The first credit card is an exciting and scary thing.
On the one hand, it is a step forward in your financial life, a way to learn how to use credit responsibly. On the other hand, it is the quickest way to get deeply into debt if you use credit carelessly.
That’s why it’s crucial for students to develop good credit card habits, according to Barry Choi, a personal finance and credit card expert at moneywehave.com. That means spending within your means and always paying off the balance in full to avoid high interest rates.
Everyone should avoid getting into debt on a credit card, but especially students, as they usually don’t have the income to work their way out of the hole.
The choice of credit cards is dizzying, so The Globe and Mail spoke to three Canadian credit card experts to suggest some of the best options for students.
Most students are young, don’t have a detailed credit history, and don’t make a lot of money, which limits the types of cards they’re eligible for. The good news is that there are still plenty of cards out there that come with great rewards programs or cash-back benefits.
Below we have compiled four of the best credit cards for students, all with no fees.
And remember: you don’t need to have a bank account to get one of the cards.
Cashback cards
Tangerine Money Back Mastercard
This isn’t a credit card specifically for students, but Tangerine’s qualification requirements for this card are simple enough that most working students should be eligible, as all you need to have is an annual income of $12,000.
This card offers some of the best and most flexible cash back benefits: Users get 2% cash back on two spending categories of their choice. Options include groceries, restaurants, and more. Plus, if you deposit your cash back rewards into a Tangerine Savings Account, you get a third category with a 2% cash back rate.
You will receive 0.5 percent on all other expenses.
BMO Student CashBack Mastercard
This cash-back card offers 3 percent cash back on grocery purchases, which Shannon Terrell, a personal finance expert at NerdWallet, calls a very generous rate for any cash-back card. Students also get 1 percent on recurring bills and 0.5 percent on all other spending.
If you plan to use your credit card specifically for grocery shopping or don’t meet the requirements for the Tangerine card, this is one of the best cashback cards for students, according to Mr. Choi.
Reward cards
CIBC Aeroplan Visa Card for Students
Rewards programs are a fickle business. Some programs, like Air Miles, have scaled back the value of their points in recent years.
Aeroplan has been considered one of the strongest travel rewards memberships in recent years, and this CIBC card is the only no-fee Aeroplan card specifically for students, Mr. Choi said.
“It’s nice to be able to start collecting points when you have travel aspirations,” he said.
With the current welcome bonus, you will receive 10,000 points on your first purchase, enough for a one-way short-haul flight in North America, for example from Montreal to Toronto or from Toronto to New York.
Cardholders also earn one Aeroplan point for every dollar spent on gas, groceries and other purchases on Air Canada, and one point for every dollar spent on everything else.
As a CIBC customer, you are also entitled to a free Student Price Card membership, which gives you discounts at hundreds of brands.
Scotiabank Scene+ Card for Students
If travel isn’t a high priority for you, Patrick Sojka of rewardscanada.ca says Scotiabank’s Scene+ rewards program is one of the strongest and most diverse in the country.
“In a way, it’s not appreciated enough because people don’t know that they’ve grown beyond just film production,” Sojka said.
He said Scene+ points are generally worth about a cent per point and can be redeemed for movies, groceries, travel discounts and other rewards.
“It leaves you open to all kinds of reward possibilities – that’s why I love it.”
Cardholders earn two points per dollar spent at Empire Co. Ltd. grocery stores (Safeway, IGA, Sobeys, FreshCo, etc.), Home Hardware and Cineplex movie theaters. They earn one point per dollar spent on all other eligible purchases.
