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Before applying for a student credit card, carefully consider your options. Here are some questions to ask:

  • Are you ready for a credit card? You can damage your credit, and it can take years to rebuild if you miss payments or default on the amount you owe.
  • Do you understand what you’re signing up for? If you don’t feel you have the knowledge or experience with credit or credit cards yet, research more to increase your understanding.
  • Are you trying to maximize earnings, or do you value simplicity? If you don’t want to manage revolving categories, a flat-rate card is probably a better choice. Some cards offer generous welcome bonuses but may not be best for actual category bonuses. Are you looking for a rewards kick-start or a generous ongoing rewards program?

Carefully consider your spending needs when selecting the right card for you.

Annual Fees

Many credit cards charge annual fees. Typically, these cards also provide better rewards, more benefits and other valuable perks. You should consider several factors before deciding to get a credit card with or without an annual fee. The most important consideration is whether or not you’ll receive enough additional benefits to compensate for the annual fee. It may be intuitive to ask, “Will the rewards or benefits of this card pay for the fee?” But the question you should ask is, “Will the rewards and benefits of the card pay for the annual fee and bring me more value than a card with no annual fee?”

Another factor to consider—especially as a student with little to no credit history—is that an annual fee is often immediately charged to the credit card account, which reduces your available credit. If your card’s annual fee is $95 and you’re only granted a $300 credit limit, you only have $205 in available credit. An annual fee can make for a large bill on top of your regular spending.

It’s recommended that you keep your debt to available credit or credit utilization low. Experts recommend you stay below 30%. That means that a balance of less than $100 is ideal. Of course, with a small credit limit, this may not always be possible. Focus on paying your balance in full each month, and your credit will improve over time.

Interest Rates and Fees

Consider the card’s annual percentage rate (APR) or the interest you’ll be charged if you carry a balance. You may have heard that credit cards come with hidden fees, but the card’s terms and conditions agreement outlines, in detail, any fees you will face. Read the fine print before applying and then review the agreement when the card arrives. It’s a good idea to keep this document for future reference.

Typical credit card fees to be aware of include:

  • Annual fee
  • Balance transfer fee
  • Cash advance fee
  • Foreign transaction fee
  • Late payment fee
  • Returned payment fee

Less common fees that should encourage you to be cautious and read with extra care:

  • Account maintenance fee
  • Additional card fee
  • Application fee

Credit Reporting

A major reason many students should consider student credit cards is the opportunity to build healthy credit. This won’t happen, though, if the card issuer doesn’t report your account information to major credit bureaus. For best results, find a card issuer that reports to all three major consumer credit bureaus: Experian, Equifax and Transunion. Using a student card to build stronger credit will help you gain access to more affordable types of loans and more rewarding credit card offers.


Student credit cards often offer decent rewards in the form of either cash back or points. Though student card rewards remain unlikely to compete with the best rewards cards on the market, they’re often better than rewards offered by secured cards and other options for rebuilding your credit.

Security Deposits

The student cards covered above are unsecured credit cards, so they don’t require security deposits. Secured credit cards are another credit card option. These require cardholders to provide a security deposit that usually determines the amount of available credit. They can be a great option, if you’re worried about spending out of control.

Unsecured student cards with no security deposit can be a huge help to students. Secured cards hold your deposit until you close the account or graduate to an unsecured card, so an unsecured card can help you keep money in the bank.

Foreign Transaction Fees and International Acceptance

Plan to travel abroad? You’ll want to make sure your card will be accepted internationally and not charge you for each purchase abroad. Card networks play an important role in international acceptance: Visa and Mastercard are the most widely accepted by international merchants, but Discover isn’t accepted in all foreign countries.

Foreign transaction fees typically range between 1% and 3% depending on the card and issuer, but many travel-oriented cards forgo these fees entirely. Even if you don’t leave the U.S., these fees can kick in if you shop at international retailers. Either way, these fees can stack up quickly and make travel much more expensive. Be sure not to confuse foreign transaction fees with currency conversion fees.

Pro Tip

If a merchant gives you the choice to pay in the local currency or U.S. dollars, choose the local currency. It’s usually the cheaper option.

Travel benefits may be another consideration. The Bank of America® Travel Rewards credit card for Students charges no foreign transaction fees and would be widely accepted by most international merchants that accept credit cards, but goes even further to offer several benefits aimed toward students traveling abroad.

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