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"WalletHub" featured Pace University's Lubin School of Business Professor Edmund H. Mantell in "Student Credit Cards with No Credit"
You can get all of the following student credit cards with no credit. Credit card companies actually roll out the red carpet for students despite their lack of credit history (some offers are from WalletHub partners). They do this because of students’ earning potential and decades of forthcoming financial independence, which can be very profitable for banking institutions. To qualify, all a student must do is demonstrate the independent income or assets needed to pay at least their minimum monthly bill (usually around $10 for student cards). But if that’s not possible, it’s worth looking into having a parent co-sign, given the importance of credit building at this stage in your life.
As long as you pay your bill on time and avoid maxing out your credit line after opening one of the following cards, you will begin building the credit needed to rent an apartment, buy a car, take out a good loan and save on insurance premiums once you graduate. It may even help you get a job if you plan on working in a field that requires a security clearance or the handling of money. So make sure to browse the available student credit cards for no credit, including both secured and unsecured offers, and submit an application for the card that will allow you to build credit at the lowest possible cost.
If you’d like a recommendation, WalletHub’s editors compared all of the student credit cards in our database of 1,000+ credit card offers. We looked at their fees, rates and rewards. And we picked the best options for different types of students. You can find an overview below and more info at the bottom of the page.
Ask the Experts -Edmund H. Mantell, Professor at Pace University - Lubin School of Business
How important is it for students with no credit history to get a credit card?
It is very important for a student (or any responsible adult with no credit history) to get a credit card. If a student discharges the credit card debt every month, that history will be useful later in life when the person wants to borrow a large amount of money from a lending institution (e.g. a bank) to finance a big ticket purchase (e.g. a home).
Does being a student make it easier to get a credit card with no prior credit experience?
Being a student does not make it easier for an applicant with no prior credit experience to get a credit card. Many full-time students are unemployed (or employed only part-time.) The lack of a student applicant's steady income raises a question for the issuer of the credit card as to whether the applicant can discharge the credit card debt.
What are some of the biggest credit-card mistakes that students make?
The single biggest mistake that student card holders make is manifested as financial myopia. What this means is that if an inexperienced user of a credit card (such as a student) makes a purchase, the card holder fails to recognize that he or she is merely deferring (not avoiding) payment for the purchase. This mistake is compounded if the card holder does not discharge the credit card debt in the month it is posted by the card issuer. In that case, interest accrues on the unpaid balance of the student's debt, usually at an astoundingly high annual rate. For example, 12% to 18% per year.
Is it easier for a student with no credit to get a credit card if he or she goes to an Ivy League school or gets straight A's?
It may be easier for a student with no credit to get a credit card if he or she goes to an Ivy League school or gets straight A’s. The reason has to do with the so-called "credit risk" of issuing credit cards to students. The finance jargon signifies the risk that a student card holder will default on the loan. That is to say, the student will fail to pay the interest as well as the principal of the loan. In that case, the issuer of the card, usually a financial institution, is left holding the bag. If a student applicant for a credit card attends in Ivy League school or gets straight As, those facts are considered evidence of the student's responsible behavior and his/her propensity for self-discipline in academic life. That kind of evidence may influence the potential card issuer in favor of issuing a card to a person with no credit history.
To what extent does having no credit hold back a recent college graduate?
If a recent college graduate has no credit history, that fact may work against the graduate when he/she applies for a loan to finance a business venture or to finance the purchase of a home. Any lender wants the money lent to be secure. If a potential lender is shown a satisfactory credit history of a potential borrower, that fact will encourage the lender to feel more comfortable making a loan.
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