While it’s best to use credit cards in moderation to avoid any significant debt, creating a credit history from early on can have great benefits for cardholders in the long run. For students that are headed off to college or just starting to take on their own personal finances, it’s important to have a credit card that not only can cover you in the event of an emergency, but could provide you with other personal benefits. Let’s take a look at some of the options out there for newcomers.
Building Credit
When looking at available credit cards, you want to have access through a company that understands a younger person is accessing a line of credit. That’s why some credit card companies may set up shop on a college campus to demonstrate what their company can offer a student. The intent of these cards is to build credit over time with simplicity and value.
Student credit cards are ideal for working college kids, like the Discover It Student Chrome card, as there’s no required upfront deposit. A credit card issuer will need to see proof of the student having income coming in to qualify.
While debit cards are quite common with access to your personal bank account, enrollment in a student credit card can get students on a path to creating a credit history. This will help create a path to building a high credit score, which can help with long-term purchases like a car or house later on in life. Maintaining a solid credit history also is beneficial in the event you need to access another line of credit later on, or if you need to purchase insurance policies.
Cashback Credit Cards
If you’re looking into credit cards for students in Canada, you’ll want to find the best credit card for your financial situation. You’ll also want to try a card that helps your financial situation. Cashback rewards have become a popular perk among credit card issuers to effectively set up a bank account within your card that can be put towards your long-term savings, or even be used in some cases to pay off your credit card bill when the monthly payment is due.
Cashback credit cards, like the Tangerine Money-Back Mastercard, allow students to receive 2% categories based on categories of the cardholder’s choice. For students, they may want to use that benefit at places they frequently visit like the grocery store or the gas station. You’ll even get 0.5% cashback outside of those categories, so you’ll even see a return if you purchase some ankle jeans with this rewards card. Add on a rewards program through a retailer that offers up those skinny jeans, and you’ll have even more benefits to reap later on.
Other Benefits
When signing up for a new credit card, you’ll want to look into your terms and conditions, especially as a student with a limited income. You’ll want to evaluate your budget and try to look for a credit card that does not come with a high-interest rate or an annual fee for now. Don’t hesitate to look into rewards beyond cashback that could help you score additional benefits or help with other costs.
For example, the Bank of America Travel Rewards card through Visa helps you earn points every time you spend that can then be used for booking flights when it comes time to go home for the holiday break or to go on that Spring break excursion. A student credit card that can accrue miles for travel or for other parts of your trip could be a part of a bonus offer through a credit card company. Be sure to weigh the benefits along with your credit limit to use wisely over time.