Student credit card vs. secured credit card is a topic that many college students need to tackle when sorting out their finances.
This is true whether you are a US citizen off to college in a different state or an international student traveling to the US for the first time.
And, while it can make sense for international students to obtain US credit cards for foreigners, they don’t always have access to the same cards that US students can obtain.
In this article, we’ll break down the various options and discuss student credit cards vs secured credit cards to help you move forward and make an educated decision.
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Table of Contents
Student Credit Card
Most major US banks offer student credit cards as a way to establish a credit relationship with young people just starting out. For this reason, the application requirements for student credit cards are typically more flexible and the credit limits are typically lower.
Benefits of a Student Credit Card
The benefits offered to students are often comparable to those offered by standard credit cards, second-chance credit cards, and credit cards for lower credit scores. For instance, many US banks offer rewards cards for students including cash back on qualifying purchases, no annual fees, and travel rewards.
Secured Credit Card
Unlike an unsecured student credit card, secured credit cards require the cardholder to first make a qualifying deposit at the bank or financial institution. The amount held on deposit at the bank is then considered the “limit” of the credit card and allows the bank to issue a card without an established credit history.
Benefits of a Secured Card
Secured credit cards are an effective way for international students to obtain a US credit card without having existing credit history in the US. Additionally, a secured credit card can help international students to build US credit history, making them eligible for more lucrative credit cards in the future.
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Best Credit Cards for a Student
Ultimately, the best credit card for a student is going to depend on a range of different factors, including:
- Is the applicant a US citizen or a foreign citizen?
- Does the applicant already have US credit history?
- Does the applicant already have an SSN or ITIN?
- Does the applicant have a US address and proof of that address?
- Which benefits is the applicant interested in obtaining?
Based on the answers to these questions, most students will be able to narrow down their options to a range of available cards.
Of course, international students who do not have any US credit history and do not have an ITIN (or SSN) will have the least number of options available to them.
With this in mind, it’s important to review all of the card application requirements before you spend time applying for a credit card that you might not even be eligible for.
Frequently Asked Questions
Below are three of the most common questions that we receive from students trying to navigate student credit card vs secured credit card options in the US. If you have further questions, don’t hesitate to contact us directly.
What’s The Difference Between a Student Credit Card & a Secured Credit Card?
The difference between a student credit card and a secured credit card is that a secured credit card requires you to maintain a deposit at the bank. The amount held on deposit at is then considered the “limit” of the secured credit card. By contrast, a student credit card is an unsecured credit card and does not require an upfront deposit. Instead, the credit card issuer is extending an unsecured credit line to you based on your creditworthiness and credit history.
Which Credit Card Should I Choose?
The credit card you choose should be based on your specific goals, desired benefits, intended purchasing behavior, and the acceptance policies that you can realistically meet. In other words, if you are an international student with no US credit history, you should not apply for a credit card that requires at least 12 months of US credit history and a high credit score.
What Does Secured Mean?
Secured means that you will make a qualifying deposit at a bank in order to “secure” the spending limit on a credit card. In other words, the amount that you deposit will be equal to the credit line that the bank is willing to extend to you. In many ways, secured credit cards are similar to debit cards – except they allow cardholders to build US credit history, report payment history to US credit bureaus, and they come with built-in consumer protection.
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