As a student entering college or university, financial independence can come as a shock. Because of this, like many students, you may have developed poor spending habits early on, which can negatively impact your long-term credit and future money-handling skills. At Insurdinary, we provide the tools necessary to make the best financial choices possible.
Instilling responsible financial habits and gaining the knowledge you need to learn how to manage your finances wisely is critical. A credit card is an excellent way for students like you to start building a credit history, which can teach you the importance of financial responsibility and benefit you greatly when submitting rental or loan applications.
Unfortunately, many students often fall prey to the first credit card solicitation they receive, doing little to no research before accepting the card. Obtaining a credit card this way can be dangerous since not all credit cards are suitable for first-time cardholders. We know all too well that nothing can be worse than getting into debt at a young age, which is why we are here to help.
Credit cards are essential in building your credit, so the earlier you start this process, the better. In this article, we'll highlight the best student credit cards available in Canada for 2023 and 2024 and break down the differences between each.
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The BMO CashBack® Mastercard® - Student is currently Canada's number one student credit card for 2022 and is expected to thrive in 2023 also. This card, designed specifically for students, has no annual fee and offers substantial rewards when you spend at grocery stores and supermarkets. For example, the first $500 you spend each month on grocery items earns 3.00% cash back while also earning 1.00% on recurring bills of up to $500. It will also earn 0.5% cash back for all other purchases, making it a strong contender if you want to save money on everyday purchases.
The BMO CashBack® Mastercard® includes enticing welcome offers, featuring up to 5.00% cash back in the first three months of usage while offering an introductory 0.99% interest rate on balance transfers for nine months, with a 2% transfer fee.
You can redeem cash back on your terms in one of three ways.
Apply the cash reward as a statement credit on your bill
You can redeem rewards monthly, annually, on-demand, or any time you reach a certain reward level with a minimum of $25.00. The flexibility of the BMO CashBack® Mastercard® surpasses other cashback cards that only allow reward redemption annually or when the credit card company permits it.
Additionally, when using these cards, qualifying students can receive discounts on rental cars of up to 25% from National Car Rental and Alamo Rent-A-Car locations. These discounts offer an added perk. For example, some students might utilize them to travel back and forth from college to their hometown several times per year.
This card also comes with an extended warranty and purchase protection covering most purchases, which can help you save money if you use it correctly.
Like most cards, the BMO® CashBack® Mastercard features high interest rates, starting at 20.99%, if you do not pay off your balance in full each month. (If you pay a new balance off in full, you will incur no interest charge.) Because of this, it is always in your best interest to pay your credit card balance in full to avoid racking up debt. Be sure to note that a cashback card with 1% cash back on recurring bills and 0.5% on other purchases is a slight drawback, as these numbers aren't very substantial compared to some other cards.
Keep in mind that most cashback cards will have an annual fee. The BMO CashBack Mastercard offers competitive rewards with no annual fee, appealing to students experiencing financial freedom for the first time while on a tight budget. Because of the straightforwardness and opportunities to earn with this card, we've rated the BMO CashBack Mastercard the number one best student credit card in Canada for 2022and 2023.
For the student who prefers to receive points rather than cash back, The BMO Air Miles®† Mastercard®* earns triple miles for every $25 spent at Air Miles partner stores—and double the miles for participating grocery stores. Air Miles partner stores include Sobeys, Shell, Metro, and Staples, among many other big brand names.
As a welcome offer, the BMO Air Miles®† card will earn you 800 miles if you spend $1000 in the first three months of usage. In addition, it offers an introductory interest rate of 0.99% on balance transfers from other cards or to pay off debts for the first nine months, with a 2% balance transfer fee.
Like the BMO CashBack card, the BMO Air Miles®† card provides extended warranty and purchase protection options. Interest is also at the same rate, starting at 20.99%. Because this amount is relatively high, it's wise to always pay off your credit card balance in full each month to avoid paying interest.
You can redeem your rewards for Dream Miles, which apply to flights on some airlines, or Air Miles Cash, reflected as e-gift cards and marked-down prices at Air Miles partner stores. For reference, 95 miles is equal to $10. If you frequently travel and shop regularly at Air Miles partner stores, these savings could be a beneficial way of saving money while doing the things you love.
A downside to this card is that it lacks insurance perks. Other credit may also have no annual fees while offering more coverage.
We ranked the PC Financial Mastercard as the best student credit card for those who frequently shop at the grocery store. This card features no annual fee or income requirements, although having at least a part-time job is recommended when applying. The PC Financial Mastercard does not explicitly advertise as a student card, but because of its lenient application requirements, it is a strong student choice.
Upon acceptance, cardholders will receive a welcome bonus of 20,000 PC Optimum points, which translates to $20.00. In addition, you can earn 25 points per dollar when shopping at any Shoppers Drug Mart location, 30 points when filling up your gas tank at Esso or Mobil, 10 points for shopping at any Loblaws-owned grocery store and for all other eligible purchases. Interest rates start at 20.97%, which is high but aligns with similar cards that have lenient application requirements.
Redeeming PC Optimum points is possible at any Shopper Drug Mart or Loblaw's affiliate retailer store. Ten thousand points equal $10 in rewards. This credit card has substantial rewards for an entry-level cashback or points-based credit card. At the same time, it offers basic coverage for extended warranties and free purchase assurance for up to one year.
Although this card has competitive qualities, a negative aspect is that you cannot redeem points outside of PC-branded retailers. So when choosing the right credit card for you, make sure that the stores where you shop most often are eligible to redeem points.
The TD Rewards* Visa Card is a great credit card for students who enjoy travel, featuring no annual fee and no income requirement to apply. This credit card is very straightforward, appealing to students who travel often and are new to handling their finances. Just like the PC Financial Mastercard, while not advertised as a student card, this card has strong incentives for students. Interest begins at 19.99%.
A $50 welcome bonus is available through Shop with Points at Amazon.ca to greet new cardholders. Unlike the BMO Air Miles card, the TD Rewards* Visa offers redeemable points for flights, plus hotels, rental cars, and virtually anything bookable through Expedia. You will receive 3 points per dollar when booking on Expedia, 2 points on groceries, restaurants, and fast food, and 1 point for all other purchases. Reward points accrue as 1 point per 0.5 cents. These points are redeemable on the ExpediaforTD website.
Purchase and extended warranty protection and rental car discounts from Budget and Avis locations are available as an extra cardholder perk.
Although the 0.5 cent accrual per point isn't stellar, if you are a student avid about travel, this card could be a great way to save money for future trips. In addition, be aware that this card does not offer travel insurance, which is somewhat disappointing for a travel-incentivized card.
The Plastk Secured Visa Rewards Card is the best credit card for students with bad credit or those who want to ease into their financial journey. This card is a prepaid card, so you borrow against your own money to establish your credit: if you deposit a minimum of $300, that amount becomes your card's credit limit until you deposit more. Because your purchases are against your deposit amount, this card can help you avoid overspending and only make purchases that you can afford.
This credit card has a monthly fee of $6 and an annual fee of $48, although the application process is lenient and allows students with bad credit or a history of bankruptcy a chance to rebuild their credit. Keep in mind that the starting interest is relatively low, at 17.99%, but rises to 29.99% after two missed payments. This high-interest potential is risky if you don't pay your monthly credit card bill on time.
New cardholders will receive 5,000 points for a limited time, which translates to $20 after three months. In addition, the card offers an interest-free grace period of up to 25 days. Points are redeemable as a statement credit or for other exclusive member events valued at 250 points per dollar.
If you have a history of bad credit, this card could allow you to build back your credit without the fear of overspending. On the other hand, it is also suitable if you haven't built any credit and want to ease into your financial freedom by limiting your spending ability.
The Plastk Secured Visa can be helpful for many, but the annual and monthly fees may not suit you if you have limited financial resources. Moreover, the risk of missing a payment could result in further debt, leaving you paying 29.99% interest after two missed payments.
If you're an avid cinema-goer and entertainment lover, the Scotiabank® Scene+ Visa Card may be the best student credit card for you, with no annual fee. Accruing five Scene+ points per dollar you spend at any Cineplex Theatre and the ability to earn 10,000 bonus points within the first year, this card's rewards are significant for those who enjoy entertainment.
Rewards are redeemable outside the theatre and applicable to travel, dining, banking, and more. In addition, you can add users to your accounts to earn additional rewards at no charge and receive up to 25% off rental cars at Avis and Budget locations in Canada and the U.S.
Like many other entry-level credit cards, interest begins at 19.99%, so you should pay your statement balance in full each month to avoid the slippery slope into bad credit. Although this card features flexible reward redemption, unless you spend a significant amount of time at Cineplex, the base rate of 1% for all other purchases is not very captivating. Also, a cashback credit card certainly has a broader appeal and more opportunities for you to save money if you're on a tight budget.
Is a Student Credit Card a Good Idea?
A credit card can be a fantastic tool for you to build your credit and learn financial independence while you're a student. Many credit cards offer budgeting mechanisms to help you closely track your payment histories and notify you as you near your credit limit. As long as you are paying your credit cards on time and in their entirety, you have numerous opportunities to save money and earn rewards on the things that matter most to you.
Credit cards often come in handy in a pinch. Unforeseen emergencies happen, and having a credit card is essential when they do. These emergencies could range from unexpected veterinary bills to a car breaking down on a road trip, none of which are enjoyable. Being financially prepared for any scenario offers you many benefits if (and only if) you use credit cards responsibly.
Although having a credit card comes with many perks, it can also create problems if you are financially irresponsible. Not paying off your high-interest credit card balance in full each month is an easy way to slide quickly into debt, which can be very hard to reverse. Remember that bad credit can keep you from receiving loans, renting apartments, getting mortgages, etc., and can alienate you from many other essential aspects of your future livelihood. Bad credit is like a dark cloud lingering above your head.
Applying for your first credit card can be daunting, but luckily, banks make the application process relatively easy. Often, proof of income is necessary. Income can be as little as a part-time job or predictable financial support from a scholarship or family member.
Depending on the province or territory in which you reside, the necessary age for eligibility may vary. To apply, residents in Alberta, Ontario, Manitoba, Prince Edward Island, Quebec, and Saskatchewan must be 18. In all other locations in Canada, the required age is 19.
Please remember that the credit provider will run a hard credit check for each credit card application. If you apply for one or two, it shouldn't significantly affect you, but your already-low credit score could drop if you apply for multiple cards. Therefore, it is best practice to thoroughly research your credit card options to avoid affecting your credit score negatively.
Once you narrow down your credit card options, consider which card could benefit you most. Generally, you'll want to identify the items you spend most on—whether they are groceries, travel, entertainment, or something else—and select the card that will offer the best rewards for that category.
Helpful Tips for Using Student Credit Cards
Before making any hasty decisions, put in the time to research all of the credit cards you are considering. Choosing a card based on an enticing welcome offer or bonus may be tempting. Still, these are fleeting solicitations that don't necessarily reflect how the credit card might benefit you for years to come. Read on as we highlight qualities to consider when researching the best student credit cards.
Low Interest
Finding a low-interest card should be a priority for you as a college student. As a student, you are typically in uncharted waters when you obtain your first credit card, so be mindful that it's easy to make mistakes early on. Finding a credit card with as low an interest rate as possible will help you avoid financial trouble. Remember that credit card companies profit from your financial mistakes, so do your best not to let this happen.
Low Credit Limit
As stated above, college students are new to managing their finances, and it's important to ease into credit building. Because of this, we recommend finding a credit card with a low credit limit. While it may be tempting to accept a card with a high credit limit, choose a card, instead, that is realistic for your budget. A card with a low credit limit can help you to stay within your means and avoid overspending.
No Annual Fee
For first-time cardholders, it's best practice to find a straightforward credit card with no annual fee. More than likely, you have a tight budget, so adding extra costs to the mix won't be beneficial. Furthermore, credit cards with annual fees are typically best for more experienced card users who spend more significant sums of money per month.
Rewards
Find a credit card with rewards that will work best for your lifestyle. For example, a card with redeemable air miles will save you money if you fly a lot. On the other hand, a card with cashback or redeemable points will be best if you spend most of your money on groceries and gas. If you pay your credit card bill in full each month, why not make your money work for you and earn rewards while spending? As long as you are using your credit card responsibly, rewards can be highly beneficial.
Now that you have all the tools you'll need to discover the best student credit cards, and are actively paying your balance on time, take a moment to read about why it may not be a good idea to accept a credit limit increase.
Student Credit Card Types
Choosing the right credit card can be overwhelming with the many options available. As we all have different lifestyles, needs, and interests, selecting a card that works best for your way of life is vital.
For example, someone constantly travelling may benefit from a Travel Rewards card since they earn redeemable miles the more they spend. However, a student doing little travel might benefit more from a CashBack Rewards card to save money. These days, credit cards are available in just about any category, so choosing a credit card that will benefit you the most is crucial.
Student Rewards Credit Cards
Just imagine—a credit card that rewards you for spending money! Hundreds of rewards credit cards are available today, catering to people in specific spending categories and interests. Although a student credit card won't have the same reward opportunities as a higher-tier card, it may still be of great value to you, depending on the reward category.
Student reward credit cards, such as Scotiabank Scene+ Visa and TD Rewards Visa, offer ample rewards without an annual fee. Why not earn rewards for the activities you enjoy most?
Student Cashback Credit Cards
Earn cash back and save money based on where you are spending the most. A cashback credit card is a no-brainer. You can apply rewards to your statement credit to lower your credit balance, deposit them into a savings account, or redeem them for e-gift cards, depending on which card you choose. For example, with the BMO CashBack Mastercard – Student card, you can earn up to 3% cash back on everyday purchases, putting you and your bank account in good shape.
Student No-Annual-Fee Credit Cards
Unless you are swimming in debt or have experience using a credit card, most students will choose a credit card with no annual fee. If you're on a tight budget, you should avoid additional fees at all costs and do your best to save money. However, cards with reasonable annual fees may be the best choice if you are in debt.
As we mentioned above, The Plastk Secured Visa Rewards credit card features a relatively low yearly fee and is a reasonable student credit card to begin rebuilding your credit. Luckily, many student credit cards have no annual fees, making them great credit cards for first-time cardholders.
Student Low-Interest Credit Cards
Finding a low-interest credit card should be a priority for any first-time cardholder. Overspending is easy to do for someone new to financial responsibility. Unfortunately, slip-ups happen, and when they do, it's best to have a credit card with low interest to avoid further debt. Paying off your credit card in full each month is the best practice. But when money is tight, a low-interest credit card will be best for peace of mind.
Find the Best Prices for All Your Financial Needs With Insurdinary
In summary, we've rated the BMO CashBack Mastercard - Student as the number one best student credit card in Canada for 2024. We encourage you to explore and research all credit card possibilities to find the one that will work best for your lifestyle. Then, let your money work for you and earn rewards on your everyday purchases.
Learning the fundamentals of saving money doesn't have to be intimidating. At Insurdinary, we can save you money by helping you find the lowest rates possible. With over 100,000 monthly users and happy customers, we invite you to let us help you access the best insurance rates in Canada.
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Additionally, take an in-depth look at all health insurance plans available in Canada to learn more about the potential coverage accessible to you.
Hopefully, you now feel confident in choosing the best student credit card and understand how to apply for and use it well. Using a credit card correctly can significantly benefit you as a student by helping you build your credit and learn to be financially responsible.
