There’s nothing like being a student and getting your hands on your first credit card. It feels like freedom – you’re grown up and the world is your oyster.
But there are strings attached to credit cards, and if you’re not careful, you could get caught in a spiral of credit card debt.
Here’s a cautionary tale about getting my first credit card to learn from, and what to know before getting your first credit card.
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My cautionary tale
I was living away from my parents for the first time and had a piece of plastic that allowed me to get the things I wanted.
I used my credit card to buy:
- CD’s (because I’m THAT old and was morally against Napster),
- movies (because Netflix wasn’t a thing and I needed something to help me procrastinate),
- things to decorate my dorm room, and…
- a fish that I called “Hal” (which was short for Jalapeno, obviously). Plus…
- I went out to eat and drink with my friends far more than my college student wallet should have allowed.
I saw my credit card as free money and didn’t give a single thought to the fact that nothing in life is free and eventually I would need to pay all that money back.
Needless to say, my frivolous spending caught up with me and I was left with $1,000 in credit card debt.
So, I did what any Liberal Arts student would do… I went out, got myself a job at Subway as a “sandwich artist,” and started working the night shift to pay back that $1,000 + interest.
In a nutshell, I was not as informed about credit cards as I should have been and I’m sure my story isn’t the only one like this.
As the saying goes, we learn from our mistakes, and I’m here to pass on the things I have learned to any students out there who are looking to get a credit card for the first time.
1. Know how credit cards work
There are many people who think credit cards are bad, but that isn’t always true.
Credit cards can be abused and get irresponsible users in a lot of trouble, but there are usually two sides to every coin.
There are a lot of good and valuable things that credit cards can offer cardholders, such as:
- valuable rewards,
- premium perks, and
- complimentary insurance. Plus…
- they can save cardholders time and money.
But to truly use them well, it is good to know how a credit card and interest works, the fees that can accompany them, and the damage that they could cause for your future.
So be sure to do your research.
2. Know which credit card would suit you best
I did zero research before getting a credit card.
I took the first credit card I was offered and I hung onto it for about 15 years.
15 years of purchases that could have been earning me valuable travel or cash back rewards.
Who knows where I could have traveled had I been accumulating rewards that whole time!
The best student credit card in Canada right now is the
$20 GeniusCash + 5% cash back for the first 3 months + No annual fee.*
3. Know your monthly budget
I cannot stress this point enough…
Just because you have a new shiny credit card, that doesn’t mean your budget should fly out the window.
You need to continue to spend within your means and only buy things you can actually afford.
Set a budget based on your income and stick to it – no matter how tempting that new plastic might be.
4. Know your credit score and stay on top of it
I’m one of those people who hates going to the doctor.
I always think I would rather not know if something is wrong with me.
And for several years, I felt the same about my credit score.
I never wanted to know what it was, because, I assumed that if it was bad, I wouldn’t want to know.
However, knowing those 3 little digits has really helped me be more responsible and plan for my future.
If your credit score is less than ideal, now is the time to start taking steps towards getting your score back on track.
And don’t worry – there are ways you can check your credit score for free.
One easy way is by getting a MogoAccount. You can check your credit score when you like, and there’s no cost to do so.
MogoAccount
5. Know yourself
Finally, I think one of the most important tips is to know yourself.
Getting a credit card as a student is a great way to help build your credit history.
However, if you don’t trust yourself with a credit card, many people will tell you not to get one. But I think you should get one anyway.
Here is what I suggest:
- Step 1: Get a credit card and put a monthly subscription on it (your Netflix or your Spotify).
- Step 2: Set up your bank account so that it will automatically pay off your credit card every month.
- Step 3: Put your credit card somewhere you will not use it, or even give it to a parent to hold onto. This will allow you to build your credit while removing the temptation to overspend.
Just because you have a credit card, that doesn’t mean you need to use it a lot or even carry it around in your wallet.
Just keep in mind that in order to help build your credit score, you will need to put an occasional purchase on your credit card to show lenders that you are able to pay bills on time.
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Best student credit cards
So now that you’ve learned from my mistakes and are ready for your first credit card, what are your options?
Here are some of the best student credit cards around that you can take a look at. And each one of these has no annual fee.
| Student Credit Card | Welcome Bonus | Earn Rates | Apply Now |
|---|---|---|---|
| BMO CashBack Mastercard |
5% cash back for the first 3 months (terms) |
* 3% cash back on groceries (up to $500 per month) * 1% cash back on recurring bill payments (up to $500 per month) * 0.5% cash back on all other purchases |
Apply Now |
| BMO Air Miles Mastercard | 800 Air Miles (terms) |
* 1 Mile per $25 spent on all purchases * 3x the Miles for every $25 at participating Air Miles partners * 2x the Miles for every $25 spent at any eligible grocery stores |
Apply Now |
| Scotiabank SCENE Visa | 5,000 points |
* 2 points per $1 spent at Sobeys, Safeway, Home Hardware, and Cineplex * 1 point per $1 spent on all other purchases |
1. Best student cash back credit card
For the best student credit card, the
Here’s what you’ll earn on your purchases:
- 3% cash back on groceries (up to $500 per month)
- 1% cash back on recurring bill payments (up to $500 per month)
- 0.5% cash back on all other purchases
2. Best student credit card for Air Miles
Looking to earn rewards in one of Canada’s largest rewards programs – Air Miles? For you, there’s the
Here’s what you’ll earn on your purchases:
- 1 Mile per $25 spent on all purchases
- 3x the Miles for every $25 at participating Air Miles partners
- 2x the Miles for every $25 spent at any eligible grocery stores
3. Best student credit card for movie goers
Let’s face it – going to the movies can be an expensive proposition. So take a bite out of those costs with the
You’ll earn SCENE points on all your purchases:
- 2 points per $1 spent at Sobeys, Safeway, Home Hardware, and Cineplex
- 1 point per $1 spent on all other purchases
These points can be redeemed https://creditcardgenius.ca/blog/borrowell-canda-review movies, discounts on popcorn, and even restaurant discounts. It can be a way to make a night out more affordable.
What about you?
Do you have any cautionary tales to share with young readers?
Or do you have any other tips for a student choosing their first credit card?
We would love to hear from you in the comments below.
FAQ
What are some tips for selecting your first credit card?
We’ve outlined some tips you can see here, but the biggest one is to know how credit cards work. Every $1 spent on a credit card has to be paid back, and if it’s not done on time, you’ll start to pay credit card interest. Most credit cards have high interest rates of 20%, and can put a big strain on your finances.
What is the best student credit card?
The best student credit card right now is the BMO CashBack Mastercard for students. You’ll earn up to 3% cash back on your purchases.
What are some ways I can get student discounts?
There are plenty of ways for students to get some extra discounts. We’ve outlined 32 ways students can get extra discounts here.
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