Credit Cards 101: Best Credit Cards for College Students

Jump To: Credit Buiding | Reading Fine Print | Secured Cards | Compare Rates | Fees | Rewards | Using Credit Wisely

Preparing for a new semester can be both exciting and overwhelming. College students everywhere are likely checking off a familiar to-do list. Dorm room essentials – check. Meal plan – check. Course schedule and books – check.

As you head back to class, it’s also a great time to assess your financial situation, including how you can build your credit profile. The world of credit cards can be a lot to take in, especially if you’re new to it.

This blog will outline some of the best features and benefits to look for in a credit card and help you embark on a new school year with financial confidence.

In a snapshot - the best credit cards for college students combine credit building features, low rates, no annual fees, and rewards programs. Let’s dive in!

Choosing the Right Credit Card

Not all credit cards are the same, and the best option depends on your financial goals and credit history. Students who pay their balance in full each month may benefit from a rewards or cash back card that provides value on everyday purchases. Those focused on minimizing interest costs may prefer a low-rate card. Students with little or no credit history may want to consider a secured credit card as a way to establish credit while learning responsible credit habits. Before applying, compare rates, fees, rewards, and credit requirements to find the card that best fits your needs.

Building Credit Wisely

If you’re a college student just starting out, you can begin to build your credit with wise use of a low APR credit card or secured card. Credit unions, like Community First, offer highly competitive rates on credit cards. Before applying for a credit card or responding to a promotional offer, compare your options and explore our low rates on credit cards.

Take Notes

As you do your homework on credit cards, read the fine print. If you’re offered a card with an introductory APR, take note of when the introductory period ends, and know what the standard rate will be.

APR stands for annual percentage rate. This is the interest, plus any fees, that you will be charged in a year on your balance. Current average interest rates on credit card offers** are 23.80% APR, with many major cards offering rates close to 30%. That’s why it is important to review the card disclosures and understand what you could be subject to.

Want to learn more about how interest works? Take a crash course in interest rates in our blog, “Interest Rates 101.”

Secured Credit Cards

If you haven’t established a credit profile, or you have a low credit score, look into applying for a secured credit card. With a secured card, you deposit funds into a secured savings account, which then determines your credit limit. Your credit limit is typically equal to the amount you place in the secured savings account. For example, if you put down $500 on a secured card, you can charge up to that amount. You can use the card for everyday purchases, make monthly payments, and build a positive credit history when you pay on time and keep balances manageable.

Here is a quick comparison of secured credit card rates:

*Interest rates are subject to change at any time. View current Community First credit card rates.

You will also notice the terms “variable” and “non-variable” when reviewing credit card rates. A variable rate can change, which means what you pay on balances can increase. If you’re a college student on a strict budget, keeping payments predictable can feel like a life saver. The Community First secured card comes with a non-variable rate, which can provide peace of mind as you build your credit profile and manage your busy college schedule.

No Fees

Some credit cards charge an annual fee, which can range greatly - anywhere from $50 to $800 for premium-level cards**. With everything student life can throw at you, the last thing you need is another fee.

An annual fee is what some credit card companies charge to have their card, regardless of whether you use it or not. While the annual fee can often mean you have access to higher rewards rates on purchases in certain categories, can come with premium benefits like discounts on hotels and travel, and more – you can often find cards with these benefits with NO annual fee. That’s why it’s important to do your research and compare a few cards before you decide.

Rewards

Credit card rewards can help you get more value from everyday purchases. Depending on the card, rewards may be earned as cash back or points that can be redeemed for travel, merchandise, gift cards, statement credits, and more. Whether you're buying textbooks, groceries, gas, or enjoying a night out with friends, a rewards card can help you earn benefits on purchases you already make. Before choosing a rewards credit card, take time to understand how rewards are earned and redeemed. Some cards offer cash back on qualifying purchases, while others provide points that can be redeemed for a variety of rewards. Review the card's features and consider your spending habits to determine which rewards program best aligns with your financial goals.

Quick Tips for After You Get Approved

Even though this is an exciting experience, and it might be tempting to celebrate, remember that a credit card is a tool. It’s important to use your credit card wisely and not build bad money habits.

• Read the Terms – Don’t forget to read the contract and make sure you understand all the fees, late payment terms, and interest rate.
• Don’t Rely on Your Card – Credit is important, and credit cards are a great way to build credit, but don’t rely on your card. Only spend what you can pay back. And try to keep your utilization below 30%. In other words, if you have $1,000 credit limit, try to only use less than $300 at a time.
• Pay in Full Every Month – Any balance not paid in full each month means you’re probably going to spend more money in the long run. Keep this example in mind: If you have a $30 minimum payment and that’s all you pay each month, with a 20% APR, a $500 balance can turn into you owing over $1,000 within 6 months.

Conclusion

As you navigate student life, building your financial know-how is just as important as acing your mid-terms.

Community First was founded as a teacher’s credit union. We have a passion for education, and for improving our members lives. Discover all the benefits of Community First membership, including free Financial Wellness modules that can help you prepare for every phase of life.

All credit card offers are subject to credit approval. All credit union programs, rates, terms and conditions are subject to change at any time without prior notice. Terms and conditions apply. Credit, income, and other restrictions apply. All introductory offers are only available for new credit cards. You may not be eligible for introductory credit card offers if you opened a Community First Credit Card within the last 15 months from the date of the new application and you received introductory APR(s), fees, and/or bonus rewards offers - even if that account is closed and has a $0 balance. The minimum limit is $500.

**All information contained in this blog is for informational purposes only. The credit union makes no representations as to the accuracy, completeness, suitability, or validity, of any information. The credit union is not responsible for any errors, omissions, or any losses, injuries, or damages arising from its display or use. All information is provided AS IS and with no warranties and confers no rights.

The credit union is not responsible for material that is found through non-credit union links posted on this blog site. Ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.