What is a student credit card?

If you’re a college student, you likely have a lot on your plate between classwork, extracurriculars and a part-time job (or two). Between all of these responsibilities, the task of building a good credit score may not be at the top of your to-do list.

However, if you take the time to build a positive credit history now, it can save you a lot of trouble — and money — in the future. And for many college students, building credit may come in the form of a student credit card. These types of starter cards can help you make purchases, cover expenses, earn rewards and even boost your credit score if you use them wisely. Here’s everything you need to know about student credit cards.

What is a student credit card?

A student credit card is a line of credit designed to meet the needs of college students. These cards tend to have lower credit limits and higher interest rates, as they are geared toward new credit card users.

The best student credit cards help college students build a positive credit history while also offering credit card benefits, like cash back rewards. A few student credit cards even offer rewards for good grades.

But the real benefit of a student credit card is the opportunity to establish good credit at a young age. Building good credit is one of the most important financial moves you can make, so the sooner you get started, the better.

Minimum age and income for student cards

The Credit Card Act of 2009 effectively banned credit card issuers from issuing cards to people under 21, making it much more difficult for students to get them. If you are under 21, the only way you can be approved for a credit card is if a co-signer is willing to take on legal responsibility for charges made to the card — or you can prove that you have enough income to cover your debts.

Very few issuers allow co-signers. However, you can become an authorized user on someone else’s credit card — even if you’re still a minor. You won’t have a line of credit of your own, but you’ll be able to use the credit card to make purchases and start building your credit history.

Student credit card benefits

There are a few reasons why it can make sense to get a student credit card, including:

For emergencies

You may have been in a situation where you needed to pay for something on the spot but didn’t have the cash to cover it. Relying too much on credit can get you into trouble, but having a credit card to cover these types of issues can make life easier, as long as you have a plan to pay it off.

To build credit

Your credit score plays a significant role in your financial life. Whether you’re applying for a credit card, signing up for a new phone plan or taking out your first car loan, having good credit will make it easier, which is why it’s smart to build credit as early as possible.

People with good credit, which is FICO credit scores of 670 or above, are more likely to be approved for credit cards, loans and mortgages. Those with higher credit scores typically get lower interest rates, too, which can save you a lot of money over time.

To earn rewards

Credit cards can also offer you rewards on your spending — and, in many cases, without paying an annual fee. For example, the Discover it® Student Cash Back card, offers up to 5 percent back on categories that change every three months and 1 percent on everything else.

The Capital One SavorOne Student Cash Rewards Credit Card offers unlimited 5 percent cash back on hotel and rental car bookings through Capital One Travel; 3 percent cash back on dining, entertainment, popular streaming services and grocery store purchases; 8 percent on Capital One Entertainment purchases; and 1 percent on everything else.

What to do if you don’t qualify for a student credit card

If you’re not eligible for a student credit card, there are other ways to build a positive credit history and access the benefits that a credit card can offer. Here are some options to consider:

Become an authorized user

You may benefit from being added as an authorized user to one of your parent’s credit cards. This allows you to piggyback on their responsible credit habits and begin building positive credit histories of your own. As an authorized user, you’ll be able to make purchases, but your parents are ultimately responsible for making on-time payments on the card.

Find a co-signer

In some cases, you may be able to access a line of credit by getting a parent or guardian to co-sign a credit card. If you miss credit card payments or rack up balances you can’t pay off, your co-signer — who is legally liable for any charges made to the card — may be asked to step up and pay off the debts.

Only a few credit card issuers allow co-signing, so keep that in mind as you consider your options.

Apply for a secured card

If you don’t qualify for a standard credit card, you could apply for a secured credit card instead. With a secured credit card, you put down a security deposit in exchange for access to a line of credit (which is typically equal to the deposit). If you use your secured credit card responsibly, your credit card issuer may allow you to graduate to a standard (unsecured) credit card in the future.

Add your rent and utility payments to your credit history

There’s one more way for college students to improve their credit histories and boost their credit scores — and that’s by reporting their rent and utility payments to the credit bureaus. Services like Experian Boost, which allow you to include bill payments on your Experian credit report, can help you build credit without a credit card.

Bottom line

If you’re a college student learning how to use credit for the first time, a student credit card could help. By using the card responsibly and making other smart credit moves, you could land a better credit card before you know it — and build a solid financial future.