Understanding the best student credit cards in Canada

The realm of credit cards as a student can be daunting but essential for building a strong financial foundation. Students benefit from a credit card for many reasons, like learning financial management and managing different expenses for school and personal purchases. In Canada, selecting the right student credit card involves a careful balance of features, rewards, and fees tailored to the unique needs of students.

With considerations ranging from earning potential and cashback benefits to low fees and introductory offers, students consider several options and research before deciding. This guide delves into some of the top features of the best student credit cards, shedding light on their perks, rewards structures, and suitability for students embarking on their financial journey.

What is a student credit card?

A student credit card helps college or university students with limited credit history or income spend on credit. These cards often have features and benefits tailored to their unique needs and financial circumstances.

Typically, a student credit card has a lower credit limit than a traditional credit card, making it more manageable for individuals with limited financial resources or credit experience. Student credit cards in Canada may also offer special perks like rewards tailored to student lifestyles, lower interest rates, or waived annual fees.

One of the primary purposes of a student credit card is to help students build credit history responsibly. By using a student credit card and making on-time payments, students can establish a positive credit history. A strong credit history is essential for future financial endeavours such as renting an apartment, buying a car, or applying for loans.

Additionally, student credit cards in Canada often come with educational resources and tools to help students learn about responsible credit card usage, budgeting, and managing finances effectively. These resources can be invaluable for students just beginning to navigate the world of personal finance.

Credit card benefits students love

Student credit cards often offer rewards or cashback on categories that align with typical student spending habits. It could include dining at restaurants, purchasing groceries, using public transportation, or even shopping for textbooks. By earning rewards on these everyday expenses, students can maximize the value of their credit card usage and potentially save money or earn perks over time.

No annual fees

The annual can burden students, especially those on limited budgets. Credit cards that waive the annual fee allow students to enjoy the benefits of having a credit card without incurring additional costs. It makes it easier for students to manage their finances and build credit without worrying about extra expenses.

Low interest rates

While it's advisable to pay off credit card balances in full each month to avoid interest charges, students may occasionally need to carry a balance. Credit cards with low introductory annual percentage rates (APRs) or ongoing low interest rates can be valuable in such situations, helping students save money on interest payments and manage their finances more effectively.

Financial education resources

Managing finances independently for the first time can be challenging for students. Credit card issuers that provide educational resources, such as articles, videos, and budgeting tools, help students learn about responsible credit card usage, budgeting, and building credit. For example, here are 12 practical budgeting tips for college students. These resources empower students to make informed financial decisions and develop good money management habits early on.

Special discounts and perks

Credit cards that offer special discounts or perks catered to students can provide additional value. It could include discounts at popular retailers, student-exclusive deals on products and services, or access to events and experiences. These perks help students save money, enhance their overall credit card experience, and make them feel appreciated as customers.

Flexible payment options

Flexibility in payment options is important for students who may have irregular income or fluctuating expenses. Credit cards that allow students to choose their payment due dates or set up automatic payments provide convenience and peace of mind. This flexibility makes it easier for students to stay on top of their credit card payments and avoid late fees or penalties.

Travel benefits

For students who enjoy travelling, credit cards that offer travel rewards and benefits can be highly appealing. These benefits may include earning airline miles, hotel points, or travel credits for eligible purchases. Travel perks, such as travel insurance, waived foreign transaction fees, and airport lounge access, can enhance the overall travel experience and provide added value to students who frequently explore new destinations.

Welcome bonus for student credit cards

While welcome bonuses for student credit cards may not always be as extravagant as those offered with premium cards, there are still some enticing incentives that students can enjoy when they sign up for a new credit card.

Cash back or statement credit

Some of the best student credit cards offer a welcome bonus of cash back rewards or statement credits after you make your first purchase or spend a certain amount within the first few months of account opening. For example, you might receive $50 cashback after spending $500 in the first three months.

Bonus rewards points

Some student credit cards provide bonus rewards points as a welcome offer or meet a minimum spending requirement. You can typically redeem these points for rewards like gift cards, merchandise, or travel. For instance, you might earn 5,000 bonus points after making your first purchase or spending $1,000 on eligible purchases within the first three months.

Waived annual fee for first year

A few student credit cards waive the annual fee for the first year as a welcome offer. It can be a valuable perk, especially for students mindful of minimizing costs.

Introductory 0% APR period

Certain student credit cards may offer an introductory period with 0% APR on purchases or balance transfers for a set period, such as the first six months or year. It can benefit students who make larger purchases or transfer balances from other cards without accruing interest.

Bonus features and perks

In addition to traditional welcome bonuses, some student credit cards may offer bonus features or benefits for new cardholders. It could include free access to credit monitoring services, discounts on student loan refinancing, or complimentary subscription services.

Types of student credit cards

Student credit cards come in various types, each tailored to different needs and financial situations.

Entry-level student cards

An entry-level student credit card is for students new to credit and have limited or no credit history. They often have a lower credit limit and fewer perks than other cards. Entry-level student credit cards may focus on building a credit history by offering basic rewards or cash back options and typically don't have an annual fee.

Rewards student cards

Rewards student credit cards are geared towards students who want rewards on their spending, like a cash back credit card. They often offer cash back or rewards points on everyday purchases, such as dining, groceries, and transportation. Rewards student credit cards may also include special bonus categories tailored to student lifestyles, such as entertainment or streaming services discounts.

Secured student cards

Secured credit cards require a security deposit as collateral that determines the card's credit limit. These cards are great for students with limited credit history or poor credit scores. Students can build or rebuild their credit history over time by responsibly using a secured student card and making timely payments.

Student cards with financial education tools

Some credit card issuers offer student cards with built-in financial education resources and tools. These cards aim to help students learn about responsible credit card usage, budgeting, and managing finances effectively. They may provide access to online educational materials, budgeting apps, or credit monitoring services to support students in developing healthy financial habits.

Co-signed student cards

Co-signed student credit cards involve a parent or guardian co-signing the credit card application with the student. This arrangement allows students to benefit from the co-signer's credit history and may result in lower interest rates or higher credit limits. Co-signed student cards can be helpful for students who have limited or no credit history but have a trusted co-signer willing to share responsibility for the account.

Student cards with introductory offers

Some student credit cards come with introductory offers, such as 0% APR on purchases or balance transfers for a limited time. These offers can benefit students who make large purchases or consolidate existing debt. However, it's important to carefully review the terms and conditions, including the duration of the introductory offer and any applicable fees or restrictions.

Are there student credit cards with rewards or cash back on tuition payments?

In Canada, student credit cards typically offer rewards or cash back on common student expenses like groceries, dining, and transportation. However, rewards or cash back, specifically on tuition payments, are less common. Here are a few options and considerations if you're looking to use a credit card for tuition payments and want to earn rewards:

General rewards or cash back cards

General rewards and cash back credit cards offer students the opportunity to earn rewards on everyday purchases, including dining, entertainment, and sometimes tuition if the educational institution accepts a MasterCard or Visa card for students. The Scotiabank SCENE Visa Card helps students accumulate SCENE points, which can be redeemed for movies, dining, and other experiences, enhancing their social and entertainment budgets.

The KOHO Prepaid MasterCard offers cash back rewards on every dollar spent on eligible purchases and bonus rewards when shopping at KOHO partners. The intuitive platform and user-friendly tools help students track spending habits and learn about budgeting with prepaid cards. While these cards might not specifically target tuition payments, using them for large expenses can yield significant rewards, provided the school's payment policies align.

Cards with flexible reward categories

These cards are versatile, offering rewards points or cash back on all purchases, making them suitable for a broad range of expenses, including tuition payments if accepted by the institution. For example, the TD Rewards Visa Card lets students earn TD rewards points that can be redeemed for travel, merchandise, or gift cards, providing flexibility in how they utilize their rewards.

Similarly, the CIBC Dividend Visa Card offers cashback on everyday purchases, potentially including tuition, helping students earn money back on significant educational expenses. These flexible reward structures can help students maximize their benefits across various spending categories.

General credit cards with student-friendly features

A general credit card with student-friendly features has tools that cater specifically to students by offering straightforward cash back on all purchases, including tuition, if the institution accepts the credit card network. For example, the RBC Cash Back MasterCard for Students has no annual fee, making it financially accessible for students and allowing them to earn rewards without additional costs. The cash back earned can be used to offset various expenses, making it a practical choice for students looking to manage their finances effectively while building credit.

Payment processing fees

Many educational institutions charge a processing fee for credit card payments, which can diminish the value of the rewards or cashback earned. Students can compare the potential rewards with additional fees to determine if using a credit card for tuition payments is financially beneficial.

In some cases, the rewards might outweigh the fees, but students can do the math to ensure they are making a cost-effective decision. Understanding these fees helps students avoid unexpected costs and make informed financial choices.

Credit limits

Student credit cards often come with lower credit limits, which might not be sufficient to cover large tuition payments. Students should check their credit limit and ensure they can handle the transaction amount without exceeding their available credit.

You may see a pre-authorization charge before the merchant processes your payment, so the credit limit on your account may not reflect your available credit in real time. Exceeding the limit can result in penalties and negatively impact the student's credit score. Managing credit limits responsibly is crucial for maintaining a healthy credit profile and avoiding additional fees or penalties associated with over-limit transactions.

Interest rates

While earning rewards on tuition payments can be appealing, pay off the balance in full each month to avoid high interest charges. Carrying a balance and accruing interest can quickly negate the benefits of any rewards earned, leading to increased debt. Students should prioritize responsible credit card use by budgeting effectively and ensuring they can pay off their balances on time. This practice not only maximizes the value of rewards but also helps build a positive credit history.

Tips for using a student credit card for tuition payments

Before using a credit card for tuition payments, students should check with their institution to verify if credit card payments are accepted and if any associated fees apply. Alternative payment methods such as debit, bank transfers, or student loans might be more cost-effective if the fees for credit card payments are too high.

Students should have a clear plan for budgeting and paying off their credit card balance to avoid accumulating debt. Here are some tips on how to budget better as a millennial to help create strong money management habits. Using a student credit card responsibly for tuition and other expenses can help students build a positive credit history and achieve financial stability.

What does a high school student need to apply for a credit card?

Applying for credit cards in Canada as a high school student can be challenging due to limited credit history and income. However, there are ways for high school students to obtain a credit card and start building their credit.

Proof of income

Credit card issuers require proof of income to ensure the applicant can repay any debt incurred. High school students can provide evidence of part-time job earnings, freelance work, or other sources of income. If a student doesn’t have sufficient income, a co-signer or becoming an authorized user on a parent’s account might be necessary.

Co-signer

Many credit card companies allow high school students to apply with a co-signer, typically a parent or guardian. The co-signer agrees to share responsibility for the debt, which can help the student qualify for a card. The co-signer’s credit history and income are considered during the application process.

Authorized user status

Another option for high school students is to become an authorized user on a parent’s or guardian’s credit card account. As an authorized user, the student gets a card with their name on it, linked to the primary account holder’s account. This arrangement helps students build a credit history without being the primary cardholder responsible for payments.

Student credit cards

Some credit card issuers offer student credit cards designed for young people with limited or no credit history. These cards often have lower credit limits and fewer rewards but are easier to qualify for. Applicants must typically provide proof of enrollment in an educational institution and may need to show some income. A student card is great for students to learn how to build a good credit score and create a strong foundation for qualifying for other cards and credit products once they get older.

Secured credit cards

Secured credit cards are another option for high school students. These cards require a security deposit, which acts as collateral and sets the credit limit. The deposit reduces the risk for the issuer, making it easier for students to qualify. Responsible use of a secured credit card can help build credit history over time.

Parental consent

For applicants under the age of majority (18 or 19, depending on the province), parental consent may be required. Some credit card issuers have specific products for minors that require parental involvement in the application process.

Student credit card eligibility requirements

Age requirement

In Canada, the age of the majority is 18 or 19, depending on the province or territory. Most credit card issuers require applicants to be at least this age. For students under the age of majority, parental consent or a co-signer is often required.

Proof of enrollment

Issuers typically require proof of enrollment in a recognized post-secondary institution, such as a university, college, or technical school, when students apply for a student credit card. It can be in the form of an acceptance letter, current class schedule, or student ID.

Income verification

While student credit cards may have lower income requirements than standard cards, applicants still need to demonstrate some form of income. Some issuers might specify a minimum income level, which can vary but is generally lower than the requirement for a regular credit card.

Credit history

Student credit cards are designed for individuals with limited or no credit history. Having a blank credit slate is often acceptable. If there is an existing credit rating, it should ideally be in good standing without any significant delinquencies or defaults.

Canadian residency

Applicants typically need to be Canadian citizens or permanent residents. Some issuers may accept international students with valid study permits and Canadian bank accounts.

Identification and documents

Students need to provide personal identification information, such as a Social Insurance Number (SIN) for credit checks, a valid government-issued ID (passport, driver’s license, or provincial ID card), and proof of current address (utility bill, bank statement, or rental agreement).

Can international students get a credit card in Canada?

If you're an international student, you may have questions like "Can international students get a credit card in Canada?" or "Can international students get a bank loan in Canada?" Yes, you can open a bank account as an international student and apply for a credit card. The process may be slightly more complex than for domestic students.

International students require a valid study permit to be eligible for a student credit card and potentially an active Canadian bank account with a financial institution offering credit cards. Similar to domestic students, proof of enrollment and identification are required. Some credit card providers also require proof of income or financial support. Here are some personal finance tips for international students to build you up for financial success during your studies.

What's the difference between a student credit card and a prepaid card?

A student credit card helps students build their credit profiles while still in school. They often come with lower credit limits and fewer perks than regular credit cards, making them more manageable for young adults just beginning to handle credit. Student credit cards may offer rewards programs, such as cash back or points for certain purchases, and often have no annual fees. These cards require a credit check during the application process, and you make monthly payments on your credit card bill.

A prepaid card, also known as a prepaid debit card, is a card you load with money and functions like a debit card. Prepaid cards have many benefits, like better accessibility, money management, and other perks. Budgeting with prepaid cards helps students understand their spending habits. Prepaid cards can be used for everyday transactions, online purchases, and sometimes even for direct deposits of paychecks.

Ready to apply for a student credit card?

A student credit card allows students to manage everyday purchases throughout their school days, such as recurring bill payments, going to the movies, and some of these hidden costs students may have. Most student credit cards don't have an annual fee and offer a lucrative welcome bonus to help students earn rewards on their purchases, such as eligible grocery purchases and school materials. They may also offer a welcome bonus to kickstart your credit journey.

If you're ready to apply for a credit card, look no further than KOHO. Our virtual credit card is student-friendly to spend and earn cash back instantly on every dollar spent on eligible everyday purchases. Manage subscriptions to your favourite streaming sites, gym memberships, and other recurring bill payments. Tap your credit card on your mobile wallet for added convenience, whether travelling or going to the grocery store.

Our intuitive platform provides the tools to help track spending habits, set limits, and understand your budget to plan for your spending and savings. Are you worried about unexpected expenses and how they impact your credit score? Sign up for overdraft protection coverage, giving you up to $250 zero-interest cash advances for emergencies when you exceed your credit card limit. You can request a free credit score report to monitor your credit score and ensure you're on the right track to building a strong credit profile.

Want to start building an emergency fund and save for future education-related expenses like tuition, housing, groceries, and school supplies? Put your funds in a KOHO high-interest savings account and earn interest on every dollar to accelerate your savings.

From building your credit with KOHO using our credit card or applying for enterprise accounts with KOHO for businesses, we have your back.