A TravelSort reader writes: “My son-in-law has never had a credit card, is a student with no debt, no car payments etc. He is attending the Airforce Academy, so he is a student who gets paid to go to school. He wants to get a credit card to start building credit. He is starting his last year of school at the academy and will graduate in May. He has a secure job as he is committed to the Military for 10 years. Which credit card would you recommend for him? He can ride a military plane for $10 just about anywhere in the world so he would probably be more interested in points for hotel rewards.”
First of all, I'm envious of having the option to fly almost anywhere in the world for $10, even if a military plane doesn't offer much in the way of comfort. But back to the question–the best college student credit cards. I'll include some pointers for those new to credit cards, focus on cards that are great for points and perks for hotel stays, and also include some choices that would be useful for earning miles towards flights, to help those who aren't able to get their flights on military planes.
Tips for College Students Applying for a First Credit Card
- Understand how your credit score is calculated: Even many folks who have had credit cards for years aren't fully aware of all the factors that influence their credit score and their relative weights. This info is important, since it can dramatically impact how much you pay for a mortgage, home refinancing, car loan, or other significant major loans. See Understanding How Your Credit Score Works to Maximize Credit Card Rewards
- Always Pay in Full: There is no point in getting a travel rewards card if you carry a credit card balance, since the high interest you pay will more than offset the rewards you earn. To maximize credit card rewards, whether you're a college student or veteran, you should always pay your full balance every month. Autopay can help–just ensure the bank account you link to is always sufficiently funded to pay your balance, and don't forget to still check your statement for accuracy.
- Get a No Annual Fee Credit Card: Ensure that the first or one of the first credit cards is a no annual fee card. The most lucrative travel rewards credit cards charge an annual fee either after the first year or from the outset. But students should make sure that at least one of your early credit cards is a no annual fee card that is never closed, since it's important to build a long credit history to improve your credit score.
- Work Up to a Travel Rewards Card: Travel rewards credit cards are great, but it may not be possible to be approved for one as a first credit card, with no prior credit card history. Try to get approved for a “cash back” card such as the Chase Freedom, since later on, with a Sapphire Preferred, the points can be transferred to travel partners
- May Need a Joint Account First: If it's not possible to get approved on one's own for a first credit card, it can be worth asking a parent with excellent credit to be a joint account holder in order to open a card. As long as both student and parent are responsible and always pay in full every statement, this can be a good way for a student to establish credit. Once the student has established sufficient credit to apply for his/her own credit cards, terminate the joint account.
- No annual fee
- 5% cash back (or 5X points, if you also have the Sapphire Preferred or Ink business card linked to Ultimate Rewards) on rotating categories
- Additional 10% points dividend at the end of the year with the new Chase Exclusives program, available if you also have a Chase checking account
- Low 10,000 points signup bonus
- Need to have the Sapphire Preferred or an Ink card in order to be able to transfer points out to travel partners
- Old Chase Exclusives program is going away for all cardholders, so no more 10 points per transaction bonuses. See Goodbye Old Chase Exclusives for Freedom Card Even for Grandfathered Members
- Foreign transaction fee
- 40,000 points signup bonus
- 2X Ultimate Rewards points on all travel and dining spend
- 7% annual points dividend, so effective earn for travel and dining spend is actually 2.14X points
- No foreign transaction fees
- Ultimate Rewards points transfer instantly to United, Hyatt, British Airways, Southwest and Amtrak, and also transfer to Korean Air, Marriott and Priority Club
- Difficult to get as a first card for a college student
- $95 annual fee after the first year
- Signup bonus: 2 free nights at any Hyatt in the world
- Possible to get $50 statement credit if booking a Hyatt hotel and applying for the card–see Hyatt Visa Still the Best Hotel Credit Card Bonus Offer: 2 Free Nights + $50 Statement Credit
- Hyatt Gold Platinum status with the card
- 1 Free Night annually at any Category 1-4 Hyatt
- Difficult to get as a first card for a college student
- $75 annual fee after the first year
- Hyatt has fewer hotels worldwide than other major hotel chains, such as Hilton, Marriott and Starwood
Understanding How Your Credit Score Works to Maximize Credit Card Rewards
How Does Adding an Authorized User Affect My Credit Score and That of the Authorized User?
Hyatt Visa Still the Best Hotel Credit Card Bonus Offer: 2 Free Nights + $50 Statement Credit
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