Looking for the best credit cards for students in 2020?

TransferWise
01.30.20
9 minute read

Many traditional banks offer credit cards specifically aimed at students, which typically come with relatively low fees, and extra perks such as discounts and cashback.

If you’re looking for a way to manage your money while you’re in school, college, or university, a student credit card might be the right choice for you.

However, depending on your priorities, there are also other options available, such as secured credit cards to build your credit score. If you want a card which you can use when you shop with online retailers based abroad, or for your travels, you might also consider a modern alternative like the multi-currency card from TransferWise. We’ll take a look at these options, and more. Let’s get started.

Table of contents:

Who can get a student credit card?

You’ll usually need to be aged 18 or over, and be able to prove your student status to get a student credit card. Other eligibility criteria are also likely to apply - you’ll normally need a Social Security Number (SSN) and you’ll need to be able to provide official photo ID and proof of residence for example.

If you’re aged under 18 you may still be able to get access to a credit card. In this case you’ll probably need to either prove you have an independent income, and can cover your costs - or you’ll have to have a joint account in shared names with a parent or guardian.

TransferWise's multi-currency Mastercard can be up to 4x cheaper when spending abroad, compared to banks and PayPal

Requirements

Common eligibility requirements for a student credit card include:

  • You must be a US citizen or resident with an SSN
  • You must be aged 18 or above
  • If you’re under 21, you may need to meet further requirements including showing adequate income or being a joint account holder with a guardian
  • You’ll need to prove you’re enrolled onto a qualifying educational course
  • Some card providers check your credit history and a card will only be offered if you have a solid credit score

All that said, each bank has its own requirements when it comes to credit cards, which can vary widely. Our listing below gives some ideas for cards suited to international students or people looking to build credit, for example. If you don’t find a card to suit you from your regular bank, it’s well worth looking further to see if other providers can help.


Best student credit cards: a list to choose from

Most of the larger banks offer student specific credit cards. There are also smart solutions from some online banks and alternative providers, which are worth checking out.

Before you decide which card might suit you, think about what you want from your card.

If you intend to use it for day to day expenses you may want the card with the highest possible cash back. But if you’re planning on paying for your international travel using your card, you might want one with the lowest possible foreign transaction fees and that offers a foreign exchange rate closest to the mid-market rate.
And then again, if your main aim is to build your credit score, you may make a different choice altogether. Taking time to think about how you’ll use your card will help make sure you get the right one for your needs.

Here are a few of the top choices when it comes to student cards.


1. Round up your rewards: Citi Rewards Student Card

Earn extra rewards points as Citi will round up the points you get with every purchase to the nearest ten. Get 2x rewards on your groceries, and 1x on everything else, plus occasional bonus points as you accumulate. Spend on Amazon or Best Buy.¹ Here are some of the key costs you’ll need to think about.

Feature Fee²
Annual maintenance costs Free
Foreign transaction fees 3% of any transaction which needs to be converted to USD
APR 0% for 7 months, then from 15.99 - 25.99% variable depending on your creditworthiness
Cash advance fee 5% or $10, whichever is greater
Late payment fees Up to $40

2.Choose where you earn rewards: Bank of America Cash Back Student Card

Bank of America offers a card where you can choose the category which earns the highest percentage cash back. Choose a category such as dining or online travel, and get 3% on purchases, with 2% on groceries and 1% cash back on all other categories.³ Here are some of the key fees you should know about.

Feature Fee⁴
Annual maintenance costs Free
Foreign transaction fees 3% of any transaction which needs to be converted to USD
APR 0% for the first 15 billing cycles, then 15.49% - 25.49% variable
Cash advance fee 3% or $10, whichever is greater
Late payment fees Up to $39 - a penalty APR may also be applied

3.Cash back and rewards for good grades: Discover it Student Cash Back

With the Discover it card, you’ll get up to 5% cash back on purchases, and a reward of $20 for each school year you keep your GPA above 3.0. Worth hitting the books for.

Feature Fee⁵
Annual maintenance costs Free
Foreign transaction fees Free
APR 0% for 6 months, then 19.49% variable
Cash advance fee 5% or $10, whichever is greater
Late payment fees Fee will be waived for the first late payment - a charge is applied after that. Check your card agreement for details

4.Cut international transaction costs: TransferWise multi-currency card

The TransferWise multi-currency card isn’t a credit card, but can be a great way to manage your money if you travel or shop online with international retailers.

You can also get this card without an US social security number (SSN), making it a good option for international students.

TransferWise Mastercard with balances

Linked to a Transferwise multi-currency account, you’ll be able to hold dozens of different currencies and change between them using the mid-market rate whenever you need to.

An independent researcher compared TransferWise to 5 other US bank accounts and PayPal. They found that TransferWise up to 4x cheaper for spending abroad.

Instead of a markup on the currency exchange rate, that’s usually used without disclosing how much it adds up to, TransferWise uses a transparent fee of 0.35%-3% depending on the currency.

If you plan on traveling, spending in a different currency or if you’re an international student, this could be a smart option to use alongside your regular student credit card and account. Here are the costs.

Feature Fee⁶
Annual maintenance costs Free
Foreign transaction fees None
Cash advance No charge to use ATMs up to the equivalent of $200/month. Low fee applied after that
Top up your account Pay into your account with no fee in US, Australian and New Zealand dollars, euros, and British pounds

5.International students apply without an SSN: Deserve Edu Card

If you’re an international student and don’t have a US social security number, you can still open a Deserve account and get a credit card.

Deserve issue cards to customers with little credit history, making this a smart choice for students and especially those new to the country. You can prequalify by completing some personal details online to see if you’re able to access a card.⁷ Here’s what you’ll pay for it.

Feature Fee⁸
Annual maintenance costs Free
Foreign transaction fees Free
APR 20.24%
Cash advance fee Cash advances not available
Late payment fees Up to $25

6.Hook a low APR: Wells Fargo Cash Back College

Get a 1% - 3% cash back rate on your purchases, while you build your credit score. You’ll also have access to financial education tools and can review your FICO score when you want to via the online banking system.⁹

Feature Fee¹⁰
Annual maintenance costs Free
Foreign transaction fees 3% of any transaction which needs to be converted to USD
APR 0% for 6 months, then from 12.65% variable depending on your creditworthiness
Cash advance fee 5% or $10, whichever is greater
Late payment fees Up to $37

7.Build credit with a secured card: Discover it Secured

If your priority is building a credit history while you’re in college, you could find a secured card is your best bet. Typically you’ll need to pay a deposit which is refunded when you close the card or transition to a regular, unsecured product. With this card choice you’ll earn cash back and can review your FICO score easily to see how your credit is building.

Check out the fees for the Discover it Secured card option, or read more about other great secured credit cards, here.

Feature Fee¹¹
Annual maintenance costs Free
Foreign transaction fees Free
APR 24.49% variable
Cash advance fee 5% or $10, whichever is greater
Late payment fees Fee will be waived for the first late payment - a charge is applied after that. Check your card agreement for details

8.Smart cashback options: Journey Student Rewards Capital One

Get cashback on purchases, access a higher credit line if you make your payments on time, and get simple updates on your transactions and balances as you need them. Pay your bills on time to get extra cash back - 1.25% instead of the standard 1%. Here are the key fees you’ll pay.

Feature Fee¹²
Annual maintenance costs Free
Foreign transaction fees Free
APR 26.74% variable
Cash advance fee 3% or $10, whichever is greater
Late payment fees Up to $39

Building credit as a student

Learning to manage your money is a key skill for life after college or university. But building a solid credit score is important too. That means you’ll want to access credit and demonstrate you can manage it responsibly, so credit agencies start to build a picture of you as a creditworthy individual.

Your credit score can influence lots of things once you graduate. It will be used to assess whether you’re given everything from a store credit line to a mortgage, and it could be used if you want to refinance your student loans. Your credit score may even be taken into account if your prospective employer wants to do background checks on you. In short, it’s well worth using your time in education to also build a solid credit history - you’ll reap the benefits in the future.

Here are some things you need to know about building credit:

  • Payment history is the biggest factor in your FICO score - pay your bills on time to keep your record clean
  • Don’t max out your credit - lenders like to see you’re using only a fraction of your available credit. Some commentators recommend using no more than 30% of the credit line you’re offered if you can
  • Length of credit history matters - start building your score in college to get the best possible credit later

As a student you’ve got a lot going on. Thinking about your finances might seem like another chore - but managing your money and building credit while you study will set you up for success after graduation.

Take a look at the student credit cards available from traditional banks, as well as some specialist alternatives like the multi-currency card from TransferWise to find a card which suits you, and helps you save time and money.


Sources:

  1. Student Credit Card - Citi Rewards+℠ Student Card
  2. Citi Student Credit Card - Complete Terms Page
  3. Bank of America® Cash Rewards Credit Card for Students
  4. Terms & Conditions for BankAmericard ® Credit Card
  5. Discover it Student Cash Back | Student Rewards Credit Card
  6. TransferWise - Foreign Currency Card and Account in US
  7. Deserve Cards - Build Credit and Get Rewards
  8. Deserve® EDU Cardholder Agreement November 2019 Deserve® EDU Cardholder Agreement for Cards issued by Celtic Bank Deserve® ha
  9. Cash Back Credit Card for College Students
  10. Wells Fargo Cash Back College Card Terms and Conditions
  11. Discover it Secured | Secured Credit Card to Build Credit
  12. Journey Student Credit Card
  13. How are FICO Scores Calculated?

All sources last checked 30 January 2020


This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.

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