Credit cards for college students are a hot-button topic - and not without reason. With student loan debt on the rise, many advise students to steer clear of credit cards altogether. Some people think it’s even unethical to market credit cards to college students.
At the same time, responsible credit card use can help young adults build financial management skills - and their credit! Responsible use of student cards like these could set college students up for an easier time of renting an apartment, buying a home, getting utilities, and more once they're on their own.
Either way, educating students about credit cards is essential. Because the fact of the matter is that they're going to have the opportunity to obtain credit cards like these!
If you're a parent interested in teaching financial responsibility, or a college student in need of an emergencies-only credit card, you'll want to check out cards that require low or average credit. Here are some great options*:
1. Journey Student Rewards from Capital One
The Journey Student Rewards from Capital One is a simple cash back credit card that offers 1% cash back on purchases, plus a 0.25% bonus cash back each month you pay on time. So, basically, if you pay on time each month, you can get 1.25% cash back on all purchases.
- Credit Monitoring: This is another good card for monitoring and building credit, since it offers free access to your credit score. The Capital One Credit Tracker offers some valuable tools, as well, including a what-if simulator where you can experiment with different financial actions to see how they’ll impact your credit score.
- Credit Increases: Be automatically considered for a credit line increase in as little as 6 months. Since debt-to-credit ratio is an essential part of the credit score equation, this can be a great way to help students build credit.
- Fees: This card has no annual fee, and no foreign transaction fees. It’s great for that semester overseas you’ve been dreaming of.
Bottom Line: This is a good credit-building card, since it allows for automatic consideration for a credit line increase after just six months. However, it’s got a higher interest rate - even for students who already have good credit - so it’s not a good option for financing larger purchases.
2. Wells Fargo Cash Back College Visa Card
Here's a great cash back card for students. You'll get 3% cash back (on up to $2,500 spent) on gas, grocery, and drugstore purchases for the first 6 months, and then 1% cash back in all other categories every day.
- Annual Fee: The card has a $0 annual fee.
- Redeem Rewards: You can redeem cash rewards in $25 increments. Sign up to have them automatically deposited into your checking account or savings account when you hit $25. Or, you can use them as credit on your credit card, request a paper check, or redeem your cash back for travel and more.
- Credit Education Tools: You’ll get online and mobile tools for tracking your spending and payments. You’ll also get credit education tools, tips, and newsletters packed with helpful credit-building information.
Bottom Line: If you’re already in trouble with a high-interest credit card, this one could be a good option for paying down credit at a lower APR, especially if you can qualify for the 11.15%-21.15% APR.
3. Petal® 2 Cash Back, No Fees Visa® Credit Card
The Petal® 2 Cash Back, No Fees Visa® Credit Card issued by WebBank, Member FDIC isn’t technically a student card, but a regular credit card aimed at helping users build credit and earn rewards. The nice thing about the Petal® 2 Cash Back, No Fees Visa® Credit Card is you don’t need a credit history to get it.
When you apply, Petal will ask for your bank account information (using a secure portal). They may use this to see how much money you have coming in and going out of your bank account, part of their cash flow underwriting, as a factor considered when determining whether to approve or deny your application.
- Fees: Petal® 2 Cash Back Card has no annual fee, and no other fees of any kind whether you travel abroad, make a late payment, or your payment doesn’t go through.
- Cash Back Rewards: Petal® 2 Cash Back, No Fees Visa® Credit Card cardholders start earning 1% cash back each time they swipe their cards. Petal will bump that up to 1.5% cash back on eligible purchases if you make 12-months of on-time payments.
- High Credit Limit: Unlike a lot of student cards, the Petal® 2 Cash Back, No Fees Visa® Credit Card has credit limits ranging from $300-$10,000, depending on your approval.
- Budgeting Tools: You’ll manage your Petal® 2 Cash Back, No Fees Visa® Credit Card card in their app, which gives you access to your credit score, budgeting tools, and a payment calculator to see your interest costs.
Bottom Line: This is a great card to build a credit history. You could also potentially get a relatively high credit limit over other credit-building cards. However, the Petal® 2 Cash Back, No Fees Visa® Credit Card isn’t a great fit if you don’t have regular income, since Petal may use the income and expenses in your bank account to determine your eligibility.
4. Petal® 1 “No Annual Fee” Visa® Credit Card
Just the same as the Petal® 2 Cash Back, No Fees Visa® Credit Card, the Petal® 1 “No Annual Fee” Visa® Credit Card is issued by WebBank, Member FDIC. While it’s not specifically designed for students, it’s set up nicely for this demographic. During the simple, streamlined application process, you’ll learn more about your eligibility for both the Petal® 1 “No Annual Fee” Visa® Credit Card and Petal® 2 Cash Back, No Fees Visa® Credit Card Visa. This allows you to compare both offers. Top features of the Petal® 1 “No Annual Fee” Visa® Credit Card include:
- Credit limit: From $300 - $5,000, there’s flexibility. This allows WebBank to approve more applications.
- Competitive APR: Even though an APR of 22.99% - 32.49% Variable sounds high, it’s more competitive than many similar offers.
- Cashback: Receive 2% - 10% cash back at select merchants.
Bottom Line: The Petal® 1 “No Annual Fee” Visa® Credit Card is a good choice for students who want to build a credit history while gaining access to high-level features. The only drawback is that you may not qualify if you don’t have a steady income and/or co-signer.