Part of being a responsible adult is managing your money wisely, including using credit cards. Credit cards can be a great tool to help you build a good credit score and establish financial independence. In particular, student credit cards usually come with lower credit limits than regular credit cards. However, you'll still likely receive special perks like cash back rewards or travel points.
But with many choices, it can be hard to know where to start. This guide will cover everything you need to know about student credit cards in Canada. We'll cover the different types of cards available, how to choose the best one for you and answer some frequently asked questions.
Student credit cards come in various types and styles, each with unique benefits. Typically, you can select a card that's great at one category or good at two to three. For example, you may prefer a card with no annual fee and some cashback, while a friend may want a card that earns them travel benefits. This section will help you understand the different types of student credit cards to find the best type for you.
These are great cards for students who want the convenience of a credit card without having to pay an annual fee. These are great for your first credit card because you'll want to keep it open to build your credit score. Closing your first credit card will impact your score, so you'll want a card that won't continuously charge you.
If you plan on carrying a balance or are new to using credit, low interest cards can help save you money on interest charges. Many of these cards also offer a promotional balance transfer which allows you to temporarily lower your interest rate and pay off your debt faster.
Most students begin with a no-annual fee cashback card. This is because the redemption process is simple, and you can use your cash back rewards anytime. When looking for a cashback card, find one with the highest return rates on your top spending categories.
If you often travel or plan to in the future, a rewards card could be a great option. These cards allow students to earn points or miles on their everyday spending, which can be redeemed for free travel and accommodation. However, these cards tend to have a higher interest rate and income requirements. When using a travel credit card, it's best to pay your monthly balance fully. However, if your balance begins to climb, you can switch the debt to a low-interest balance transfer card while you pay it off.
Your student credit card will usually turn into a regular credit card once you graduate, with the same interest rate and terms. However, some cards may offer a lower interest rate or other perks for a while after graduation. It's important to check the terms and conditions of your card to see what will happen when you graduate.
Comparing cards can be overwhelming. Student cards tend to have a low annual fee and no income requirements. However, some cards have many other benefits mentioned below. This section will help provide you with additional criteria to compare cards.
Many student cards have no annual fee, which is excellent for students trying to minimize expenses. Student cards generally have yearly fees ranging from $0 to $39. Some of the top student credit cards without an annual fee include:
Some credit card companies require that applicants have a certain amount of income to qualify for the card. For student cards, this ranges from $0 to a minimum household income of $15,000. While this is not always the case, it's something to be aware of when comparing cards. All credit cards mentioned above have no income requirements except for the Scotiabank L’earn Visa and Tangerine Money-Back Credit Card.
Graduate students often have a higher income and more expenses. As such, they may want to consider a credit card with a larger credit limit and rewards program. To cater to graduate students, some banks such as Scotiabank offer graduate packages that waive annual card fees. However, some additional great cards for graduate students that haven’t been mentioned in this article include:
The interest rate is the price you pay for borrowing money. You will only have to pay interest if you do not pay off your statement balance monthly. For student cards, the usual interest rate is 19.99%. The following student cards have purchase rates below this average:
Some student cards come with complimentary insurance benefits, which can be helpful if you are travelling or renting a car. For the insurance to activate, you must purchase the service or product with the relevant credit card. For example, to take advantage of trip cancellation insurance, you must book the flight using a card offering the insurance to take advantage of trip cancellation coverage. The most common types of insurance included with student credit cards include:
Most student credit cards offer purchase protection and extended warranty insurance. The following student cards offer more coverage:
If you carry a balance on another credit card, you may want to consider transferring that balance to a student credit card with a lower interest rate. This can bring your interest APR from 19.99% to 0%-2.99%. These are promotional rates which are only valid for 6 to 12 months.
However, the temporarily low rate will let you save money and pay off your debt faster. Note that balance transfer fees range from 1% to 3% of the amount being transferred. The following student cards have excellent balance transfer offers:
Student cards may include additional perks, such as cashback, rewards points, or discounts. These can be helpful if you want to save money or earn rewards for your spending. These are explained thoroughly in the types of student credit cards section.
International students often have difficulty getting approved for a credit card in Canada. This is because they don't have a Canadian credit history and may not have a job in Canada. Additionally, international students who are unsure if they will remain in Canada should opt for a cashback credit card. This is because travel points can take a while to add up. Cashback rewards can be redeemed more frequently. As such, international students should choose a cashback credit card that doesn't require a Canadian credit history. This is unless they are sure they want a travel credit card.
Yes, international students can get credit cards in Canada. However, they may need to provide additional documentation, such as a study permit or student ID card. Additionally, some cards may have income requirements or minimum credit limits that may be difficult for international students to meet.
Ultimately, the best student card for you depends on the benefits you want. If you are earning considerable amounts and travel frequently, then a travel credit card may provide you with a higher return on investment. However, students usually benefit the most from a no-fee cash back credit card. This gives them the most flexibility and allows them to build their credit score.
Can you get a student credit card with no income?
Yes, many student credit cards have no income requirements.
What is the minimum age to get a student credit card?
You can apply for your own credit card when you are the age of majority in your province. This is typically 18 years old. However, your parents can add you as an authorized user to their card before you turn 18. This will help you begin building a credit score at a younger age.
Can you pay off student loans with a credit card?
Yes, but it's not recommended. You should only use a credit card to pay off student loans if you can pay off the balance within the interest-free period. Credit cards have high-interest rates, which will make your debt more expensive.
How many credit cards should a student have?
It's best to have one to two credit cards as a student. Having multiple cards can help you build your credit score, but opening too many can negatively impact your score in the short term.
What to put for annual income for student credit cards?
If you don't have an annual income, you can put $0. It is unlawful to lie on your credit card application, and you may receive legal penalties.
Can I get a student credit card with bad credit?
There are a few student credit cards available for people with bad credit. However, these cards typically have high-interest rates and fees. We recommend rebuilding your credit with a secured credit card before applying for a regular student credit card.
How do student credit cards work?
Student credit cards work just like any other credit card. You'll use the card to make purchases, and if you carry a balance, you'll accrue interest on those purchases. It's important to remember that, as with any other type of credit, you should only use your student credit card wisely.