Are you a college student looking to apply for a credit card?
We’ve put together a step-by-step guide to help you navigate the application process and find the best credit card for your needs.
As a college student, it might seem hard to get a credit card.
Having a credit card, on the other hand, can help you build your credit past and learn how to handle money.
In this full guide, we’ll show you how to apply for a credit card, taking into account things like your credit history, income, and the perks of the card.
We’ll also give you examples and situations from real life to help you make an informed choice and find the best card for your needs.
Taking a look at your finances
Take a moment to look at your finances before you apply for a credit card:
A. Credit History
Review your credit report and score if you have a credit background.
You may not have much or any credit background if you are in college.
This can make it harder for you to get some cards.
B. Income
Credit card issuers will look at your paycheck to decide how much credit they will give you.
As a student, your income may be smaller than that of a full-time worker, which could affect your chances of getting approved and your credit limit.
C. Spending Habits
Think about how you spend money and what you want to do with it.
Are you looking for a card that will give you benefits or help you build your credit?
Researching Credit Card Options
With your budget in mind, start looking into credit card options:
A. Credit Cards for Students
Student credit cards are made for college students who don’t have much of a credit background.
Most of the time, these cards have lower credit limits, easier-to-meet approval standards, and helpful tools to help you manage your money.
Emily was a junior in college and had never had credit before.
She wanted a credit card to help her build credit.
She looked into student credit cards and picked the Discover it® Student Cash Back card because it had no annual fee and cash back on rotating categories.
Emily used the card in a responsible way by paying off the full amount every month.
This helped her build her credit history.
B. Credit Cards with a deposit
If you have bad credit or none at all, you might want to get a protected credit card.
With these cards, you have to put down a security deposit, which works as collateral and lets you know how much credit you can use.
James, a junior in college, had a low credit score, which made it hard for him to get a standard credit card.
He chose the Capital One Platinum Secured secured credit card, which needed a $200 security deposit.
James’s credit score slowly went up as he made payments on time and kept his amount low.
C. Credit Cards with Points
If you have good credit and want to earn prizes, you might want to get a credit card with rewards.
When you use these cards to buy everyday things, you get cash back, points, or miles.
Sophia, a senior in college with a good credit score, wanted to get a credit card so she could get trip rewards.
She did study and applied for the Bank of America® Travel Rewards Credit Card for Students, which gave her points for every dollar she spent and had no annual fee.
Sophia used the card for everyday purchases and earned points that she later used to pay for flights and hotel stays on her trip after she graduated.
Comparing Card Benefits and Features
Compare the benefits and features of each card when you’re looking into them:
A. Rate of Interest per Year (APR)
The annual percentage rate (APR) is the interest rate on unpaid debt.
If you plan to carry a debt, look for a card with a low APR.
B. Fees per year
Some credit cards have fees every year.
If you are a student, you might want to stay away from cards with high yearly fees.
C. Benefits and rewards
Compare the benefits and perks that each card has to offer.
These can be things like cash back, free trips, or discounts at certain stores.
Applying for a Credit Card
Once you’ve found the right credit card for your needs, it’s time to apply:
A. Get the information you need
Gather the information you need for your application, such as your Social Security number, contact information, and data about your income.
B. Fill out the Application Form
Depending on what the provider wants, you can send your application online or by mail.
Make sure to check your information twice to make sure it is correct before sending it.
C. Wait for the Decision
Credit card companies may take a few days or even a few weeks to look over your application.
During this time, you might be able to check the progress of your application online or by calling the issuer’s customer service.
D. Know what the words mean
If you get the card, look over the terms and conditions, such as the interest rate, credit limit, and fees.
Make sure you know exactly what you have to do as a customer.
When your student credit card application is declined
When you are in college, the standard way to get a credit card might not work for everyone.
Here are some other tips and real-life examples to help you get through the credit card application process if you run into problems:
A. Co-signer to the Rescue
Hannah, a freshman in college, had trouble getting approved for a student credit card because she didn’t have a credit background.
Her part-time job only gave her a small amount of money, which hurt her application.
Tip: If you can’t get a credit card on your own, ask a parent or trusted family member to co-sign your application.
Your chances of getting a loan are better if you have a co-signer with good credit.
But make sure that you and your co-signer both understand the financial responsibilities, since the co-signer will be responsible for any debt that isn’t paid back.
B. Authorized User Strategy
Kevin, a college student, had a low credit score and, because of that, he couldn’t get a protected credit card.
Tip: Kevin asked his parents to put him on their credit card as an approved user.
So, he could build up his credit background without having to apply for a card himself.
Kevin’s credit score will rise over time as long as the main user uses the card well.
But bad things, like paying bills late, can also hurt Kevin’s credit score.
C. Building Credit with a Store Credit Card
Maria, a college senior with little credit history, couldn’t get a student credit card with trip rewards because she didn’t have enough credit.
Tip: Maria chose a shop credit card with a less strict process for getting approved.
Even though these cards usually have higher interest rates and smaller credit limits, using them responsibly can still help you build credit.
Maria used her store card to buy small things and paid off the amount in full every month.
This helped her build her credit history over time. She was able to get a credit card with trip rewards in the end.
D. Credit Builder Loans
Noah, a college student, was turned down for a protected credit card because of money mistakes he had made in the past.
Tip: Noah chose a credit builder loan instead of asking for a credit card.
By making regular payments on the loan, these loans are meant to help people build or fix their credit.
The money that was borrowed is put into a savings account until the loan is paid back in full. At that point, the borrower can get the money.
Noah was able to get a credit card because he always paid his bills on time and never missed a payment.
Keep in mind that everyone’s finances are different, and what works for one person might not work for another.
By looking at different choices and plans, you can find the best one for your needs and start building a good credit history for your future financial plans.
How to Use Your New Credit Card Wisely
When you get a new credit card, it’s important to use it wisely so you can build a good credit history:
A. Pay your bills on time
Every month, pay off your amount on time to avoid late fees and damage to your credit score.
B. Don’t use up too much of your credit.
Aim to use no more than 30% of your credit amount to keep your credit score in good shape.
C. Keep an eye on your credit
Check your credit record and score often to make sure they are correct and there are no mistakes or signs of fraud.
Each of the three major credit companies will give you a free copy of your credit report once a year.
D. Think about the future
Think about your long-term financial goals as you use your new credit card to build your credit history.
This could mean switching to a card with better benefits, asking for a loan, or buying something big.
Giving college students the right credit card is important.
Applying for a credit card as a college student can be a good way to start building up your finances.
By looking at your finances, studying credit card options, comparing benefits and features, and using your card wisely, you can find the best card for your needs and set yourself up for long-term financial success.
Use the information and real-life examples in this guide to make an informed choice and take charge of your financial future.
