Getting Started With Credit
It is challenging for any student under 21 who doesn’t have a full-time job to qualify for a credit card without a parent’s co-signature. If you think your kids have shown they can handle credit responsibly, you might consider co-signing for a secured credit card with a low limit. If you put, say, $500 into this type of account, then they will only be able to charge up to $500. Because they will still need to make monthly payments, it’s an ideal opportunity to help them build positive financial behaviors.
On the other hand, co-signing for an unsecured credit card while your child is in college has the potential to put your own credit rating on the line. “You have all of the risk, but none of the control because they’re over 18,” Pearl says. She recommends waiting until your child has built up a good enough credit history with a savings account, debit card and perhaps a secured credit card to qualify on his or her own.
You may also consider adding a child as an authorized user on one of your current credit cards; if you do, review the statement each month and discuss how and when it’s the right time to use the card for purchases.
With these steps, you’ll start a long-term conversation that informs your children’s behavior and sets them on the path to building their own bright financial futures.;
Best Credit Cards For Students
Many credit card issuers offer a student credit card version to their popular entry-level cards. This is an excellent way for teens 18 and older to qualify for cards with even better rewards programs. Functioning the same way as traditional credit cards do, student credit cards usually have lower credit limits but a higher approval rate for those with no credit history. Keep in mind that student credit cards are restricted towards college students in two- or four-year colleges and not middle or high school students.
Most student credit cards also offer rewards geared toward students and their spending habits. Therefore, college students should use their credit cards on essential purchases such as textbooks and dorm essentials. Below we’ve gathered some of our top picks for student cards based on the rewards rate and card benefits:
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If you’re at least 18 years old and are a college student, this is an ideal time to apply as there are plenty of options to choose from. Whether you want to earn travel rewards or cash back, these credit cards can also help you establish your credit from the ground up.
Discover It Secured Credit Card
Our pick for: Secured card rewards and upgrading
Like other secured credit cards for people building or rebuilding credit,;the Discover it® Secured Credit Card requires a cash security deposit. Unlike most others,;it offers rewards. But what really makes it stand out from the competition is its upgrade possibilities. The issuer has a process in place for automatically reviewing accounts for possible transition to an unsecured card. Read our review.;
» STUDENT CREDIT CARDS;Student credit cards are ideal for working college students. Unlike secured cards, they don’t require upfront deposits. If you’re under 21, however, you have to have an independent income to qualify.
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Should My Teenager Get A Credit Card
You might think your child is far too young to use a credit card. But youll find three big reasons why it could be a good idea.
1. It can teach your teen how to use a credit card responsibly for the future.
After adding your teen as an authorized user, you have control over their account and can see how they use their card. With insight into their spending, you can more effectively teach them solid financial habits. Its better for them to learn from you now than figure everything out on their own later.
2. It can help your teen build credit early.
Most people start with a brand-new credit history when theyre ready to get a credit card. This usually means theyre limited to student cards and secured cards, both of which typically come with limited features. You can help your teen build an impressive credit history before they reach adulthood. Just add them as an authorized user on your account and consistently make payments on time. When they turn 18, their credit may be strong enough to expand their card options considerably.
3. Its a convenience for parents and kids.
Sometimes you could forget to give your kid cash for meals at school, transportation or supplies. Getting your kid a credit card can help you avoid unpleasant situations and avoid cash theft.
Be careful about giving your child a credit card
Discover It Secured Credit Card Credit Card
The Discover it® Secured Credit Card Credit Card offers one of the best rewards programs of secured cards out there. You’ll earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter, 1% unlimited cash back on all other purchases – automatically. Even better, for new cardmembers Discover will double the cash back you’ve earned at the end of the first cardmember year. Your security deposit will determine your credit line, offering flexibility for how much you can afford based on your teen’s spending habits.
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Teaching Your Teen To Use A Debit Card
Once youve decided which debit card option to go with for your teen, involve them in the process of signing up for the account. If the company offering the debit card has physical locations, you can open the account together in-person. Alternatively, you can open most accounts online, and in some cases, that will be the only avenue. Still, involving your child in the application process can be part of their financial and banking education.
Once they receive the debit card, take some time to explain how it works, including that they can only spend as much as they have in the account, or that doesnt exceed any limits you or the card imposes. Make sure they download the cards mobile app onto their phone or device and teach them how to check their balance and access different features.
Another good idea is to set up a monthly review with them. With just 10 or 15 minutes a month, you can help them establish a healthy habit of doing a monthly review of their spending, making sure they recognize all of the transactions, and potentially setting up budget limits for next month.
Lastly, make sure they understand any fees they could be charged. Learning how to avoid or minimize fees is an important part of financial literacy, so helping them understand fee rules ahead of time, or explaining what happened afterwards, will go a long way in turning them into responsible banking consumers.
Blue Cash Everyday Card From American Express
Our pick for: No-deposit starter card foreign credit histories
The Blue Cash Everyday® Card from American Express pays elevated rewards at U.S. supermarkets, U.S. gas stations and select U.S. department stores. The rewards aren’t as rich as on the Blue Cash Preferred® Card from American Express, but this card doesn’t charge an annual fee. New cardholders get a decent bonus offer and an introductory 0% APR period. If you’re buying groceries regularly but not necessarily all the time,;it’s worth a look. Read our review.
» BUSINESS CREDIT CARD;;
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Best Student Credit Cards Faq
What is the best student credit card in Canada?
If you earn up to $12,000 in personal income per year, the Tangerine Money-Back Mastercard is our number one choice for a student credit card. Following that, we recommend the BMO CashBack Mastercard.
What is the easiest student credit card to get?
The Tangerine Money-Back Credit Card, Scotiabank SCENE Visa Card, and BMO CashBack Mastercard all have bare minimum eligibility requirements. All three cards also do not have an annual fee.
Can I build credit with a student credit card?
Yes, a student credit card works like a regular credit card, and your transactions are reported to the credit bureaus. If you pay your balances on time, it helps to raise your credit score over time.
Best Credit Offers this month
Best Credit Cards For Teens
- Be automatically considered for a higher credit line in as little as 6 months
- Fraud coverage if your card is lost or stolen
- Use online banking to access your account, even from your smartphone, with our mobile app
- Check out quickly and securely with a contactless card, without touching a terminal or handing your card to a cashier. Just hover your card over a contactless reader, wait for the confirmation, and you’re all set
- Pay by check, online or at a local branch, all with no fee – and pick the monthly due date that works best for you
- Get access to your account 24 hours a day, 7 days a week
- Help build your credit through responsible use of a card like this
- Up to 1.5% cash back on eligible purchases after making 12 on-time monthly payments
- 1% cash back on eligible purchases right away
- 2% – 10% cash back at select merchants
- No fees whatsoever. No late fee, foreign transaction fee, annual fee, or any-other-kind-of-fee, fee.
- $500-$10,000 credit limits
- Build credit alongside tens of thousands of Petal Card members
- Cash flow technology may help applicants without credit history get approved
- Petal’s mobile app makes it easy to manage your money, track your spending, and automate payments
- See if you’re pre-approved within minutes without impacting your credit score
- Petal reports to all 3 major credit bureaus
- No deposits required
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Why You Might Have More Credit History Than You Think
So-called thin-file consumers whove never taken out a car loan or a mortgage tend to come up short under the traditional definitions of credit history. The good news is that newer credit-scoring models and payment-reporting services have the potential to benefit consumers who have good credit habits even if their traditional credit profiles are lacking.
- How long the accounts have been open
- The accounts level of activity
- Amounts in savings accounts
- Mobile wallet transactions such as PayPal and Venmo
Experian Boost also factors in payments for utilities, eligible streaming services and cellphone service. Services such as PayYourRent and RentTrack that report your rent payments to credit bureaus could also help you leverage a history of being a good tenant into a better credit score.
Chase Freedom Unlimited Card
The Chase Freedom Unlimited card is a great starter for students who arent trying to go overboard on their credit card spending. Unlike most cards, this one has no minimum redemption amount on rewards points.
This card will also give you a $150 bonus if you just spend $500 in the first 3 months. And lastly, you also get 1.5% cash back on all purchases.
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Credit Card Mistakes To Teach Your Kids To Avoid
While you still have them under your wing, teach your teen how to avoid trouble with a credit card. Here are a few common pitfalls they should know about.
Just paying the minimum payment.
A cardholder is allowed to make only the minimum monthly payment on their credit card. However, thats arguably the worst thing to do behind paying late. Paying the minimum allows interest to snowball and debt to accumulate.
Teach your teen they should avoid spending close to their credit limit. Carrying a high balance puts one in danger of incurring overlimit fees, on top of accumulating high debt. Many experts recommend keeping spending under 30% of ones credit limit.
This is a sure path to decreasing a credit score. Because your teen is an authorized user on your account, you can protect them by paying your card bill as usual. But if you see signs your teen may pay late in the future, its best to nip the problem in the bud.
Chase Freedom Student Credit Card: Best Sign
Why we picked it: This student credit card from Chase offers new cardholders a $50 bonus after they make their first purchase within the first 3 months from account opening.
Pros: The card features a good base rewards program: Cardholders receive 1% cash back on all purchases and an additional 4% cash back on Lyft rides . They also receive a $20 bonus each account anniversary that their account is still open and in good standing for up to the first 5 years of card ownership.
Cons: This card is designed for student credit cardholders, so if youre outside that demographic, you might want to consider other credit cards for no credit.
Who should apply? With a decent sign up bonus and solid rewards rate, this is a good fit for students who want to build up their credit. For more credit cards tailored to college students or recent graduates with a short or no credit history, see our student credit cards.
Read our Chase Freedom® Student credit card review
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Apply For A Traditional Credit Card
Teens who are 18 years and older can apply for a traditional credit card without the help of a parent or a guardian but must prove a source of income. The tightened these regulations on credit card companies, requiring applicants under 21 years of age to demonstrate their ability to make payments. Therefore, teens will have to provide proof of income, such as a W-2 form from their employer.
Keep in mind that the Credit CARD Act of 2009 restricts teens without income such as a part-time job to gain credit card approval. Any allowance, even on a regular basis, will not count.
Pay Your Credit Card Bill On Time And In Full
Speaking of spending, making too many purchases with your credit card could also lead to big balances that are difficult to pay off in time. Late or missed payments never look good on your credit history. On the other hand, making it clear that you can consistently pay on time and in full will do wonders for your credit score.
A more immediate concern of missing payments is APR, which represents the cost of interest and other fees that would apply to any unpaid charges carried over from one billing cycle to the next. To avoid APR, pay off your entire balance by the due date whenever possible.
Some credit-building cards provide extra incentive by offering to raise your credit limit after youve made a certain number of consecutive on-time payments.
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Wells Fargo Cash Back College Card
With this card, you will get a 3% cash back on gas, groceries, and drugstore purchases up to $2,500 for the first six months. Also, you will earn 1% on everything else you purchase with the card. Additionally, use the card to transfer money using the routing number and account number to other people.
Moreover, the card has zero annual fees. It is such a great card that will also enable you to grow your credit scores to higher limits if you utilize it well. Again, you can access your FICO score, credit education, and tools with Wells Fargo Online. This means that you will be able to monitor your progress with time. Learn more.
Young Adults With Good Credit
Best Travel Rewards
Why it’s one of the best credit cards for young adults to get:If you have a good job and enjoy traveling, whether for work or pleasure, one card that should definitely be at the top of your list is the Capital One Venture Rewards Credit Card. Spending $3,000 within 3 months of opening an account will get you 60,000 miles, worth $600 toward any travel expense that you charge to the card.;Venture also gives double miles on all purchases. The Venture Card has a $95 annual fee and does not charge foreign transaction fees.You can learn more from our Capital One Venture Review.
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Try A Secured Credit Card
If you have the income to get a credit card, but your lack of credit history is keeping you from getting approved, consider getting a secured credit card. This type of card requires you to make a cash deposit as collateral against the credit limit. Even though youve made a deposit, youre still responsible for making payments toward the balance you accumulate. The deposit is only used if you default on the credit card balance and never clear up the delinquency on your own.
Depending on the card issuer, your card can be converted to a regular credit card if you manage your card well.
The 15 Best Credit Cards In Canada For 2021
Whether you’re looking to earn more rewards or save with the lowest interest rates – we’ll match you with the right cards in under 2 minutes.
Every year, Ratehub.ca rounds up the best credit cards in the country to help Canadians wade through the financial weeds to find the card most suited to their spending habits and lifestyle.
Like clothing, credit cards arent one-size-fits-all. Weve said this before the best one for you depends on your financial situation and maybe one that saves you money via a low interest rate, balance transfer offer or cash back, or provides value through rewards points that can be redeemed for travel and merchandise.
Alongside a few standout new mentions, several of the best credit cards in Canada for 2020 have also made it on our list for 2021 because they continue to offer great value.
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