Guide | Finding the Best Credit Cards for Students with No Credit History
Costs add up for college students rather quickly: textbooks, a new laptop, lava lamps, dorm room posters, and the requisite school hoodies. It can leave one asking, “What are the best credit cards for students with no credit history?”
Fortunately, student credit cards with no credit history required can ease young adults into financial independence and reward good habits.
Nearly all major banks offer some form of credit cards for college students with no credit. Each has its own upsides.
Image Source: College Students with No Credit
What are the best credit cards for college students with no credit history?
We’ve sorted through the options to decipher which student credit cards with no credit necessary fill the needs of various students. Below, we’ll address several keys to picking which credit cards to apply for with no credit, including:
- Requirements for getting student credit cards with no credit
- What perks do the best credit cards for students with no credit history offer?
- Which student credit card with no credit needed is right for you?
- How to use — not abuse — credit cards for someone with no credit
We will parse the requirements of the myriad credit cards to apply for with no credit to help students make the wisest possible decision. Because you should be focused on grades, not your credit score.
Requirements for a Student Credit Card with No Credit
Credit cards for college students with no credit lay the foundation for a bright financial future by building credit scores which can later translate to mortgages, loans, and jobs.
Credit cards for someone with no credit can also help establish the good habits necessary for fiscal stability in adulthood.
Your use — or abuse — of the cards will have a significant impact upon your FICO score, a credit metric used by lenders to determine whether or not to let you borrow money, and at what interest rate. Before you even start searching for a student credit card, check to see what your FICO score is. We’ve already made a guide to help you.
Your FICO score will help determine which is the best credit card for college students with no credit for your particular situation.
Lawmakers in Congress understood the pitfalls and traps of student credit cards with no credit required. Handled poorly, these credit cards can make building long-term credit a struggle, if not nearly impossible.
To combat this, Congress passed the Credit Card Accountability, Responsibility, and Disclosure Act of 2009 (or simply the Credit CARD Act), which requires credit card applicants younger than 21 years old to provide proof of financial independence, such as an income or savings, or a co-signer at least 21 years old who is willing to vouch for someone’s credit-worthiness.
It essentially eliminates student credit cards with no credit required: employment helps start building credit; co-signers offer their credit as leverage. Still, options abound for credit cards for someone with no credit.
Don’t expect companies to reach you with offers for student credit cards with no credit. The Credit CARD Act prohibits issuers from giving out goodies on campus while advertising credit cards for college students with no credit, nor can they send pre-approved offers to anyone under 21 years of age.
These legal hurdles substantially lowered the number of credit cards issued for college students with no credit, and they may make it harder to get a student credit card with no credit. A Bankrate survey found that 63 percent of young adults have no credit cards, nearly twice as many as those 30 and older.
Meeting the legal requirements for the best student credit cards with no credit history required may be tricky. Having a steady income from either a job or savings ready to pay off credit card debt is a plus. Even better, having a parent or guardian co-sign for a student credit card with no credit gives a sound financial back-up, as well as a financial overseer with an interest in monitoring your financial decisions.
If you manage to cross those barriers, the best credit cards for college students with no credit history offer two options:
- Secured cards: These cards require an up-front deposit to secure a line of credit. These are some of the best credit cards for students with no credit history, making you more likely to be approved for a cost at the onset. They can also help build credit more easily for the future.
- Unsecured cards: These have a much lower credit line with stricter spending limits while packing the usual rewards, bonuses, and introductory rates. This means that while it may look and act like a regular credit card for someone with no credit, it will cost more and allow you to spend less until good credit is established.
What Perks Do the Best Credit Cards for Students with No Credit History Offer?
The variety of cards available also means a broad range of perks, which could be the key to deciding the best credit cards for students with no credit history.
Depending on your financial situation, spending needs, and what you want to achieve during college, getting the right perks will maximize the benefit of your student credit card.
Some of the rewards include:
- Cash back
- Good grades bonuses
- No annual fees
- Free credit scores
- Points systems, with points that can be redeemed for specific items
- Fraud coverage
All of the above should be taken into account when choosing which credit cards to apply for with no credit. But the following must be looked over diligently, as they vary from card to card and lay the foundation for making a wise decision.
Introductory Rates and APR
Many cards offer a 0% introductory APR. This allows students to make interest-free purchases during their initial use of the credit card — if they pay off those purchases before the variable interest rate kicks in.
Cash Back and Points Systems
Here, things become a bit tricky. Credit cards for college students with no credit offer an often-convoluted rewards system when using the card, with bonuses offered for favored merchants.
Finding the right combination of rewards can maximize the benefit of having a student credit card with no credit history, well beyond the extra spending power and building your credit score.
Good Grade Bonuses
Perfect for the book worm, some student credit cards with no credit required give cash back for maintaining a high GPA. These cards could help nudge hesitant co-signers into backing students while also incentivizing good grades.
Free Credit Scores
Credit cards for college students with no credit offer the cardholder an opportunity to build credit well before their professional career starts. But there’s no use in pursuing the ideal credit score — which opens the door to cheaper car insurance and lower interest rates on loans — if you can’t measure your progress.
Some credit cards offer free credit reports, allowing the cardholder to see their FICO score, in some cases even on their statement. Make sure your credit card for students with no credit reports your on-time payments to at least one of the consumer credit reporting companies.
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Which Student Credit Card with No Credit Requirements Is Right for You?
Of all the lenders and banks offering credit cards for college students with no credit, five offer the best combination of perks and long-term benefits:
- Discover it® for Students
- Discover it® Chrome
- Journey Student Credit Card from Capital One
- Upromise® World Mastercard®
- U.S. Bank Secured Visa® Card
The above credit cards for college students with no credit represent the best of an admittedly-small bunch. Legal restrictions have made students harder to lend to, and less profitable for credit card companies.
The terms and restrictions placed on credit cards for someone with no credit show the lenders’ attempts at covering their interests while also incentivizing good behavior from the cardholder.
Still, each card offers its own bit of wiggle room. If used with care and forethought, cardholders could reap big dividends that compound through adulthood and into retirement. But let’s glance at each to determine which are the best credit cards for students with no credit history.
Discover it® for Students: For the Newbies
The “Discover it® for Students” credit card offers the broadest mix of rewards and smart incentives for anyone just learning how to use a credit card. Overall, it is one of the best credit cards for students with no credit history, which creditcards.com, a ratings site and online marketplace, agreed with in 2016. Its advantages include:
- Cash back for ending the school year with a GPA higher than 3.0
- 5% cash back for gas and Amazon.com purchases depending on the time of year, as well as 1% cash back on all other purchases; Discover also matches your cash back rewards balance after your first year
- A compatible app which allows you to freeze the card if it gets lost or stolen
- Free FICO score on monthly and online statements
Discover it® Chrome Student Card: For the Daily Driver
The “Discover it® Chrome for Students” should rank among the top credit cards to apply for with no credit if a substantial amount of your time is spent on the road.
Image Source: Best Student Credit Cards with No Credit
Like its sibling, the “Discover it® Chrome” offers a good grades incentive, FICO scores, and similar rates. Its rewards structure, however, makes it the best card for students with no credit history who also enjoy takeout and pay a lot at the pump. Rather than having a rotating schedule of rewards offers, the Chrome’s cash back programs focuses solely on gas stations and restaurants.
Journey Student Rewards from Capital One: For the Passport Stamper
The Journey Student Rewards card from Capital One offers the best student credit card for students with no credit history and a strong desire to travel. While other cards charge extra for withdrawals overseas and at home, the Journey Student card doesn’t.
This means those planning to spend a semester or more abroad need look no further for a student credit card with no credit requirements. It also offers:
- Flat 1% cash back rewards on all your purchases, which jumps to 1.25% if you pay on time that month
- Free access to CreditWise, an app which allows you to monitor your credit score and even simulate what decisions could hurt or help your score in the future
- A higher credit line if you pay your first five monthly bills on time
Upromise® World Mastercard®: For the Shrewd Shopper
The “Upromise® World Mastercard®,” with its many ways to earn cash back, offers one of the best credit cards for students with no credit history who want to keep their high-octane shopping habits. The card offers high cash-back reward rates for purchases at select retailers, while also encouraging savings.
If done correctly and with a bit of patience, the card can earn you up to 10% in cash back rewards. It also offers:
- Cash back in the form of checks or deposits into high-yield savings accounts, as well as payments toward a student loan
- A $50 cash back bonus within days of opening your account
U.S. Bank Secured Visa®: The Surefire Credit Booster
For those looking for a quick credit boost or trying to keep their spending in check, the “U.S. Bank Secured Visa” is one of the best credit cards for students with no credit history. The card essentially is limited by your own deposits and won’t allow you to overspend. It still puts the onus on the cardholder to pay on time, helping build smart habits without leading to financial ruin.
Student credit cards with no credit required allow some leeway, which could be helpful but could also spell trouble. But this secured card forces you to live within your means. Within 12 months of timely payments, U.S. Bank may allow you to switch to an unsecured credit card.
How to Use — Not Abuse — Credit Cards for Someone with No Credit
Remember: besides helping cover the costs of college, the best credit cards for students with no credit history lay the groundwork for a solid financial future. As such, avoid having more than one credit card at a time, which might lower the credit score you’re trying raise.
Lenders and credit card companies understand how cash-strapped students become and won’t offer a high credit limit. Keep the student credit cards with no credit requirements as a safety valve for when you, inevitably, need to dig a little deeper into your funds. Do not, however, make swiping for every purchase a habit.
Also, avoid going over your credit limit. This can only hurt the credit score you’re working so hard to build. Try to pay your student credit card bills in full at the end of every month, even if it means getting a weekend job.
Finally, avoid the real financial killer: cash advances, which start charging interest the moment you make a withdrawal. It’s a credit card, not a debit card. Even the best credit cards for students with no credit history charge substantially higher interest on cash advances.
Build the good habits of financially sound thinking early with your student credit card with no credit requirements. Your future family, car loans, and even mortgage will thank you for it.
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