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Update: Some offers mentioned below are no longer available – Amex EveryDay® Credit Card from American Express, Citi ThankYou Preferred Card for College Students, Bank of America Cash Rewards credit card
As a college student or a recent college graduate, reading about cards like the Chase Sapphire Reserve and The Platinum Card® from American Express can be daunting. For those with little to no credit history, getting approved for one of these prestigious cards is a big obstacle, not to mention the fact that the annual fees for many premium cards are more than $400.
But that doesn’t mean you can’t get on your way to earning credit card rewards — you just have to start a little smaller. So here are six of the best rewards cards for people in college or just out of it, who are on a budget and new to the game.
Discover it® Student Cash Back
People often have the impression that not many stores take Discover, but in a year of using the card, I’ve only been to a total of three establishments in the US that didn’t take my Discover card. In fact, Discover is far more widely accepted than American Express.
Just like the regular Discover it® Cash Back card, the Discover it® Student Cash Back offers an impressive 5% cash back, upon enrollment, on up to $1,500 in purchases in rotating quarterly categories, and 1% cash back on all other spend. But as this card is for students, it comes with an extra bonus — a $20 statement credit for each school year your GPA is 3.0 or higher for up to five years.
And on top of there being no annual fee, Discover matches your total cash back after the first year of card membership, which means on those rotating bonus categories, you’re actually earning a whopping 10% cash back in the first year.
Citi Double Cash Card
The Citi Double Cash Card is great because it earns 2% cash back on all purchases — 1% when you make a purchase, and another 1% when you pay your statement — all with no annual fee. There’s also no limit on the amount of cash back you can earn.
This card is a Mastercard, so it feels a bit more “real” than the Discover. Just keep in mind that the Double Cash does have a 3% foreign transaction fee, so you won’t want to use it outside of the US or on overseas purchases.
Chase Freedom Unlimited
You’re not likely to get approved for the Chase Sapphire Preferred Card if you’re just starting out or only have a single credit card to your name so far, but a good alternate entry point into the Chase ecosystem could be the Chase Freedom Unlimited.
The card comes with a $150 sign-up bonus after $500 in purchases in the first 3 months from account opening, and then earns 1.5% cash back on all purchases with no cap, making it one of the better cards around for everyday spending. But the real beauty of the Freedom Unlimited is if you hold off on redeeming your cash back and instead get a Sapphire Preferred or Sapphire Reserve down the line once your credit is more robust, all your cash back from this card can be turned into much more valuable Ultimate Rewards points that can be redeemed at a higher rate for travel, or even transferred to Chase’s airline and hotel partners.
Bank of America Cash Rewards credit card
This earning structure mimics many credit cards on the market today — including heavyweights like the Chase Sapphire Reserve or Amex Platinum — in offering bonus points per dollar in certain categories. But in this case, since it’s a cash back card, you don’t have to worry about redeeming points. And to make matters even better, you’ll get a 10% bonus when you redeem your cash back into a Bank of America checking or savings account.
Citi ThankYou Preferred Card for College Students
The Citi ThankYou Preferred Card for College Students is great because unlike the Discover it Student Cash Back, Citi Double Cash or Bank of America card, you earn points instead of just straight cash back. These points can then be redeemed for travel, gift cards or even cash back, but earning points definitely helps get you into the mindset of using points. And the ThankYou Rewards points you earn with this card can eventually even be transferred to Citi’s airline transfer partners later down the line if you get a Citi Premier Card or Citi Prestige.
You won’t earn a huge sign-up bonus with this card — just 2,500 bonus ThankYou points after spending $500 in the first 3 months. But you’ll earn 2 points per dollar at restaurants and on entertainment purchases, and 1 point per dollar on all other purchases, which should help you start building your stash of ThankYou points. This card has no annual fee.
The Amex EveryDay® Credit Card from American Express is similar to the Citi ThankYou card in that you earn points with it, not just straight cash back. It also comes with a nice welcome bonus of 10,000 Membership Rewards points after spending $1,000 in the first 3 months.
When using the card, you earn 2 points per dollar at US supermarkets for up to $6,000 a year in purchases (then 1 point), and 1 point per dollar elsewhere. But the real beauty of the Amex Everyday is that the points you earn can be transferred to any of American Express’ Membership Rewards travel partners without having any other Amex credit card. That’s a huge advantage for a card with no annual fee.
It’s interesting to note that the duo of the Discover it Student Cash Back and Citi Double Cash mirror the duo of the Chase Freedom and Chase Freedom Unlimited. The Discover it Student Cash Back is like the Chase Freedom in that it offers 5% cash back, upon enrollment, on up to $1,500 in purchases in rotating quarterly categories, while the “2% back on all purchases” earning structure of the Double Cash is similar to the flat 1.5% cash back of the Chase Freedom Unlimited. Having the first duo will get you used to switching between cards depending on what you’re buying in order to really max out your rewards, which will be a good habit to have when you transition to points and miles-based credit cards like the second duo.
As for the Amex EveryDay and the Citi ThankYou Preferred for College Students, you can start building up points now — whether they be Amex Membership Rewards points or ThankYou points — and then you’ll be ahead of the curve if/when you transfer eventually to higher-end cards like the Citi Prestige or Amex Platinum. It’s never too early to start earning those points, even if you can’t yet qualify for more exclusive cards with higher annual fees.
For Those With No Credit History at All
If you’re starting from square one with absolutely no credit history, I would recommend starting by applying for the Discover card. Not only does it offer a great and easy-to-redeem rewards system, but Discover seems to be more open to people without established credit. Of the four friends that I’ve encouraged to apply for it, all four have been approved.
It’s also important to remember that you won’t have a credit score at all until you make 6 months of payments. If you’re then rejected for a different credit card during the 6 month period after being approved for your first card, it’ll count as a hard inquiry and a significant ding. So wait until you actually have a score (and know your score) before applying for additional cards.
All six of the cards I’ve discussed here are perfect for recent graduates or those still in college who are trying to build their credit without paying exorbitant annual fees. Each card gives substantial rewards at little to no cost, and each promotes good spending habits that mimic other rewards cards. Finally, the approval odds for these cards are generally higher than most other cards, so those with newer or nonexistent credit won’t have to worry as much about being rejected and stuck with nothing to show for a hard credit pull.
Know before you go.
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- 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 17.24-25.99%. Balance transfer fee is 3% of the amount transferred, $5 minimum
- Unlimited 1.5% cash back on every purchase - it's automatic
- Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening
- No minimum to redeem for cash back
- Cash Back rewards do not expire as long as your account is open
- Free credit score, updated weekly with Credit Journey℠
- No annual fee