In a Nutshell
If you’re a student with bad credit, little credit, no credit or even no SSN, you may still qualify for a credit card that could help you build credit with responsible use. Check out our picks.These offers are no longer available on our site: Journey® Student Rewards from Capital One®, Deserve® EDU Mastercard
When it comes to credit, college students often find themselves at a disadvantage. Factors such as a short credit history and high debt can make it tough to qualify for a credit card.
That’s a problem, because a credit card can be a great tool to help build credit. And good credit can come in handy if you want to qualify for a low-interest auto loan, move to a new apartment or even buy a home someday.
So if responsible use of a credit card can help you build credit, but qualification for a credit card can depend on credit history … how do you get started?
Applying for a student credit card, and using it responsibly, is one way to get started on the right track.
What is a student credit card?
Eric Black, financial coach with Financial Freedom Mentors, explains what makes student credit cards different from other types of credit cards.
“Typically, student credit cards have much lower credit limits than other credit cards,” he says. “However, the requirements to get approved are also typically less stringent, since most students have little to no credit history.”
Student credit cards can also come with financial education, tools like payment reminders and rewards designed especially for students, such as a cash-back boost for making payments on time or for getting good grades.
So yes, you may be able to apply for a credit card even if you’re a student with little to no credit. With that in mind, let’s take a look at some of the best student credit card options available.
1. Journey® Student Rewards from Capital One®
Who’s it for?
Students who want to build good habits. Capital One offers some extra motivation to use this card responsibly, as you can earn a cash-back boost for on-time payments.
Why we like it
When building credit, it’s crucial to always make your monthly credit card payments on time. Late or missed payments can significantly harm your credit scores, because creditors often view it as behavior that might mean you’re less responsible with credit.
The Journey® Student Rewards from Capital One® card offers multiple incentives to stay on top of your payments.
Though you’ll earn 1% cash back on all your eligible purchases, you can boost that total to 1.25% for every billing cycle in which you make at least the minimum payment on time.
As an added incentive, you may be eligible for a credit limit increase after six months of on-time payments. A credit limit increase can also help build your credit, as a higher limit can lower your credit card utilization ratio.
Watch out for
Though the Journey® Student Rewards from Capital One® card is designed for students, you may still need some form of income to qualify for this card. If your monthly income doesn’t exceed your monthly rent or mortgage payment by at least $800, you may not qualify.
Another thing to watch out for is the relatively high variable APR. This card comes with a variable 26.99% APR for purchases and balance transfers. That means if you carry a balance on your card from month to month, you could be stuck paying a ton in interest charges.
As a rule of thumb, you should aim to pay off your balance on time and in full each month to avoid interest charges. If you think you may end up carrying a monthly balance from time to time, this may not be the right credit card for you.
How to use it
Practicing healthy credit habits can pay off with the Journey® Student Rewards from Capital One® card. Making your minimum monthly payments on time may help you achieve a credit limit increase in a relatively short time period.
And for added benefits, take it one step further. If you pay off your full balance on time each month, you’ll likely be able to maximize your cash back rewards while avoiding steep interest charges.
2. Deserve® EDU Mastercard
Who’s it for?
Students with no prior credit history — especially international students.
Why we like it
The Deserve® EDU Mastercard gives college students a chance to start from scratch. This card offers international students the opportunity to qualify for a credit card without having a Social Security number.
For the international student who plans to make overseas trips back home, this card has a few additional benefits. It comes with Mastercard Platinum benefits such as ID theft protection. And foreign transaction fees? None.
And then there are the rewards. As a Deserve® EDU Mastercard cardholder, you’ll get 1% cash back, as statement credits, on all eligible purchases. You’ll also get one year of Amazon Prime Student (a lifetime value of $59) when you use the card to spend $500 in the first three billing cycles and use it to register for the service.
Read our full review of the Deserve® EDU Mastercard.
Watch out for
This card comes with a few limitations that may deter some users.
If you’re planning on using your credit card for a balance transfer or cash advance, you’ll have to look elsewhere, as Deserve® EDU Mastercard offers neither. And take note of the card’s 22.99% variable APR for purchases.
How to use it
Deserve® EDU Mastercard is a great tool to help you start establishing a positive credit history, with responsible use, while earning cash back.
To maximize your rewards, use Deserve® EDU Mastercard to make any purchases you know you can easily afford to repay by the monthly due date. And don’t forget to use the card if you sign up for Amazon Prime Student membership.
What if you can’t qualify for a student credit card?
Even if your current credit situation makes it difficult to qualify for a student credit card, you still have options.
People with limited or no credit may still qualify for secured credit cards.
Black says that secured credit cards are a great place to start, because they help “prevent overspending and teach good spending habits early on.”
Remember: If you’re struggling to build credit from scratch, you’re not alone. Check out the Credit Karma Guide to Building Credit for additional tips to help get you on the right track.
Bottom line
Bad credit doesn’t have to stick with you forever.
Students with little or no credit — yes, even some students without a Social Security number — may have some options to help get things started.
Your first credit card may be a student card with high interest rates and a low credit limit, but with responsible use you may be able to work your way up to other cards that better suit your needs — and better reflect your financial progress.
Still unsure of where to go from here? Get started today by checking your VantageScore 3.0 credit scores from TransUnion and Equifax for free on Credit Karma. The sooner you get the ball rolling, the sooner you can work on getting your credit in A+ condition.