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If you’re a student, you may be wondering whether it’s a good idea to get a credit card at all, never mind trying to figure out which credit card might be best for you.

There are a lot of myths about credit cards out there, but if they’re used responsibly, credit cards can be an incredibly powerful financial tool that will help you build your credit score while earning rewards that can save you piles of money.

BMO offers 2 Mastercards specifically designed for students, one of which lets you earn cash back on every dollar you spend, and the other earns AIR MILES everywhere you shop.

Here we take a closer look and dig into the details.

Overview of BMO student credit cards

So, what do these 2 cards have to offer?

Credit card Annual fee Welcome bonus Rewards Apply now
BMO CashBack Mastercard for students $0 Earn 5% cash back for your first 3 months, up to $2,500 in spending (terms) * Earn 3% cash back on groceries, up to $500 in spending
* Earn 1% cash back on recurring bill payments, up to $500 in spending
* Earn 0.5% cash back on all other purchases
Apply now
BMO AIR MILES Mastercard for students $0 800 bonus AIR MILES (terms) * Earn 2x miles for all purchases at participating AIR MILES partner locations
* Earn 1 mile for every $20 in purchases
Apply now

Rewards programs overview

What’s the difference between these 2 types of rewards?

Cash back rewards

Cash back rewards are one of the simplest and most flexible types of credit card rewards you can get.

The concept is simple: you earn a certain percentage of cash back for every $1 you spend. Later, depending on how your particular card works, you either get the cash back whenever you want, every month, or in a lump sum once a year. Easy peasy.

Where things get a little complicated is when there are spending categories with different earn rates, and spending caps for different types of purchases.

The has both spending categories and caps, so it can be a little tricky to figure exactly how much you’ll be able to earn.

AIR MILES Rewards

If you’re Canadian, there’s a pretty good chance you’ve heard of the AIR MILES program before. It’s a hugely popular rewards program in Canada, with dozens of retail partners across the country.

We’ve written an extensive guide to the AIR MILES Rewards program, but the gist of it is that by signing up for an AIR MILES account, you can start collecting AIR MILES at any participating retail partners.

But there’s a super easy way to boost your AIR MILES earn rate: get an AIR MILES credit card, such as the .

With an AIR MILES credit card, not only can you earn double miles when you’re shopping at AIR MILES partners, you can earn AIR MILES everywhere you shop. It really is a slam-dunk if you’re interested in collecting these valuable and flexible rewards.

How flexible and valuable are they? Here’s a rundown on how you can redeem your AIR MILES and the average value of each, expressed as cents per mile (CPM):

  • Flights: 17.2 CPM
  • Car rentals: 16.2 CPM
  • Hotels: 12.3 CPM
  • Vacation packages: 11 CPM
  • Attractions: 13.4 CPM
  • Concerts: 21.6 CPM
  • Merchandise: 7.7 CPM
  • Cash rewards: 10.5 CPM

The challenge with AIR MILES is that there are 2 kinds of miles you can collect: Dream Miles and Cash Miles.

Any Cash Miles you collect can only be redeemed as cash rewards, where 95 miles is worth $10.

Dream Miles are what you have to collect if you want to redeem them for anything else in the list above. If you want to use your AIR MILES for concert tickets (one of the best ways to use them), you’ll have to collect Dream Miles.

Luckily you can change your Dream Miles to Cash Miles earning ratio any time you want, so once you make a decision, it’s not like you’re stuck with it forever. However, once you earn one type of mile, it can’t be converted to the other.

Low interest introductory offer for balance transfers

If you’re currently carrying some high-interest debt on another credit card, grabbing one of these 2 BMO student credit cards might be a good idea.

Right now both cards are offering a 1.99% introductory interest rate on balance transfers for 9 months, with a 1% fee charged for the amount transferred.

If you transfer your debt and can pay it down before the 9 months are up, you could save a pile in interest payments.

After the 9 month introductory rate expires, however, the interest rate will go up to its normal 22.99% for balance transfers. Just keep an eye out for that, and be sure to pay down as much of that transfer as you can before those 9 months are up.

And, don’t use your card for any new purchases. Your payments get applied to the balance with the lowest interest rate, meaning new purchases will be racking up 20% interest, and defeating the purpose of the transfer.

Earn cash back on all purchases

The is a solid choice for a student credit card with its generous cash back earn rates and other features.

First off, the welcome bonus. Just for signing up for this card, you’ll earn 5% cash back on all purchases for the first 3 months you have the card, up to a maximum of $2,500 in spending. That’s worth up to $125, right there.

After that, you’ll earn:

  • 3% cash back on groceries, up to $500 spent per month,
  • 1% cash back on recurring bill payments, up to $500 spent per month, and
  • 0.5% cash back on all other purchases.

Recurring bill payments include things like your internet service, TV bundle, cell phone, Netflix subscription, utility bills, and more. Those can add up pretty quick, so why not get some cash back for money you’re already going to be spending?

The also comes with 1 year of extended warranty, and 90 days of purchase protection to give you some added peace of mind.

Earn AIR MILES everywhere you shop

We’ve already talked about the AIR MILES rewards program, and if that’s something you’re interested in, the will help you boost your earn rate significantly.

You start with 800 bonus AIR MILES just for signing up, which is always a nice thing.

And on top of that you’ll earn:

And with AIR MILES being good for everything from travel, to concerts, to cash, there’s something in this rewards program for pretty much everyone.

Like its cash back sister card, the includes 1 year of extended warranty coverage and 90 days of purchase protection, giving you some added protection for the things you buy.

BMO student credit card alternatives

Let’s take a look at a couple of prepaid credit card alternatives and see how the BMO student Mastercards measure up.

Credit card Annual fee Welcome bonus Rewards
$0 Earn up to 5% cash back for your first 3 months, up to $2,500 in spending (terms) * Earn 3% cash back on groceries, up to $500 in spending
* Earn 1% cash back on recurring bill payments, up to $500 in spending
* Earn 0.5% cash back on all other purchases
$0 800 bonus AIR MILES (terms) * Earn 2x miles for all purchases at participating AIR MILES partner locations
* Earn 1 mile for every $20 in purchases
$0 Sign up through us using the code “CCGBONUS” and earn 1% extra cash back for the first 90 days (terms) * Earn 0.5% cash back on every purchase
$0 None None

Credit cards 101

While it can seem like “conventional wisdom” is always telling us to avoid things like credit cards and debt, that can actually be bad advice.

Avoid debt

We’re not talking about the debt part, of course. Avoiding debt is always the best thing to do, since it can add up quick if you’re not paying attention, and can become a serious weight around your neck.

Make a budget

If you’re worried about ending up with more debt than you want, being a student is a perfect time to get in the habit of making and sticking to a strict financial budget. It’s seriously one of the most valuable skills you can learn, and will put you in control of your finances for the rest of your life.

Get a credit card

But, let’s talk about credit cards.

Used responsibly, credit cards can be hugely beneficial. Not only can you earn valuable rewards on your spending, they can also help build your credit score and put you on solid financial footing for the future.

Not sure how you’re going to cover your educational expenses this year? Check out our guide to student financing.

Financing for Students

Boost your credit score

If you’re not sure what a credit score is, it’s pretty straightforward. Based on several factors in your financial history, the 2 big credit bureaus in Canada – Equifax and TransUnion – give you a credit score ranging between 300 (very bad) to 900 (exceptionally good).

The higher your credit score, the more favourably lenders are going to look at you as a potential client.

What this means is that your credit score is incredibly important when it comes to things like getting approved for a mortgage, securing a car loan, or even getting a new cell phone plan.

And part of your credit score is based on the length of your credit history. As a student, your credit score is probably not that great, since your credit history is relatively short.

But, if you get a student credit card and use it responsibly (use it to make purchases every month, but also pay it off in full every month), this will help boost your credit score a little bit every month.

Earn rewards

And while you’re doing this to boost your credit score, why not earn some sweet rewards at the same time? Both of these BMO Mastercards for students let you earn flexible and valuable rewards, for no annual fee. What’s not to love about that?

Worrying about the debt you’ll have after you graduate? Get a headstart with our guide to paying down student debt fast.

How to pay student debt in Canada fast

What happens when you apply for a credit card

When you apply for a credit card, the credit card issuer will ask for your credit report from one of the 2 main credit bureaus in Canada. Based on what’s in that report, they’ll decide whether or not you’re a good credit risk.

If they decide you’re not, your application will be declined. If they decide you are? Congratulations, you’ll get a credit card in the mail shortly.

And, student credit cards are designed specifically with students in mind, of course.

Banks know that students usually don’t have a lot of credit history, so they make these cards easier to qualify for if you have a lower credit score.

This helps you by giving you a way to build your credit score and earn rewards with your everyday spending, and it helps the banks by giving them a (hopefully) loyal customer from a relatively young age.

Win win.

Want to save even more money? Apply for our scholarship

We here at creditcardGenius have a scholarship program in which, every year, we award $2,000 to a student in Canada who’s committed to academic excellence, and who has outstanding academic achievement, regardless of their field of study.

If you’re currently a student in Canada, you should take the time to apply. You could get a nice chunk knocked off your student debt this year.

Are you committed to academic excellence? Apply for the creditcardGenius scholarship today.

creditcardGenius Scholarship Program

Bottom line

Getting a credit card when you’re a student can help you boost your credit score while also earning rewards and saving money. The trick is using it responsibly, of course, which is actually pretty easy once you get in the habit of paying off your balance in full every month.

What do you think about getting a credit card when you’re a student?

Do you have one? How is it working for you?

Let us know in the comments.

FAQ

What options are there for student credit cards from BMO?

BMO offers 2 credit cards for students, the BMO CashBack Mastercard for students, and the BMO AIR MILES Mastercard for students. You can read more about them here.

Does the BMO CashBack Mastercard for students have an annual fee?

Neither of the BMO Mastercards for students have an annual fee, so you can earn rewards and build your credit score, all for free.

I’ve always been told that getting a credit card is a mistake. Why should I get one when I’m a student?

Credit cards are actually incredibly powerful financial tools that can help students build their credit scores while earning rewards and saving money.

The trick is to use your credit card responsibly, which means paying the balance off in full every month.

Credit cards aren’t bad, but credit card debt is. With the high interest rates they charge, you should do everything you can to avoid carrying a balance from month to month, or you’ll end up accruing some ugly interest charges over time.