How to Apply for a Student Credit Card

Student credit cards can help you build a strong credit history and invest in your financial future! Responsible use of a student credit card allows you to build credit, giving you access to lower interest rates when you take out future loans and mortgages. Opening a student credit card is also an excellent way to get in the habit of paying off your credit card each month before you take on a card with higher credit limits.

If you've never had your own credit card before, there are a few things to keep in mind when applying for a student credit card. Unlike traditional credit cards, student credit cards have eligibility requirements that are easier for college students with little or no credit history to meet. Additionally, student credit cards can reward you for your typical spending behavior by giving you cash back on common expenses for college students, like grocery store purchases, entertainment, and takeout.

In this article, Bold.org has broken down the student credit card application process into five easy steps. You'll learn about the eligibility requirements for student credit cards, how to raise your chances of being approved for a student credit card, and the necessary documents you should prepare when applying for a student credit card. To learn more about personal finance and ways to save money in college, check out more blog posts like this one on our exclusive scholarship blog.

And don't forget to create a free Bold.org profile to access hundreds of scholarships for college students through our scholarship search engine. Scholarships can help you save money on tuition and fees and reduce the impact of student loans on your credit.

What is a Student Credit Card?

Credit cards are an essential tool for financial management, and as a student, it's important to have access to build a credit history and handle expenses.

A student credit card is a type of credit card that is specifically intended for college students with little or no credit history. As a result, student credit cards have eligibility requirements that are easier for full-time students to qualify for and higher annual percentage rates or APRs.

A student credit card has higher APRs than a traditional credit card because college students are considered high-risk borrowers. Once you prove that you can use a credit card responsibly and make payments on time, you may be able to open a credit card with a higher credit limit and lower APR.

Similarly, student credit cards generally have lower credit limits, meaning the amount of money you can borrow each month is limited. Lower credit limits can help you control your spending and avoid raising debt as you test the ropes of using your first credit card.

Additionally, student credit cards are usually unsecured, meaning you don't need a minimum deposit to open one. A secured credit card requires applicants to make a minimum deposit, which becomes the credit card owner's credit limit.

Student credit cards also offer rewards geared toward college students’ lifestyles and spending habits. For example, the Discover Student Cash Back Card allows students to earn 5% cash back on Amazon orders, groceries, gas stations, and restaurant meals.

Applying for a Student Credit Card

Credit cards offer a range of benefits such as cashback, rewards, and fallback for emergencies. However, applying for a credit card can be daunting, and it's important to understand the process to ensure approval and responsible use of the card.

Step 1: Check Eligibility Requirements

To qualify for a student credit card, you must meet certain eligibility requirements. These requirements vary depending on the bank or credit card company. However, there are some general guidelines that all student credit card applicants will be held to:

1. Age: You must be at least eighteen years old to qualify for a student credit card.
2. Current Student: You must be currently enrolled in a two-year or four-year college or university to qualify for a student credit card. When submitting your credit card application, you can provide a current, unexpired student ID or a transcript as proof of enrollment.
3. Source of Income: If you are under 21 years old, you must demonstrate that you have an independent income to open a student credit card. This income can include regular deposits into your bank account from a parent or guardian, as well as paychecks you receive from part-time jobs and internships.
   If you don't have sufficient income to meet this requirement, you can ask a parent or guardian who is over 21 and has good credit history to become your co-signer.
   A co-signer is responsible for paying off your credit card if you fall behind on credit card payments, so be sure to choose someone with a reliable income and a strong credit history.
4. U.S. Citizen: You must be a U.S. citizen with a U.S. home address and social security number to open a student credit card. Some banks and credit card issuers may allow international students to open student credit cards, so research the eligibility requirements for different cards.
5. Credit Report: Verify your current credit score to ensure you are in good standing before opening a new student card. You can check your credit report for free at Annual CreditReport.com.
   Luckily, most student credit cards don't expect first-time applicants to have an established credit history. As long as there isn't any incorrect information, your credit history likely won't be detrimental to your application.

Step 2: Research Available Options

Before applying for a student credit card, it's important to research the available options and find the best student card that suits your needs. Here are a few important aspects to keep in mind when comparing different card options on the market:

1. Fees: Some credit cards charge annual fees, setup fees, or monthly fees. For your first student card, we recommend opening a student credit card that does not charge any fees.
2. Annual Percentage Rate (APR): As we mentioned previously, student credit cards have high annual percentage rates because college students are considered high-risk buyers. The APR for a student card generally hovers around twenty percent.
   However, some student credit cards can have an annual percentage rate as high as twenty-seven percent! Make sure to research the annual percentage rate of a card before applying to help your future self avoid racking up credit card debt should you fail to make payments on time.
3. Cashback Rewards: Student credit cards offer a variety of perks for college students and can help you save money on everyday purchases at grocery stores, restaurants, and more! Choose a student card that rewards you for your typical spending habits.

Step 3: Gather Necessary Documents

Once you've chosen the student credit card you want to apply for, you'll need to gather the necessary documents. These documents usually include proof of income, proof of enrollment, and identification documents.

Proof of income may include pay stubs or bank stubs, while proof of enrollment can be your current student ID, transcript, or a letter from your school.

Identification documents such as a driver's license or passport may also be required. Finally, be sure to have your social security number handy, as this is required for all credit card applications.

Step 4: Fill Out Application

After researching options and preparing the necessary documents, you can finally complete the application!

You can apply for a credit card online or in person at your local bank or credit card company. Applying online is often the most convenient option of the two.

It's important to provide accurate and honest information on the application. Make sure to carefully read the terms and conditions before submitting your application.

Step 5: Wait for Approval

Finally, all that's left for you to do is sit back and wait to hear back from the bank or credit card company. The approval process timeline varies depending on the issuer. Some credit card companies offer instant approval, and you'll be notified in person or online that you've been approved right after you submit your application.

Others may take several days or weeks to process the application. Once you've been approved, you'll receive your credit card in the mail.

If the credit card issuer rejects your application, you'll receive a letter explaining the reasoning behind the credit card company's decision called an adverse action notice. Based on the letter, you can take action to improve your odds of qualifying for a student credit card in the future or re-submit your application with more documentation.

Frequently Asked Questions

How Do I Improve My Chance of Qualifying for a Student Credit Card?

You can optimize your chances of being approved for a student credit card in a few ways. To begin, having a part-time job or multiple part-time jobs demonstrates that you have a source of independent income and are responsible enough to take on the financial responsibility of handling a credit card. You can also boost your student credit card application by paying on-time bills like rent.

Having a reliable payment history further establishes your credibility as someone who is able to manage financial responsibilities. Prior to opening your own student cards, you can also become an authorized user on a credit card owned by a parent or family member. The primary cardholder of that credit card will be responsible for making payments, but as an authorized user, you can make payments using the credit card and benefit from the primary cardholder's good credit score.

What are the Best Student Credit Cards?

There is no one best student credit card that fits the needs of every student. Rather, the best credit card for you will be one that rewards you for your typical spending behavior. Choose a card that gives you cash back on purchases you would make even without a credit card.

For example, the Discover Student Cash Back Card allows students to earn 5% cash back on Amazon orders, groceries, gas stations, and restaurant meals. Another popular student credit card, the Capital One SavorOne Student Cash Rewards Credit Card, gives you 3% cash back on dining, entertainment, streaming services, and groceries.

What Alternatives Exist for Student Credit Cards?

If you don't think you're ready to take on the responsibility of opening your own credit card or you don't yet meet the eligibility requirements, there are a few other ways you can start to build your credit history and practice more financial responsibility. As mentioned previously, you can sign onto a family member's credit card as an authorized user and build credit alongside the primary cardholder.

Another option is to ask a family member or friend over 21 to be a cosigner when you sign up for a credit card. The cosigner will then be responsible for paying off any credit card payments you fall behind. By following the steps outlined in this blog post, you'll be well-equipped to find the best credit card for your needs, fill out the application, and use the credit card responsibly.

You can learn more about student loan interest, federal student loans, and other personal finance tips for college students on our scholarship blog. And be sure to create a free Bold.org profile to access hundreds of scholarships and save money on tuition and fees this semester.