Student vs starter credit cards: What’s the difference?
Quick insights
- Student credit cards are generally designed to cater to the needs and lifestyles of college students. Starter credit cards are generally offered to individuals who are new to credit or have limited credit history.
- Both credit cards can provide opportunities for you to establish your financial profile and practice responsible credit management.
- It can be helpful to do research on both credit cards to decide which one best aligns with your individual preferences while maximizing benefits.
When it comes to navigating the world of credit cards, student and starter credit cards can serve as an entry point to help individuals build their credit history and demonstrate financial responsibility. While both cards have several similarities, each card caters to different demographics and financial situations. They can differ in eligibility criteria, rewards programs and interest rates. Both cards present unique opportunities for maximizing benefits and rewards.
What is a student credit card?
A student credit card is a credit card designed specifically for college students. It can be a great way for students to build their credit history. Student credit cards usually have lower credit limits and often have low annual fees. A lower credit limit on student credit cards, while limiting purchasing power, can help promote financial discipline and long-term credit health among young adults.
Some student credit cards offer rewards tailored to student needs such as cash back on textbooks. It may be a good idea to use your credit card responsibly and avoid accruing debt beyond your means.
At this time, Chase does not offer student credit cards.
What is a starter credit card?
A starter credit card is often tailored to individuals with limited or no credit history. This could be a recent college graduate or young adult looking to build their credit. Starter credit cards usually have lower credit limits compared to other credit cards but may be slightly higher than student credit cards.
Some starter credit cards may require a security deposit but not all. The security deposit is usually the same as the credit limit on the card or could be a bit more. The deposit is used as a backup in case you’re unable to repay any outstanding balances on the card.
Eligibility requirements
Understanding the eligibility requirements can help prospective applicants better navigate their options and choose the right card that aligns with their goals and current financial situation.
Eligibility requirements for student credit cards
Student credit cards may have flexible eligibility requirements such as only requiring proof of enrollment in a university. Student credit cards often have an age requirement. If you are under 21 but at least 18, you may be able to get a credit card on your own, but issuers may require you to show proof of income such as a part-time job.
If you are under 21 and unable to show sufficient income, you might need a parent or other adult with good credit to co-sign the account with you. Interest rates may be lower and security deposits are generally not required. Some credit card issuers don’t allow for co-signers on credit cards, including Chase.
Eligibility requirements for starter credit cards
Starter credit cards may require proof of income in the form of pay stubs or tax returns. These credit cards are generally accessible to individuals with limited credit history. Normally, you will need fair to average credit scores and you may need a security deposit as collateral.
Comparing rewards and benefits
It can be beneficial to look at the different rewards and benefits each type of credit card has to offer to make an informed decision.
Student credit card
Some student credit cards may offer rewards and benefits tailored to the needs of college students. The most common perks are cash back rewards on purchases such as:
- Textbooks
- Dining
- Groceries
Some student credit card programs may provide incentives for good academic performance such as statement credits for achieving a certain grade point average (GPA). Student credit card programs often offer educational resources on financial literacy and credit management.
Starter credit card
Rewards and benefits can vary widely depending on the issuer and specific starter credit card. Some starter credit cards offer cash back on purchases. For instance, some starter cards may offer you the opportunity to get 1% to 2% cash back on select categories like grocery stores, gas stations or dining. There are starter credit cards that may provide introductory offers like a sign-up bonus. Additional perks might include extended warranties or complimentary access to your credit score.
Building credit with either card
Building credit with either card can be a valuable step towards establishing a solid financial foundation.
Student credit card
It can be important to take some time to decide when is the best time to apply for a student credit card and consider the potential advantages:
- Establish a credit history
- Build your credit score and profile
- Potential to earn cash back or rewards for good grades
- Use educational resources to create good credit habits early on
Starter credit card
Applying for a starter credit card can help individuals with little to no credit history build their credit profile. Here are some of the key advantages of having a starter credit card:
- Establish a positive credit history and potentially improve your score
- Opportunities for gradual increases in your credit limit over time
- Serve as a stepping stone to become eligible for other credit cards and opportunities to earn rewards
In summary
Both credit cards can be valuable tools for individuals who are starting out and looking to build their credit. In choosing between a student and starter credit card, you may want to consider various factors such as your spending habits and financial goals. Regardless of the card you choose, making on-time payments and keeping your credit utilization low can be key to building and maintaining credit.
