It’s never a bad idea to have a credit card around just in case, even if you’re just a student. However, at this point in your life, you may not know enough about credit cards to know which one would be best for you. To help you make your choice, we’ll list off some of the best student credit cards Canada has to offer and talk a little about what makes them so great.
Should Students Have Credit Cards At All?
The first question some people might be asking when thinking about this subject is whether or not there is any point in singling out good credit cards for students at all. Many people feel that students are too young to responsibly handle the burden of credit and will inevitably get themselves into trouble with it if they have access to it. Debt can add up quickly when you aren’t used to being able to access it by just swiping a card, and if you build up too much so early in life, it can haunt you for years to come and set you back significantly in life. Those who worry about the effects of student credit cards are trying to shield the students for whom they are advocating from the possible fallout of credti card misuse, which is a noble goal that makes them worthy of consideration.
However, there is another side of this issue to consider that arguably outweighs the importance of those valid concerns. In order to take full advatage of the potential of having credit (getting good rates and favourable terms on credit cards and loans, getting approved for mortgages, etc.), you’ll need a good credit score. The trouble is that your score is partially based on the length of time in which you’ve been using credit, so you’ll need to start that process long before you have any serious need for it.
Students rarely manage to qualify for cards with a high limit anyway, so the amount of trouble that they can realistically get into with a card of their own in minimal. Having a credit card at your side at this age can help you to learn more about financial responsibility while also setting yourself up for success later in life. If you know how to handle it, it’s an excellent idea.
What Makes a Good Student Credit Card?
The number one attribute that a student card must have is a reasonable cost (preferably none, in fact). Students are an extremely price-sensitive bunch, and that’s probably as it should be considering how little money they tend to have. They don’t have the space in their budget to pay a high annual fee on a credit card, even if that credit card would theoretically provide more than enough value to justify it. Remember, little money also means little spending, so a student’s ability to earn rewards will rarely match that of a full-fledged adult consumer. Rewards should therefore not factor heavily into the decision of whether or not to choose a card with a fee.
Speaking of which, relevant rewards are another critical thing that sets a truly great student credit card apart from the pack. While many credit cards are content to offer rewards that have little practical use for someone with a very limited income, others excel in that area. For the most part, students will not benefit much from lavish vacation packages that cost thousands and thousands of reward points – they’re much better off with small, simple prizes that they can access quickly, and that’s what you should look for in the best student credit cards Canada.
What Should Students Avoid In Their Cards?
The most important thing that students should pay attention to when choosing a credit card is the interest rates they may end up paying. You want to choose a card with at least average rates, if not low ones. Opting for a high-interest card might be convenient in the short term because their application standards tend to be lower, but you’ll pay for it in the long run.
The second most important thing to check is the annual fee. Cards with a high or even moderate annual fee are likely cost students more than the value they will be able to get out of them, so these options should be avoided. As mentioned previously, free is best, but don’t even think about getting the luxury cards right now. You are very unlikely to be approved and you likely cannot afford the fees on them anyway.
Best Student Card Canada Candidates
With that framework in mind, we’d like to present our list of the best student credit cards Canada Although these cards all have some similarities in their framework, each is good at a particular thing and will only be suitable for those who value that particular role. Think about which one is best for you before start your search so you can narrow down your options and have more success in your efforts.
For Cash Back
It’s a rare student who couldn’t use a little more cash in their pocket for anything from food and drinks to outings with friends, and using a cash back credit card can be a nice way to secure a small sum for those purposes each month. There are several of these on the market that are suitable for students.
The Tangerine Money-Back credit card is one of the best cash back cards in Canada in general, but it is particularly good for students. It allows you to get 2% cash back on 2 categories of your choice (3 if you choose to have your rewards deposited into a Tangerine savings account), as well as 0.5% cash back on all other purchases – all for free. This is noteworthy because student spending doesn’t always line up with standard household spending, sometimes limiting the earning potential of cards designed for those standards when they are being used by students. For example, groceries is a very common bonus category, but it won’t be of nearly as much use to you if you have a pre-paid meal plan to provide your food while you’re away at school. Likewise, many students walk far more than they drive making gas a poor choice of bonus category as well. Instead of those two common ones, you can choose the categories that more accurately represent where you spend your money.
As great as the Tangerine card is, it does require that you have at least a mediocre credit history in order to get it. That means that if you’re starting fresh, it may not be an option for you. Instead, you might try the BMO SPC CashBack MasterCard. This option isn’t quite as lucrative with its base rate of 1% cash back on anything you buy, but it is easier to get and also gives you access to the highly useful SPC (Student Price Card) program for cheaper daily living. This combination of rewards and benefits makes this card just as good as the Tangerine one in a different way. You’ll get an even better deal for the first 3 months, during which time you’ll earn 5% cash back instead (up to a $100 limit, naturally). Overall, this card isn’t much of a compromise and shouldn’t be difficult to get.
While most students won’t have many occasions to travel and will prefer to avoid travel rewards as a result, students who live far from home may find them helpful to defray the costs of travelling to and from visits to their family. Unfortunately, most cards at this level will not include the insurance benefits you might have liked in order to ensure smoother trips, but that’s something for you to look forward to when you upgrade to better cards after graduation.
For the time being, the BMO SPC Air Miles MasterCard offers decent reward rates on the high-value Air Miles program (1 Air Miles for every $20 you spend) along with the same extremely convenient SPC program membership as is included in the cash back version of this card described above. It’s one of the most practical choices out there for students wanting a travel card specifically, but keep in mind that if your spending is very low, you still might not even be able to earn enough for one single free flight during your entire time in school. If you think that may be the case for you, you might be better off opting for a different type of card with lower redemption thresholds.
For Low Interest
As has been mentioned, students are notorious for getting themselves caught up in extensive credit troubles, so it might not be a bad idea to choose a card that will minimize the extent of those problems if that’s something you think you might have an issue with.
The American Express Essential credit card offers 8.99% interest across the board for no annual fee, plus an introductory balance transfer offer that allows you to pay a mere 1.99% in interest on balances moved over to this card from another one. This card is without a doubt the best deal on interest that most students are going to get for years to come, and it’s great for making sure that you don’t get into any real trouble with your card while you get used to the idea of having access to credit at all. It doesn’t come with any rewards, though, which may be a big downside for some. It can also be somewhat difficult to qualify for without much of a credit history behind you, but you’ll never know if you can get it until you try.
If none of these credit card categories is quite what you’re looking for, you might prefer a card that strays out of these established bounds and lets you get a little more enjoyment out of life. These cards are perfect for students because they offer an excuse to indulge at a time when money can be a bit tight.
Since most students are frequent movie-goers, Scotiabank’s SCENE Visa is one such card. Using it gets you 1 SCENE point for every dollar spent, plus 2,500 bonus points for making $500 in purchases in your first 3 months. You can also regularly boost that rate by taking advantage of multiplier offers both at Cineplex cinemas and at certain restaurants, including popular options like Swiss Chalet and Harvey’s. When such an offer is active, it’s not uncommon to receive 15-30 times the points you would otherwise have gotten, putting you far closer to a fun reward in just one transaction. You can redeem these points for free movies, money off of concessions, and credit toward meals at affiliated restaurants.
If movies aren’t your thing, there’s another atypical card that you might want to try. The CIBC Tim Hortons Double Double Visa card is an offbeat card option that gets you 1% back on all your purchases in Tim Cash that you can use to buy food and drinks at any Tim Hortons location. Its main strengths are that it is easy to use and that it can be used to easily supplement your food budget if you ever find yourself running low – instead of having to wait to build up a bunch of cash back rewards before you can redeem them, you can use whatever Tim Cash balance you have immediately to score yourself some free coffee, muffins, soup, or whatever else catches your eye. The monthly freebies program is also excellent, particularly considering that students are just as likely to want a snack to study with on the weekends (the only time you can redeem these offers) as they are during the week.
Apply For the Best Student Credit Cards Canada In Minutes
There is no telling which one of the cards on this list of best student credit cards Canada is the best one for you, but any of them could be yours with the right initiative. Go to Bonsai Finance’s website now and you could be finished with applying for them in just a few short minutes. There is a whole new world of credit card advantages out there waiting for you, so get started moving toward it now for your best chance at prosperity.