Best Student Credit Cards for College | No Credit Options in 2018

Review the best student credit cards to build credit through college.

Mike Brown
Mike Brown
Updated: September 3, 2018

Note from the editor: Our research, news, ratings, and assessments are scrutinized using strict editorial integrity. In full transparency, our company may receive compensation from partners listed on our website. Learn more about how we make money by visiting our advertiser disclosure.

Once you become a college student, you face new and bigger responsibilities than you did before, especially when it comes to managing your money. Busy college students might find it difficult to manage expenses beyond tuition, room and board, and books, particularly when they are not working full-time in college. Student credit cards can help cover expenses by providing access to funds when needed.

Student credit cards also help build a credit history, and having good credit plays an important part in many major life decisions. For example, credit is key when applying for apartments, auto loans, house mortgages, and even student loans.

Since most college students have limited or no credit history, having a credit card that reports to the three major credit bureaus every month creates a track record of on-time payments and responsible use of a credit account. Furthermore, college students can earn rewards that can be redeemed for a variety of items or cash back into their account.

Every transaction can be put to good use in improving one’s credit score – or, unfortunately, damaging it. One of the major culprits behind low credit scores is a lack of education on credit card use.

To put this in perspective, LendEDU conducted a survey that tested college students on their knowledge and use of credit cards. The results are startling and show that students need better financial education. You can view the survey below by clicking here.

Just under 40% of college students who were surveyed had a credit card in their name. When asked about penalty fees and charges associated with a credit card, less than 30% of students were knowledgeable of these types of penalties. Additionally, less than 10% of the respondents knew the interest rate on their cards. Despite this, a solid half of the respondents admitted to being afraid of accumulating credit card debt.

With these statistics in mind, it’s important to know just what a credit card is, how it works, and how it affects one's financial standing.

Read on to review some of the best student credit cards, receive advice on how to get approved, and find answers to the most frequently asked questions about student credit cards.

LendEDU’s 7 Best College Student Credit Cards

Deserve EDU Mastercard for Students

Deserve EDU Mastercard for Students

$0 annual fee 2,500 points for spending $500 in the first 3 months

Deserve EDU Mastercard for Students

  • Earn 1% cash back for all purchases with no limits on the amount you can earn
  • Cardmembers receive a credit for Amazon Prime Student accounts, up to a lifetime total of $49
  • Can receive up to $5,000 credit line without an annual fee
  • There is no security deposit or co-signer needed to qualify
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on Deserve's secure website

Intro APR

N/A

Regular APR

20.24% Variable APR

Annual Fee

$0

Credit Needed

Average/Excellent

Card Highlights

The Deserve EDU Mastercard for Students, issued directly from Mastercard, is designed to help students build and maintain a strong financial track record with credit. This credit card offers 1% back for all purchases, with no limits on the amount you can earn. Cardmembers also receive a credit for Amazon Prime Student, up to a lifetime total of $49.

International students may also qualify for the credit card, even if they do not have a Social Security number.

APR & Fees

Cardmembers can receive up to a $5,000 credit line without an annual fee, and there is no security deposit or co-signer needed to qualify.

Citi ThankYou Preferred Card for College Students

Citi ThankYou Preferred Card for College Students

$0 annual fee 2,500 points for spending $500 in the first 3 months

Citi ThankYou Preferred Card for College Students

  • Earn 2x points on dining out and entertainment and 1x points on all other purchases
  • Earn 2,500 points for spending $500 in the first 3 months of account opening
  • No annual fee
  • 0% Introductory APR for the first 7 months
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on Citi's secure website

Intro APR

0% Intro APR on Purchases for 7 Months

Regular APR

16.24% - 26.24% Variable APR

Annual Fee

$0

Credit Needed

Good

Card Highlights

The Citi ThankYou Preferred Card for College Students can be a good choice for college students and it offers a couple of different benefits. This card allows you to earn points at some of your favorite places.

APR & Fees

You will earn two points for every dollar you spend on entertainment and at restaurants. You will also receive a point for every dollar spent on all other purchases. An additional bonus of 2,500 points will be earned when you spend $500 within the first three months of having the card. There is no annual fee and you will receive an introductory interest rate of 0% for the first seven months.

Discover it Student Cash Back

Discover it Student Cash Back

$0 annual fee CashBack Match on rewards earned in the first 12 months

Discover it Student Cash Back

  • Earn 5x points on rotating categories each quarter and 1x points on all other purchases
  • CashBack Match program that matches all rewards earned in the first 12 months of you using your card
  • No annual fee
  • Receive $20 everytime you get a 3.0 GPA or higher for a school year
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on Discover's secure website

Intro APR

0% Intro APR on Purchases for 6 Months

Regular APR

14.74% - 23.74% Variable APR

Annual Fee

$0

Credit Needed

Average

Card Highlights

The Discover it Student Cash Back can be a good choice for students who have good grades and good credit. First, the Good Grades Reward gives $20 cash back for a 3.0 GPA and higher. In addition, the card provides you with a free FICO credit score. One of the reasons students love this card is because you are allowed to have a co-signer, which helps secure the card and improves your chances of being approved.

APR & Fees

The card offers 5% back on a set of rotating categories each quarter. You will receive 1% back on all other purchases made throughout each quarter. Students benefit from no annual fee and a 0% interest rate for the first six months.

Journey Student Rewards From Capital One

Journey Student Rewards From Capital One

$0 annual fee No bonus rewards

Journey Student Rewards From Capital One

  • Earn 1x points on all purchases and 1.25x points after making five payments on time
  • No annual, balance transfer, or foreign transaction fee
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on Capital One's secure website

Intro APR

N/A

Regular APR

24.98% Variable APR

Annual Fee

$0

Credit Needed

Average

Card Highlights

The Capital One Journey Student Credit Card is ideal for students as it allows you to earn 1% back on all of your purchases. You will also receive additional bonus points every time you pay on time. After you have made five payments on time, you will receive a bump up in rewards and you will begin receiving 1.25% back on your purchases.

Bank of America Travel Rewards

Bank of America Travel Rewards

$0 annual fee 20,000 reward points for spending $1,000 in the first 3 months

Bank of America Travel Rewards

  • Earn 1.5x points on all purchase
  • Earn 20,000 rewards points for spending $1,000 in the first 3 months
  • No annual fee
  • 0% introductory APR for the first 12 months
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on Bank of America's secure website

Intro APR

0% Intro APR on Purchases for 12 Months

Regular APR

16.74% - 24.74% Variable APR

Annual Fee

$0

Credit Needed

Good/Excellent

Card Highlights

If you like to travel, the Bank of America Travel Rewards card might make sense for you. This card is ideal for students who are planning on going overseas or traveling abroad, especially since it charges no foreign transaction fee. The card also has a safety EMV chip located in it to help ensure your identity is always safe.

APR & Fees

You can earn one and a half points for every dollar that you spend on your card. If you spend $1,000 in the first 90 days, you will receive 20,000 rewards points as a perk. The card offers a 0% introductory rate for the first year on all of your purchases. In addition, there is no annual fee attached to the card.

State Farm Bank Student Visa Credit Card

State Farm Bank Student Visa Credit Card

$0 annual fee No bonus rewards

State Farm Bank Student Visa Credit Card

  • Earn 1x points for every $2 spent on all purchases and 3x points spent on insurance premium payments
  • There is no annual fee
  • Students with minimal credit history may qualify for this card with or without the help of a co-signer
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on State Farm's secure website

Intro APR

N/A

Regular APR

12.99% - 19.99% Variable APR

Annual Fee

$0

Credit Needed

Poor/Good

Card Highlights

The State Farm Bank Student Visa Credit Card is designed for new borrowers. Students who have minimal credit history may qualify for the credit card with or without the help of a co-signer, and no deposit is required to open an account. The credit line is based on the cardholder’s credit score and history, or that of their co-signer.

The biggest perk of the credit card is the rewards. For every $2 spent on eligible purchases, cardmembers earn one State Farm Loyalty Rewards point, while State Farm insurance premium payments made with the card earn three loyalty points. Cardmembers have an annual limit of $4,000 for insurance premium payments and earned points. The rewards earned can be redeemed for a variety of options, including gift cards, e-certificates, travel-related purchases, State Farm products, and catalog merchandise.

Wells Fargo Cash Back College Card

Wells Fargo Cash Back College Card

$0 annual fee No bonus rewards

Wells Fargo Cash Back College Card

  • Earn 3% cash back at gas stations, grocery stores, and drugstores for the first 6 months and 1% back on all other purchases
  • There is no annual fee
  • 0% Intro APR on Purchases for the first 6 months
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on Wells Fargo's secure website

Intro APR

0% Intro APR on Purchases for 6 Months

Regular APR

12.90% - 22.90% Variable APR

Annual Fee

$0

Credit Needed

Good

Card Highlights

The Wells Fargo Cash Back College Credit Card is designed for college students who want to build their credit history while going to school – plus earn rewards on purchases at the same time. Cardmembers earn 3% in back on purchases at gas stations, grocery stores, and drug stores for the first six months, as well as 1% back on all other purchases. The 1% back continues after the first six months.

The minimum rewards redemption amount is $25. This student credit card does not have stringent credit requirements, making it a smart choice for borrowers who have little to no credit history.

APR & Fees

New cardmembers also have an introductory 0% interest rate for the first six months.

Best Student Credit Cards Comparison

Card Rewards Annual Fee
Deserve EDU Mastercard for Students 1% cash back on all purchases $0
Citi ThankYou Preferred Card for College Students 2x points at restaurants and entertainment and 1x points on all other purchases $0
Discover it Student Cash Back 5x points on rotating categories each quarter and 1x points on all other purchases $0
Journey Student Rewards From Capital One 1x points on all purchases and 1.25x points on all purchases if you make five payments on time $0
Bank of America Travel Rewards 1.5x points on all purchases $0
State Farm Bank Student Visa Credit Card 1x points for every $2 spent on all purchases and 3x points on insurance premium payments $0
Wells Fargo Cash Back College Card 3% cash back at gas stations, grocery stores, and drugstores for the first 6 months and 1% cash back on all other purchases during and after that timeframe $0

What Students Should Know About Credit Cards

Let’s look at what a credit card actually is as opposed to a debit card.

When someone uses a debit card in their name, they are spending money from their bank account. Basically, you are spending your money up front; it is the same exact thing as spending cash but it’s an electronic transfer of your own money.

When making a purchase with a credit card, you are not spending your money up front; in fact, you are spending the card issuer’s money. Instead of subtracting money from your bank account with a debit card, you are adding debt to an account in your name with the credit card issuer.

You are expected to pay this money back – at least, in most cases, in minimum monthly payments that are based on a percentage of your balance. Ideally, though, you would pay your balance in full each month to avoid accruing interest and getting into debt.

Who Issues Credit Cards?

There are two major types of institutions that offer credit cards: banks and credit unions. Banks can issue mortgages and other types of loans, but can also offer credit cards. Meanwhile, a credit union is a collection of companies that pool resources into a nonprofit union. Credit union credit cards tend to have lower interest rates than most bank credit cards.

While these two issuers account for most credit cards, there is another type of issuer: a credit card network. These networks handle the credit card transaction processes, but some of them issue their own cards – for example, Capital One’s Journey Student Credit Card or the Discover it student credit cards.

These card issuers provide payment for transactions, and they are the companies that consumers pay back with each credit card statement.

What Are Interest Rates?

There are tons of credit cards out there with varying interest rates. In general, it’s best to get a credit card with a low interest rate. These credit card interest rates vary depending on creditworthiness and the market. Generally speaking, better creditworthiness tends to get you lower interest rates.

There are several common types of these rates: general purchase, cash advance, and balance transfer. Although if you pay your balance in full each month, you typically should not have to worry about the interest rate.

Starting with the most common and important rate, general purchase interest rates is a percentage that is applied to a general transaction amount made with a credit card. Here is an example. You buy $100 of supplies during a billing cycle, and your general interest rate is 15%. The interest owed on that billing cycle would be $15 in addition to the $100 that was spent; however, this interest is not applied if the balance on the loan is paid in full during the billing cycle. This is the most important aspect of general purchase interest rates.

Balance transfer interest rates are assessed whenever transferring debt between credit accounts, so it is essentially a rate-based fee for making that transfer between accounts (balance transfers between accounts are sometimes done to save money on general interest payments).

A cash advance interest rate is assessed when getting a cash advance on a credit card (a cash advance is done by simply withdrawing cash from an ATM with a credit card). These interest rate charges are taken as percentages of either the cash advance or balance transfer amount. You can avoid these charges if you don’t do a balance transfer or cash advance.

What is a Credit Limit?

A credit limit is pretty simple to understand; it is the maximum amount of money you can borrow from your credit card issuer. With a credit card limit of $1,000, you are only able to spend up to $1,000 on that card. These limits are set in place to keep consumers from borrowing way too much; those with good credit history get better (higher) credit limits. Make sure you know the difference between your total credit limit vs. your available credit. In general, most starter credit cards for first time applicants will have very low limits.

Are These Fees Associated With Credit Cards?

There are plenty of general fees in addition to interest rates that are assessed for certain practices. Annual fees are charged each year for simply having a credit card, but there are no annual fee credit cards. Many cards have over-limit fees – a fee that is assessed when spending over the credit limit.

In addition to balance transfer and cash advance interest rates, some credit cards have additional fees for making these transactions. Some cards also have foreign transaction fees; a percentage of a transaction made out of the country. Here is a recap: several common fees are annual fees, over-limit (or overdraft) fees, cash advance and balance transfer fees, and foreign transaction fees.

Frequently Asked Questions About Student Credit Cards

How to Get Approved for a Student Credit Card

Most students out of high school won’t have a credit history for card issuers to research. Luckily, applying for a credit card today is quick and easy since most card providers have an online application that offers fast approval. Normally, credit card issuers delve into credit history which involves previous cards owned and full records on debt payment history, but those without a credit history need to rely on different information.

In general, these applications ask for several pieces of information. Basic questions ask for name, address, phone number, email address, and social security number. One of the most important pieces of information is job information (especially for those without a credit history).

The applications often inquire about place of work, length of employment, and salary. Card issuers need this information to determine whether an applicant will be able to make debt payments, so it is an extremely important measure that issuers require. This is often the determining factor of credit card approval as well as credit limit definition.

There are a couple age limitations when it comes to applying for a student credit card. Cards are only issued to those who are 18 or over. Those who are between the age of 18 and 21 are required to provide additional documentation that verifies their income and ability to repay.

After the approval process is completed, you are either approved or not approved. If you are not approved, information is provided on why you were not given a credit card. If you are approved, then you will be assigned a credit limit; the credit card will be sent in the mail within two weeks.

One important aspect of the student credit card approval process is the type of card being applied for. There are different standards on credit cards, so some are harder to get approved for while others are easier.

There are two broad categories of credit cards to be familiar with: secured and unsecured credit cards.

A secured credit card is meant for people with either bad or no credit history. It comes with harsh penalties and interest rates for late payments as well as limited benefits, and credit limits often start out very low compared to unsecured cards. Additionally, secured credit cards require a deposit for approval.

For a new credit card applicant, this type of card may be the only option. But it helps establish a credit history and, with proper use, good credit, which can lead to getting some of the best credit cards in the future.

An unsecured credit card typically does not have the same limitations as a secured card. These cards come with reward and benefit packages that offer some return on making purchases; additionally, those with better credit are approved for higher credit limits.

The chances of getting approved for an unsecured credit card as a new applicant are better if you show proof of a sizeable income. What is a sizeable income for a credit card? That’s a truly relative question since different cards require different income ranges.

One piece of advice for students is to apply for a student credit card because it takes into account the lack of credit history and financial situations that are typical for a college student. Be sure to review some of the best student credit cards listed above before applying.

How to Properly Use Student Credit Cards

Student credit cards require discretion when being used, and there are several important considerations to make when using them.

First and foremost, cardholders must make their payments on time – that is, by the due date. But you can avoid unnecessary interest and penalty charges by paying off the credit card balance before the end of a billing cycle. Adhering to this principle can eliminate the big costs that come with a credit card.

With that being said, another consideration factors directly into the previous points: how much you spend with the credit card. It is obviously much harder to make a payment on time after a month of excessive spending with a credit card. Using the credit card for only necessary purchase reduces the amount of potential fees and interest payments from overspending.

Many of the student credit cards on the market come with resources that make tracking expenses simple, quick, and easy. There are resources available on computers that provide balance amounts and due dates; additionally, there are mobile apps that can easily access transaction history and card balances.

Another key aspect of student credit cards that can increase their value is the rewards package that is offered. Fully utilizing these benefits can provide a cardholder with cash back redemptions or some sort of financial return. Capitalizing on this is a great way to save money or earn a free gift like covered airfare. Be sure to research how the benefits package works.

Some of the best cash back credit cards offer more for niche items; for instance, purchasing groceries for some cards earns 5% back compared to 1% back on other types of purchases. Understanding which purchases earn more is key to extracting the most out of a credit card.

Managing a credit card is easy; it just requires diligence. First, make your payments on time. Second, use the credit card for essentials only and eliminate extraneous expenses. Finally, cardholders can reduce their overall expenses by cashing in on any rewards.

Dangers of Misusing a Credit Card

One of the big risks of using a credit card is the potential to damage your credit. This is a huge problem for a major reason; it can block the cardholder from reaching important life milestones. One of the prime examples is homeownership. In most cases, homeowners need to apply for a mortgage in order to finance the move into a house. This move requires good credit history because lenders are not going to trust a borrower with a bad history of making debt payments.

One thing to remember is that everything that happens with a credit account is recorded. Credit issuers typically report your on-time payments and late payments alike to the credit reporting agencies.

Practices such as habitual late payments directly affect credit score negatively. Another factor that drops credit scores is high credit utilization. Ideally, your balance should be no more than 30% of your total credit limit. For example, if you have a $3,000 credit limit, it’s best to carry a balance of $900 or less on your card.

Using more than this might also raise your debt-to-income ratio. This is something lenders look at to determine a borrower's creditworthiness, and high ratios indicate lack of income compared to accruing debt. It essentially indicates poor potential to pay off debt.

Mishandling a credit card can lead to negative, or derogatory, marks on a credit report. These marks can drop a credit score significantly, so it is best to avoid these when possible. The next few paragraphs provide details on several negative credit marks.

Bankruptcy

This is the most damaging mark that can go on a credit report. It is one of the last resorts when seeking relief from a bad debt situation. Bankruptcy involves entering a legal action that requests release from debt obligations. The reasoning? The funds are literally nonexistent, and there is no way debt can be repaid. One way to go bankrupt is to overspend with a credit card and build up too much debt.

Foreclosure

This has to do with defaulting on a mortgage payment, which is bad news for one’s credit score. If a borrower falls behind on mortgage payments to the point of foreclosure, the mortgage provider seizes the house as collateral; the house is then sold to make back the loan amount.

Collections

These occur when a cardholder cannot make debt payments and the account is sold to a third-party debt collector. They are noted in a credit report, so it is best to make debt payments on time in order to avoid changes to an account.

Tax Lien

This is recorded after someone fails to pay back money owed in taxes. This is serious and unique because a tax lien can indefinitely remain on a credit report.

Civil Judgement

A lawsuit that requires payment of damages goes on a credit report as a negative mark.

Are These Negative Marks Permanent?

Not exactly. These derogatory marks can last a long time, so they have the potential to hinder someone greatly. The best course of action is to adhere to good credit card practice; eventually, these marks lose their significance over time. For example, a late payment will stay on your credit report for seven years, but its negative impact diminishes over time – especially if you make on-time payments every time afterward.

More About Choosing the Best Credit Card for Students

There are many credit cards for college students. You will find that the rewards are good and you can earn more cash back when you use your card within the first few months of using it.

Before you choose between the best student credit cards, think about whether or not you want cash rewards or travel rewards. In addition, decide if a credit card is the right move for you. You should try to avoid placing all of your purchases on it because you do not want to drown in debt while in school or soon after school.

How Do You Upgrade Your Student Credit Card?

A student credit card is helpful to college students when they are attending school, but after graduation, it may be beneficial to upgrade to a non-student credit card. This is because the credit limit on student credit cards may be limited, and rewards on other credit cards offer a greater return for similar spending habits. You can efficiently upgrade to a new credit card after college by requesting a different credit card from the same bank or issuer behind your student credit card.

Some credit card issuers require a new application to qualify for different rewards credit cards, while others may simply accept the request for a change. In either case, it is important for students to evaluate the cost of the new card compared to the student credit card, as well as the rewards offered, the credit limit, and any restrictions on card use before applying for or requesting a new card.

Can You Add an Authorized User to a student Credit Card?

An authorized user is a secondary credit-card holder who has access to the same credit line through the primary borrower’s account with their own credit card. Having an authorized user often helps with earning additional rewards over time, but most student credit cards do not give cardmembers the opportunity to add an authorized user at first. This is because a student credit cards are designed for borrowers who have little to no credit history.

Adding an authorized user presents more risk to the card issuers, so it may not be an option within the first several months or years of having the credit card account. However, some student credit card issuers give the primary cardmember an option to add an authorized user if they so choose. The credit card agreement provides information about authorized users, if and when they are allowed, and the process for adding one. You can view our best credit cards for authorized users list if interested, but remember, these cards will require a good to excellent credit score to be approved.

Is a Cash Advance Available On a Student Credit Card?

A cash advance is a way to access the credit line of a student credit card without making a purchase. It works similar to an ATM cash withdrawal, except that cash advances come with a fee as well as a higher interest rate than purchase transactions. While cash advances are available with many credit cards, student credit cards are less likely to offer them.

If they are available, the credit card agreement will lay out the terms of cash advances, how much is available to the cardmember, and the percentage fee for the transaction, along with the interest rate charged on cash advance balances. Some credit card issuers may only make cash advances available for a small portion of the available credit line, helping to limit their risk.

Students should only use a cash advance from a credit card if it is available as a last resort, as it is an expensive option in most cases.

Can You Get Approved for a Student Credit Card If You Have Fair or Bad Credit?

Most student credit cards are designed to meet the credit needs of borrowers with little to no credit history. If a student has not had a credit card in the past, or any other type of credit account reported to the credit bureaus, their credit score and history will be minimal. Credit card issuers understand that it takes time to build a strong credit profile, and so they require less stringent credit history qualifications for student credit cards than other cards.

Additionally, students who have had credit accounts in the past but have failed to manage those accounts wisely may be able to qualify for a new student credit card from certain issuers. However, missed payments, accounts in collections, or other credit missteps may make getting any new credit card a challenge.

Can You Apply for Multiple Student Credit Cards at Once?

Students can apply for more than one student credit card at a time, but it is not likely that more than one will be approved at the same time. This is because each time a credit card application is submitted, it creates a hard inquiry on the student’s credit report. Hard inquiries are necessary when opening a new account, as this is the way a card issuer checks a student’s financial track record.

However, when too many hard inquiries appear on a credit report over a short period of time, new creditors view this negatively and may decline a new credit application. Make sure to consider how long you should wait to apply for another credit card before hurting your credit score. Students should take their time to determine the student credit card that best fits their needs based on cost, rewards, and credit qualifications before applying to a credit card instead of applying to several at once.

What Should You Do If You've Been Denied for a Student Credit Card?

While most student credit cards have less strict credit qualification requirements than other credit cards, you can still get denied. This could be the case for students who have had a credit card in the past that was not managed well, or an account that was delinquent and resulted in a transfer to a collections agency. These factors have a negative impact on one’s credit score and credit history, so they can make it difficult to get an approval.

If a student credit card issuer has denied an application, it is best to review credit history to see what can be done to improve the odds of approval next time. Alternatively, students may have the option to add a co-signer to a credit card application or to submit a deposit to secure the credit line. These options vary from issuer to issuer, but they may be a viable solution for getting approved for a new student credit card.

Should You Consider Student Credit Cards From Credit Unions or Community Banks?

Student credit cards are available from a variety of lenders and issuers, including community banks and credit unions. These financial institutions are often more locally focused, meaning they take the time to get to know their customers or members and their financial needs.

The benefit of getting a student credit card from a community bank or credit union is the ability to build a relationship with that specific financial institution. You can have access to their other financial products and services simply for being a cardmember.

In some cases, having a credit card with a community bank or credit union may come with fewer rewards than other credit card issuers, but the interest rate charged on the card may be lower than on other student credit cards.

Should You Close Your Student Credit Card After College?

Student credit cards are beneficial while attending school, but they may not serve as much benefit upon graduation. Students may want to request a credit card that provides more tailored rewards, lower interest rates, or other features not available with simple student cards. While this is possible through a variety of credit card issuers, it is not always a good idea to close the student credit card in the process.

A student credit card is often the first significant credit account reported to the credit bureaus, and its longevity helps create and maintain a long credit history. So, try to keep the student credit card account open, even when you get a new card.

College Student Credit Card Survey

We conducted a study and found that current college students struggle to understand the basics of credit scores and reporting. Our team traveled to three different college campuses to survey even more college students. Over that course of surveying, we asked current college students a series of questions about credit cards.

Credit cards are a powerful tool when used correctly. Student credit cards can help young adults build credit, earn rewards, and learn financial responsibility. However, when used incorrectly credit cards can be as crushing as high-interest student loan debt. The New York Federal Reserve reported that credit card balances were $815 billion by May 2018.

In our survey, we were able to collect responses from 468 undergraduate and graduate students at three different four-year institutions (two public, one private). We surveyed at two colleges in the San Francisco Bay Area, and at one institution on the East Coast.

Our goal was to find out what current college students do and do not know about credit cards. Here are the results of our survey:

1. Do you have a credit card in your own name?

38.46% of students surveyed currently had a credit card in their own name.

Questions 2 through 9 were asked only to individuals with credit cards.

2. Do you know the current interest rate on your credit card?

9.44% of students surveyed reported that they knew the current interest rates on their credit cards.

3. Do you know the late payment charges on your credit card?

20.56% of the students surveyed reported knowing the late payment charges on their credit cards.

4. Do you know your current credit card balance limit?

58.89% of the students surveyed reported knowing the balance limits on their credit cards.

5. Do you know the over-limit fee?

28.89% of the students surveyed reported knowing the over-limit fees charged on their credit cards.

6. Do you currently have a balance on your credit card?

67.78% of the students surveyed reported having a credit card balance.

7. Do you know, approximately (within $100), what your credit card balance amount is?

93.33% of the students surveyed reported that they knew their current credit card balance within $100.

8. Does paying your credit card on time impact your credit score?

71.11% of the students surveyed believed that paying their credit card bill on time would impact their credit scores.

9. Do you have more than one credit card account?

23.33% of the students surveyed reported that they currently have more than one credit card account.

Questions 10 through 12 were asked only to individuals without credit cards.

10. Have you considered opening up a credit card account?

43.75% of the students surveyed reported that they have considered opening up credit card accounts.

11. Are credit cards an important tool for building consumer credit?

71.53% of the students surveyed believed that credit cards are an important tool for building consumer credit.

12. Would you consider yourself afraid of the possibility of accumulating credit card debt?

46.53% of the students surveyed considered themselves afraid of the possibility of accumulating credit card debt.

Survey Breakdown

We were surprised to find that such a low percentage (38.46%) of current college students had credit cards. Memories of the financial crisis and rising student loan balances may be deterring young Americans from getting credit cards. Additionally, in 2009, the Credit Card Accountability Responsibility and Disclosure Act, aka the Credit CARD Act, clamped down on marketing at colleges and universities and put stronger requirements in place for applicants under 21 to qualify.

Also surprisingly, only a fraction (9.44%) of current college students with credit cards knew their current interest rates. In another survey, we found that only 7.9% of current college students with student loan debt knew their interest rates. Yet, two-thirds of the students with credit cards currently reported carrying a balance.

On a positive note, a high proportion of respondents did believe credit cards were important when building credit. However, those two questions (No. 8 & No. 11) were asked in a positive bias.

Though we may be starting to sound like a broken record here at LendEDU, our nation has a serious issue. Personal finance education is crucial for young adults, especially at the high school level.

Special thanks to our surveying team for walking over 100,000 steps to collect these responses.