible behavior on your education to responsible behavior on your credit card,” she says. 

“I really wanted my daughter to be tracking and looking at her score, so that was a big selling point.”

Issuers have also put a high premium on how-to articles, interactive quizzes and educational videos.

Bank of America, for example, has partnered with Khan Academy on financial education videos. It also operates about 100 financial education centers in college towns around the country, says Bank of America spokeswoman Betty Riess. These feature interactive financial learning tools and specialized experts on-site who understand the needs of college students, she says.

Meanwhile, Wells Fargo’s mobile app now offers a free spending tool that analyzes what students are charging to their cards and provides customized advice.    

Higher APRs, safer terms

Many of the cards evaluated by CreditCards.com also offer more safeguards than the average credit card – such as late payment forgiveness and stricter credit limits – so students are less likely to get into a lot of trouble when they stumble. 

For example:

  • Student cards are typically more forgiving than adult cards. Seven student cards don’t charge a penalty rate – which can run as high as 29.99 percent.
  • Three student cards waive students’ first late payment fee so they don’t get hit with a big charge when they make their first mistake.
  • Late payment fees are pricier than they used to be. Five cards charge late fees as high as $38. Three charge up to $37.

The more flexible terms can be popular with parents, who often worry about how much extra students will have to pay if they make a mistake.

Sandy Fowler, an entrepreneur in St. Joseph, Michigan, and host of the podcast, Mighty Parenting, said she was attracted to student cards from Discover because they offered better terms for her daughters.

“The terms were essentially the same as what we get on our credit cards,” she said. “It wasn’t a 25 percent interest rate and they also gave them a one-time forgiveness.” In addition, Fowler appreciated the free FICO score Discover offered and its lack of a penalty rate. “Their rates won’t get jacked up ridiculously if they make a late payment,” she says.

If Fowler was looking for a card today, though, she could have a harder time finding a comparable APR. Interest rates on student credit cards have risen sharply in recent years. For example, the average median student card APR – which is closer to what most students are paying – has climbed to 20 percent. Meanwhile, the average maximum APR has risen to 23.66 percent.

At 16.14 percent, the average minimum rate for student cards is more affordable. But “not very many people get that lower rate,” says Deserve’s Chris Harris.

Most student cards offer a wide range of potential APRs. For example, the BankAmericard for Students offers one of the widest ranges, starting at 14.74 percent and maxing out at 24.74 percent.

Just two – the Deserve Edu MasterCard and the Capital One Journey Student Rewards card – offer one flat rate. “You know what you’re getting when you apply,” says Harris. At 20.49 percent, the APR on the Deserve card is considerably higher than the minimum rates offered by most student cards, but it’s much lower than the average maximum interest rate.

Not your parents’ credit card

In addition to student-friendly benefits and more flexible terms, many student card issuers are also setting themselves apart by investing in technology and tweaking their mobile apps so they appeal more to teens and 20-somethings. Capital One now offers an intelligent assistant called Eno. Citi offers payment-to-payment through Zelle.

Meanwhile, Discover recently introduced in-app messaging to its mobile app so that young people can communicate with the card issuer in a way they find more comfortable, says Discover’s Emina Dautovic.

“When you go through our app and use our messenging feature, it’s like texting with a friend,” says Dautovic. “It’s more realistic in how students interact with each other.”

Discover has also spearheaded some creative campaigns to reach students, including a promotion last year that allowed students to vote on a new card design.

The promotion was a hit with students, says Dautovic. “We learned they really like card designs that cater to them,” she says.

The new designs are scheduled to launch later this summer and appear tailor-made for young people: For example, one whimsical design features a fierce French Bulldog sporting aviator sunglasses. Another is iridescent and reminiscent of a rainbow, which, for many young people, is a symbol of inclusion and diversity.

According to Dautovic, the stylish designs allow members of Generation Z to express themselves with their cards. “They want to break free and have their own identity.” Flaunting a plastic card with a stylish design is one more way they can define themselves.


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Updated: 10-21-2018