As a student, each time you approach your mom or dad to get you a credit card, you probably hear them say: “Why do you need a credit card? Don’t we give you money whenever you need it?”. That may be well and good, but having a student credit card in your own name is about more than just about tapping into funds when you need them.
This is the age when you learn invaluable lessons for your future life – and managing credit card debt is one of the most important of those lessons. More importantly though, owning a credit card now helps you build your credit history early on in life – something that will stand you in good stead when it’s time to buy that first car or take out your first mortgage.
What Makes the Best Student Credit Card?
So, what is it that would make a student credit card worth considering? Ideally, here are some features that you should look for in a student credit card:
- A great introductory offer that gives you cash back or bonus points for signing up
- Cash-back or points on either ALL or the broadest range of purchases
- Opportunity to rack up Air Miles on a significant part of your credit card spending
- Option to participate in discounts and schemes offered through leading Canadian loyalty card programs, such as Student Price Card Ltd (SPC)
- Cash advances
- Competitive interest rates
- And of course – NO annual fee!
While it may be hard to find a single card that checks all the boxes, it’s certainly not impossible to find one that meets many of the above criterion. Be warned though that you may need to make some compromises along the way when selecting the card that’s ideal for you. For instance, you may find one that gives you 5 Air Miles Rewards Miles for every $100 in credit card purchases (as opposed to 3 Rewards Miles offered by a competing card) – but it may only offer you 0.5% cashback (as compared to 1% from “the other guy”).
The Honour Roll
Here are three Visa and Master candidates for your list, offered by leading Canadian financial institutions, that may be worth taking a closer look at:
Significant features include:
- No annual fee
- Great initial-period welcome offer (currently 4% for first 4 months)
- Cash back on ALL purchases made using the card (currently 1%)
- Eligible for SPC discounts
- Cash advances (currently up to 22.99%)
Highlights of this product include:
- NO annual income requirement for students
- NO annual fee for the primary card; and $0 annual fee for up to 3 additional cards
- Up to 2,500 bonus points as you go through the sign-up and registration process
- 1 point for each dollar spent on gas, groceries or at the drugstore
- Booking a trip through the CIBC Rewards Centre gets you 1 point for each dollar spent there
- Added bonus: A package of auto rental collision and common carrier accident insurance comes with this product
This student card offers:
- NO annual fee
- Up to 1% in moneyback rewards on your purchases
- Up to 20% discount on car rentals from AVIS
- Convenient 21-day interest-free grace period for eligible card holders
- Supports some of the latest payment technologies, including Apple Pay, Android Pay, Mobile Wallet and Visa payWave
The list above isn’t presented in any order of preference, nor is it an exhaustive list of every available student credit card available. For instance, while the BMO SPC® CashBack BMO SPC® CashBack® Mastercard® is listed here, the bank also offers a parallel Air Miles-based product, the BMO SPC® Air Miles® Mastercard® that might interest you as well.
Do Your Own Homework
Now that you know some of the choices available to you, it’s time for you to do some homework before selecting the student credit card that’s right for you. Remember:
- Interest rates are important – but don’t make them your ONLY focus
- Don’t get swayed by features that you are not likely to use in the near future – for instance car insurance
- Make sure you compare apples-to-apples – for example matching Cashback cards against Air Miles Rewards cards isn’t a head-to-head comparison
One of the easiest ways in to check out the online rewards and savings calculators that most issuers provide, to see how much you can REALLY save by signing up with them.
BMO Rewards Calculator shows us that spending $250 using your BMO SPC® CashBack® Mastercard® could get you a minimum of $100 in rewards, PLUS 1% cash back on all purchases made using the card. If this is the first time that you are signing-up for a student credit card, it might be worth while speaking to your parent or a teacher to get some advice before applying for one.For instance, using the
Making Student Credit Cards Work
You have probably heard many “horror stories” about friends or colleagues piling up credit card bills, and being unable to dig themselves out of a vicious cycle of debt. While many of those stories are true, the good news is that you can make student credit cards work for you if you manage them properly. Every type of credit card has its own pros and cons and you should be treating them properly and not use it as a normal credit card, the same way that you can’t use the business credit cards as personal credit cards.