College Student Series (Article 5): Which Credit Cards Are Best For Me?

We have decided to write some articles around finance and travel for college-age individuals with little to no credit history. Because traveling using points requires a healthy understanding of financial information and how to budget, this series of articles will address how to LEARN the best and safest ways to start a credit history. Our passion in life is to help others through teaching, and we firmly believe that high schoolers and college students need to be more educated in the areas of finance. Please read the information below carefully, and really slow down instead of skimming, because every piece builds on the next. Look for an article in this series over the next few Sunday afternoons.

Let me start by saying if you have not read the previous four articles, you need to start there and read them in order before you get to this point. The last thing I want is for someone to apply for a credit card and not know how to use it correctly!

Links for the prior articles can be found below:

Why is Credit Important?

How is Credit Calculated? Par 1

How is Credit Calculated? Part 2

What Does a Credit Score Mean?

After thoroughly reading the above articles, you should have come away with a good idea of what you need good credit and how to manage your credit score. The next step is to get a credit card so that your credit grows over time to improve your credit history. Using the credit card correctly will also prove you know how to manage money and will make you attractive as a potential borrower.

***I am writing this article mainly based on my opinion of the perks of each card. I am giving my opinion of what I would do if I was a freshman in college looking to build credit***

This is by far the most common option for college students as you probably already have a relationship with a bank where you have a checking account or savings account. You might have to put your parents on as a co-signer, and the best advice here is to let your parents guide you at first and then gradually let you take more and more full responsibility for your card and payments.

Here are a few options for credit cards with a bank where you have your checking or savings account, but keep in mind that this list is not extensive. It is just the most popular ones:

Bank of America Cash Rewards Card for Students

This card is for those with a Bank of America checking or savings account, and it will give you cash back!

You’ll get:

3% back spent on gas

2% back spent on grocery and wholesale clubs

1% cash back everywhere else

You also get a sign up bonus of $150 if you spend $500 in the 90 days from the account open date.

Thoughts on this card: I am surprised at the generous cash back!

I know you will likely have to have a co-signer for this card, but I cannot emphasize enough the importance of learning how to use a credit card AND take advantage of cash back options. This will make you a stronger and quicker learner for cash back/points options in the future.

Verdict: If I was a college student, I would get this card!

USBank Cash 365 American Express Card

If you have an account with USBank already, you may be interested in this American Express card. It’s perks are:

2% cash back on any purchase for the first year

1.5% cash back after the first year

Extended warranty and purchase benefits (find out more by clicking the link on the card name above)

Thoughts on the card: I like the 2% cash back on any purchase, but there is no sign-up bonus. However, get this card if you have a USBank checking or savings account.

You will likely need a co-signer for this card, but if you can work that out with your parents, this card has one major advantage: You establish a relationship early on with American Express. Right now Chase and American Express are THE TWO competitors when it comes to rewards cards, so getting in with them early on can only be a benefit as you prove you are credit-worthy.

Verdict: I would get this card if I had an account already with USBank.

What if my bank doesn’t have a true college student credit card?

Banks like SunTrust, Regions, etc. will want you to stick with them as you transition into adulthood. Therefore, before applying for a credit card outside of your banking institution, always talk with your bank to see what they can offer you! If you don’t like the offer, then consider the implications of transferring your checking and/or savings account to Bank of America, or get a card not associated with a local bank!

The cards listed in this section are most likely not going to be in conjunction with your checking or savings accounts. These are cards that are totally built for students and have cash back incentives. You will likely need someone to co-sign for them. I would only go this route if you already tried to get a card with your own bank and did not like the options!

Discover It Card for College Students

Discover is a popular issuing bank, but adults serious in the credit card rewards industry are not going to have many, if any, Discover cards. However, this card does have some perks for college students:

No annual fee

$20 statement credit after a 3.0 GPA or higher every year

5% cash back on rotating categories (like gas, food, movies, etc.)

Thoughts on this card: I would only get it if I couldn’t have the Bank of America, USBank, or Citi cards.

Rotating categories are popular and it would be a good thing to learn how to maximize them, but with a low credit limit you are MORE LIKELY to spend more than 10% of your credit limit each month. This means you won’t raise your score as quickly!

Verdict: I’ll pass on this one.

Citi ThankYou Preferred Card for College Students

This card issuer, Citi, is debatably the 3rd most popular credit card issuer for rewards cards. It would be nice to start a relationship with them while in college. Perks are:

Sign-up bonus of 2,500 points when spending $500 in the first 3 months

2% cash back on dining and entertainment

1% cash back everywhere else

Thoughts on the card: Not as good as the local bank issued cards above, but better than Discover and Capital One.

Learning how to use Citi ThankYou points is an asset that will pay off as you become an adult! This reward currency is especially valuable with certain airlines.

Verdict: Pass unless I can’t get a local bank card.

Journey Student Rewards Card from Capital One

This is the minimum rewards card, in my opinion, for college students. You will probably still need a co-signer, and the card has fewer perks:

1% cash back on purchases

1.25% cash back if you pay your balance on time

No annual fee

No sign-up bonus

Thoughts on the card: So far, this would be the last card on my list.

The bonuses are not as good as the others, and there is no sign up bonus. Capital One is currently not a true competitor for rewards cards in the adult world.

Verdict: Last resort for getting a card with rewards.

If your parents won’t co-sign with you for a card, or if you don’t want your parents to co-sign with you, then you might have to start with a secured credit card. This means you have to place a deposit down before you get the card. A secured card is called this because it is kind of like a security deposit you would place on an apartment.

I suggest looking at this website called WalletHub in order to find which secured credit card works for you. Remember, these cards are meant to build your credit, so manage your credit correctly!

Getting one credit card is plenty while in college. Getting zero credit cards in college will likely hinder you from getting loans when you graduate without also getting a signature from a parent. The goal here is to build financial independence as soon as possible!

I have listed the cards in order of the way I would choose them if I was starting my college years:

1. Bank of America Cash Rewards Card for Students

2. USBank Cash 365 American Express Card

3. Talk to your bank about what they can offer you

4. Citi ThankYou Preferred Card for College Students

5. Discover It Card for College Students

6. Journey Student Rewards Card from Capital One

7. Secured Credit Card

As always, please share this article with your friends so that we are all more educated on which cards are the best!