Young adults who are shopping around for a new or first credit card will notice many of them advertised as “student” credit cards.

For all intents and purposes, a student credit card is the same thing as a regular credit card. However, it will typically have application requirements that will make it easier for younger people who are just starting out.

In this post, we’ll explore a few of the benefits of using student credit cards. We’ll also explore a few alternatives for those who may want to use other types of cards.

 

The Advantages of Student Credit Cards

As the name implies, student credit cards are targeted toward people who are students (typically ages 18 to 24). The main difference between these types of cards and regular credit cards is the credit score and income requirements.

Since most conventional credit cards require applicants to have a Good or Very Good FICO Score rating (i.e., a minimum of 670 or 740), students will have little success qualifying if they have no established credit history. At the same time, students may also have little or no income which can also impact the lender’s decision. Student credit cards take care of both of these issues by accepting applicants with no credit history and minimal income.

The trade-off is that these cards often have fewer perks compared to regular credit cards. For instance, they may have:

  • Higher interest rates
  • Lower spending limits
  • Little or no cash back rewards

 

However, student credit cards can be a great stepping stone towards getting other cards in the future. Young adults who use their student cards responsibly for a year or two can build a solid credit history and will likely be able to upgrade in the future.

 

Do I Absolutely Need a Student Credit Card?

In short, no. It’s possible to find offers or niche products that aren’t branded as “student” credit cards that may take applicants with a Fair credit rating (minimum FICO Score of 580). However, the incentives will most likely be similar to what student credit cards offer.

 

Alternatives to Student Credit Cards

Outside of finding non-student credit card offers, there are two other paths that young adults can take.

Applying for a Secured Credit Card

A secured credit card is a credit card that requires a small deposit to serve as collateral. This is in the event that you default on your payments, the credit card issuer can recoup what’s owed by taking your deposit. Otherwise, these types of cards work just like a standard credit card.

Co-Signing with an Adult

If you can convince a parent or trusted adult to co-sign for you on a conventional credit card, then you’re more likely to be approved since the application will also consider their FICO Score and income. However, please understand that a co-signer is taking a risk because if you miss a payment, it will affect them negatively. Therefore, make timely payments a top priority.