Which Are the Best Credit Cards for Students with Bad Credit

A credit card allows you to borrow money from your card issuer. There are two main kinds of credit cards: secured and unsecured credit cards, whereby you can get any cards from a bank, a credit union, or a mobile wallet. They are usually available for people 18 years and above. However, students can get them for their financial needs. I will discuss credit cards for students with bad credit later on.

Bad credit refers to the poor credit scores of a borrower. It means you have an awful borrowing history because you either paid late or defaulted on your debt payments. Financial companies usually report your borrowing and usage of loans to credit bureaus. These are bodies entrusted by the federal government to keep borrowing information of credit card users and other loan borrowers. When you request a loan from a bank or any other relevant institution, they must make a hard inquiry about your credit stand.

When the bureaus get your borrowing details, they usually use it to calculate your credit scores and compile your borrowing history. Credit scores help determine your creditworthiness which refers to your capacity to pay a given loan. If you have poor scores, you have a poor borrowing history. Therefore, you are a high risk to any financial company because of your unlikelihood to pay a given loan.

How can a student acquire a credit card?

Credit cards require you to have at least 18 years of age to apply. Some students have not attained the requirement. Therefore, it is impossible to apply on their own. They require guarantors to stand in for their applications. Guarantors may be their parents or guardians who need to provide their details, such as phone number, SSN, identification documents among others.

Apart from providing the necessary things, the given institution will make a hard inquiry on the scores of the parent/guardian. If they have bad scores, they may not stand in for the underage student and will need to get either a secured credit card for rebuilding credit or unsecured cards for bad credit. Later on, after getting substantial scores, they can then guarantee their young ones.

Guarantors can monitor the card usage of their young ones to make sure that they are not misusing money. If you are an adult student with the proper documents, you can apply for a credit card, especially if you meet eligibility.

What are the dissimilarities between secured and unsecured credit cards?

credit cards for students with bad credit

I have mentioned that we have secured and unsecured credit cards. But what are the dissimilarities between the two? Well, we have some differences between the two kinds of cards. They include the following.

  • Secured cards require you to deposit a particular amount of money in your account, while unsecured ones require scores.
  • You can get a secured one without any credit history, while unsecured ones require borrowing history.
  • Financial companies do not make hard inquiries when applying for secured credit cards. However, they do if you apply for the unsecured ones.
  • The deposit amount dictates your borrowing limit for secured credit cards, while scores do so for unsecured ones.

Even though unsecured credit cards are difficult to get, we still have easy cards to get. There is a guaranteed approval of unsecured credit cards for bad credit.

How are secured and unsecured credit cards similar?

Despite the above differences, the cards have some similarities, including the following.

  • Both cards allow you to grow your scores when making timely payments with any credit company. Your issuer reports to the bureaus, who then keep your borrowing, usage, and repayment records.
  • You pay interest whether using a secured or unsecured credit card. Secured credit card interest rate is usually friendly compared to that of fair and bad credit cards.
  • Their usage is the same.

How do you use a credit card?

Credit cards are payment cards that allow you to buy goods and services online and at physical stores. When buying online, you only need to present the card number, the expiry date, and the CVV, and your card service provider will facilitate the transaction.

You can also pay at the physical store by tapping or swiping your card at the register. The spent amount is then deducted from your account.

Another way you can use your credit card is by withdrawing money from ATMs. Even though the activity is expensive, sometimes it may be necessary to withdraw the funds. You can also transfer money from your card to your bank account. That is called cash advance and also attracts high charges.

Which are the best credit cards for students with bad credit?

Credit cards are significant for students to make their shopping easy. You mustn’t have a borrowing history as you can get approved for a credit card with no credit scores. That is if you opt for the insecure ones. There are various credit cards that you can get to better your school life. They include the following.

1) Deserve Edu Mastercard®

The credit card is mainly for those students with bad credit. It comes with cashback rewards and credit toward Amazon Prime Student. You can earn unlimited 1% cashback on all qualifying net purchases using your card. Also, you can receive credit for Amazon Prime Student, up to $49 total, and no payment of annual fees.

To qualify for the card, you may need to produce enrollment verification. That is usually the invitation letter from your school.

2) Journey Student Credit Card from Capital One

The card allows you to access scores from Capital One CreditWise to manage your credit appropriately. You can earn an unlimited 1% cashback reward on every purchase, which is boosted to 1.25% total cashback when you make on-time payments. You will also access a higher credit line after five on-time payments. It has no annual fee at all.

3) Discover it® Student Cash Back

Once you get the card, you get a 5% cashback for up to $1,5000 in eligible bonus category purchases every quarter you activate. You also earn unlimited 1% cashback on the other purchases. The card Charges no annual fees. You also get an annual $20 cashback bonus every year your GPA is 3.0 or higher.

4) Surge Secured Mastercard®

Another useful student credit card is the surge Secured Mastercard. It is fast to apply and requires you to make a $300 initial refundable deposit which becomes your credit limit. You get a 1% cashback reward on every purchase you make. When you register for e-statements, you get free access to your Vantage 3.0 Score from Experian.

You can be sure to grow your scores fast since it reports to all credit bureaus. You will be under the Mastercard Zero Liability Protection by using the card. Again, you must have a checking account to apply for the card.

5) Discover it® Secured Card

The card requires you to deposit at least $200 when applying. The amount of money you deposit becomes your borrowing limit. Once you have enough scores, you can upgrade to an unsecured credit card. While using the card, you will be able to earn 2% cashback rewards at gas stations as well as restaurants on up to $1,000 in combined purchases every quarter. It charges 24.24% APR (variable).

Interestingly, you will not pay an annual fee for card usage. After eight months, the company will evaluate your scores every month to see if you can get a secured one.

6) SunTrust Secured Credit Card with Cash Rewards

The card offers unlimited cash back on every purchase and a bonus of 2% cashback rewards on up to $6,000 in combined category purchases every year. You can also earn unlimited 1% cashback on all other purchases. It charges a $32 annual fee.

Interestingly, the company evaluates your scores after 12 to 18 months to determine your eligibility for an upgrade to an unsecured SunTrust card.

7) Golden 1 Visa® Platinum Rewards for Students

The card allows you to earn 3% cashback on grocery stores, gas stations, and restaurant purchases. You can earn unlimited 1% cashback on all other purchases. With the card, you pay no annual fee.

You can qualify for the credit card if you work in California, belong to a select employee group, are a relative to a member, or are a member of the Financial Fitness Association.

How long does one take to build credit with a secured credit card?

The duration taken varies from one borrower to the other. If you are serious enough, you can improve within a few months. But how long does it take to build credit with a secured credit card? Usually, it takes about six months to attain a realistic change of scores.

Bottom line

Credit cards allow users to borrow funds from the issuing financial company whereby we have secured and unsecured credit cards. Students can use the cards for their everyday transactions. There are even others for bad credit whereby students can use and upgrade to unsecured credit cards. It can take about six months to see a realistic change in scores.