Almost half of students reported that they carry at least one credit card, and there are currently plenty of options from which they can choose. See which student card fits your needs best.
If you’re in school and money is tight, a student credit card could come in mighty handy – as long as you have a plan to pay off what you charge.
Student credit cards offer rewards and benefits, just like other cards, plus a number of student-centric perks that can really up their value.
A 2021 AIG and EverFi survey revealed that almost half of students (48%) in the study had a credit card, which is up 8% from the previous year, and that more than half of college students have two or more cards.
It’s no surprise, therefore, that there is a number of student cards on the market, along with some new ones that launched in 2021.
In our recent CrediCards.com survey, information showed that the number of student card options is up since 2019.
Although four cards out of the 11 that were available in 2019 (Citi Rewards+ Student Card, State Farm Student Visa, Wells Fargo Cash Back College Visa Card and BA Cash Rewards for Students) have been discontinued, there are three new offerings on the market since our last survey: the Sallie Mae Ignite Mastercard, Capital One SavorOne Student Cash Rewards Credit Card and Capital One Quicksilver Student Cash Rewards Credit Card.
The student credit cards we surveyed include:
- Bank of America® Customized Cash Rewards Credit Card for Students*
- Bank of America® Unlimited Cash Rewards for Students*
- BankAmericard® for Students*
- Bank of America Travel Rewards Card for Students*
- Capital One SavorOne Student Cash Rewards Credit Card
- Capital One Quicksilver Student Cash Rewards Credit Card
- Chase Freedom® Student credit card
- Journey Student Rewards from Capital One
- Deserve® EDU Mastercard for Students
- Discover it® Student Cash Back
- Discover it® Student chrome
- Sallie Mae Ignite Mastercard*
Here are the key findings from our 2021 student card survey:
- APRs are lower than in 2019: The average APR of the cards we surveyed this year was 19.70%, compared to 20.82% in 2019. The average minimum APR of the cards this year was 16.51% compared to around 18% in 2019 and the maximum APR was 22.90% compared to well above 25% in 2019. The average APR for all cards is currently 16.22%.
- Promos are on par: In 2019, seven of 11 cards offered a 0% APR period, while in 2021 seven cards out of 12 offer one. Discover and Sallie Mae offer cardholders 0% interest on purchases for six months and Bank of America’s intro period lasts for 18 months. Balance transfers on offer for 0% are available from Bank of America’s two cards (from 15 to 18 months) and Sallie Mae’s card for six months. Discover reduced its balance transfer rate to 10.99% and the Deserve EDU card doesn’t allow any balance transfers.
- Penalties and fees are about the same: Only four cards out of this year’s 12 charge a higher APR for late payments (29.99%), similar to 2019. Discover extends a one-time no-fee courtesy to customers for late payments and all of the cards charge from $39 to $40 as a late fee. The Deserve EDU card charges only $25 for a late payment compared with the other issuers’ levy of $40 ($39 for Sallie Mae). Five of this year’s cards charge a foreign transaction fee, compared with six cards in 2019. None of these cards charges an annual fee – the same as in 2019.
- Bonuses: Bank of America offers cardholders $200 cash back after they spend at least $1,000 in the first three months (its travel card gives 25,000 points). Chase Freedom gives you $50 cash back if you purchase something within your first three months and Sallie Mae has the same offer but you have to spend $250. Discover matches all of your cash back you earn the first year, doubling your cash back rewards. BankAmericard, Capital One and Deserve EDU now offer sign-up bonuses.
- Rewards: While the BankAmericard for Students focuses on lowering its APR as much as it can, it offers no rewards. With Bank of America’s Travel Rewards for Students you earn 1.5 travel points for every dollar you spend, and the rest of the cards pay 1% to 1.5% cash back with higher amounts for different categories throughout the year. The rest of the cards offer rewards in the form of cash back or points.
- Perks: Capital One’s Journey Student Rewards gives new cardholders up to $60 in streaming subscriptions credits paid out in monthly $5 increments for the first 18 months, Chase Freedom gives three free months of DoorDash (then 50% off for nine more months) and is currently giving 5% cash back on Lyft charges until March 2022. Deserve EDU offers students a free one-year subscription to Amazon Prime Student if you spend $500 in the first three months and it – and Sallie Mae – also offers cellphone protection (up to $600). Also pay on time and you’ll get a quarter percentage point higher cash back rate from Capital One (every month your account is in good standing) and Sallie Mae (after six on-time payments). The Chase Freedom Student Credit Card rewards you with $20 on your anniversary if your account is in good standing for up to your first five years and Discover gives students with a GPA of 3.0 or higher a $20 cash bonus for up to five years.
- Security: All of the cards except Deserve EDU give cardholders free access to their credit scores. Five of the cards allow you to freeze and unfreeze your cards and Capital One and Discover offer credit monitoring services, CreditWise and Discover Identity Alerts, respectively.
See related: How to maximize credit card rewards
The pandemic affected student cards
Because the Fed dropped rates significantly in March 2020 due to the pandemic (with no expectation on the horizon of it raising them), lower interest rates for credit cards abound. And that’s a great thing for students. In addition, many issuers are easing up on penalties and fees.
Ben Reynolds is CEO and founder of Sure Dividend, a stock investing website. He said a possible reason Deserve EDU is charging less for late fees could indicate it wants to help people who were and are financially struggling during the pandemic. Decreasing the late fee charge probably helped people who suddenly lost their jobs and struggled to pay their credit card bills on time.
Discover not charging for the first late fee could have established loyalty with some customers since it might have helped prevent them from going deeper into debt by avoiding one fewer late fee, he added.
Foreign transaction fees becoming less common could be linked to a lack of frequent international travel, Reynolds said. There is less to be gained with that particular fee, so credit card companies might have felt they could attract new customers by forgoing the foreign transaction fees.
Issuers could educate younger customers better
“It’s a real positive that credit cards are more and more student-centric, with features like free credit monitoring and discounts for good grades. But frankly, that’s not enough,” said Andrew Pentis, a certified student loan counselor and debt expert at Student Loan Hero.
He said it’s concerning that large cohorts of students have at least four figures in credit card debt but said we can’t blame that entirely on issuers.
“These companies, however, might do more to provide educational tools for their youngest customers,” Pentis said.
Students should build credit and avoid fees
“My best student card advice is not to make things too complicated,” said Ted Rossman, senior industry analyst for CreditCards.com.
It’s a bonus if you can get something like 1.5% cash back on everything you buy, or perhaps a higher return in certain categories. However, if you’re a student, chances are that you’re not spending enough to earn a substantial amount of cash back or travel rewards, he pointed out.
If you overspend and carry a balance, though, “that can be a big problem,” Rossman said, and the same goes for paying late and hurting your credit score.
Rossman suggested getting established gradually, and in a few years – once you’ve graduated – you’ll benefit from a higher credit score and can start to pursue even better rewards as your income grows.
Student Loan Hero’s Pentis said student cardholders should be reminded time and again that zeroing their balance each month is the only way to get the best benefits out of the plastic in their wallets.
Doing that consistently enables them to score cash back and other bonuses while building their credit history – all without adding more debt to a load that likely already includes student loans.
“It would also be a welcome sight for issuers, particularly those that double as private student loan lenders, to provide student loan repayment perks as part of their credit card offers,” Pentis said.
The 2021 Student Card Survey of 12 U.S. credit cards was conducted from July 26 to July 30, 2021 by CreditCards.com. The 12-card survey pool represents all of the student credit cards we were able to identify this year. Details on each card were gathered from the cards’ terms and conditions documents, any publicly available cardholder agreements and phone calls to issuers.
All information about the America® Customized Cash Rewards Credit Card for Students*, Bank of America® Unlimited Cash Rewards for Students*, BankAmericard® for Students*, Bank of America Travel Rewards Card for Students* and Sallie Mae Ignite Mastercard has been collected independently by Bankrate or CreditCards.com and has not been reviewed or approved by the issuer.