So, you’re a student in Canada, and you’re thinking about getting a credit card. Great idea! Credit cards can be super helpful for managing expenses, building credit, and gaining some financial independence.
But with so many options out there, which one should you choose? Let’s dive into the world of student credit cards and find the best one for you.
Why Students Need Credit Cards
Convenience and Financial Independence
Having a credit card means you don’t always have to carry cash around. It’s convenient for online purchases, emergencies, and everyday spending. Plus, it’s a step towards financial independence. Learning to manage a credit card wisely can set you up for future financial success.
Building Credit History
Starting to build your credit history early is crucial. A good credit score can help you later when you need to rent an apartment, get a car loan, or even land a job. Using a credit card responsibly is one of the best ways to build your credit.
What to Look for in a Student Credit Card
When choosing a credit card, there are a few key features to keep in mind:
Low or No Annual Fees
As a student, you probably want to avoid extra costs. Look for a card with no annual fee or a very low one.
Rewards Programs
Who doesn’t love rewards? Some student credit cards offer cashback, points, or other rewards for your spending. These can add up over time and provide great benefits.
Low Interest Rates
Interest rates are important if you ever need to carry a balance. Look for a card with a low interest rate to minimize the cost of borrowing.
Easy Approval Process
As a student, you might not have a long credit history. Choose a card that’s designed for students and has an easier approval process.
Top Recommended Credit Cards for Canadian Students
Scotiabank SCENE Visa Card
The Scotiabank SCENE Visa Card is perfect for movie lovers. Earn SCENE points for every dollar you spend and redeem them for free movies, meals, and more.
BMO CashBack Mastercard for Students
The BMO CashBack Mastercard offers a great cashback program with no annual fee. Earn cashback on every purchase, with bonus rates for groceries and recurring bill payments.
CIBC Dividend Visa Card for Students
The CIBC Dividend Visa Card for Students gives you cashback on everyday purchases and has no annual fee. It’s a solid choice for students who want to earn while they spend.
RBC Rewards+ Visa
The RBC Rewards+ Visa is another excellent option. Earn RBC Rewards points on every purchase and enjoy no annual fee. Points can be redeemed for travel, merchandise, or even to pay down your balance.
Scotiabank SCENE Visa Card
Overview and Benefits
The Scotiabank SCENE Visa Card is a fantastic option for students who love movies and dining out.
Rewards Program Specifics
Earn 5 SCENE points for every dollar spent at Cineplex theatres or on Cineplex.com, and 1 point for every dollar spent elsewhere. Points can be redeemed for free movies, meals, and more.
Pros and Cons
Pros:
- No annual fee
- Great rewards for movie lovers
- Easy to earn and redeem points
Cons:
- Limited rewards categories
- Lower point value for non-movie purchases
BMO CashBack Mastercard for Students
Overview and Benefits
The BMO CashBack Mastercard is ideal for students looking to earn cashback on their purchases.
Cashback Details
Earn 3% cashback on groceries, 1% on recurring bill payments, and 0.5% on all other purchases. There’s no annual fee, making it a cost-effective choice.
Pros and Cons
Pros:
- Generous cashback rates on groceries and bill payments
- No annual fee
- Easy to redeem cashback
Cons:
- Lower cashback rate on non-grocery purchases
- Some spending categories not included
CIBC Dividend Visa Card for Students
Overview and Benefits
The CIBC Dividend Visa Card for Students offers solid cashback rewards with no annual fee.
Cashback and Dividend Options
Earn 2% cash back on groceries and at Tim Hortons and 1% on all other purchases. Cashback is automatically credited to your account annually.
Pros and Cons
Pros:
- No annual fee
- Good cashback rates on groceries and Tim Hortons purchases
- Automatic cashback redemption
Cons:
- Annual cashback redemption
- Limited bonus categories
RBC Rewards+ Visa
Overview and Benefits
The RBC Rewards+ Visa is a flexible rewards card with no annual fee.
Rewards Program Specifics
Earn 1 RBC Rewards point for every dollar spent. Points can be redeemed for travel, merchandise, gift cards, or to pay down your balance.
Pros and Cons
Pros:
- No annual fee
- Flexible rewards program
- Points never expire
Cons:
- Lower rewards rate compared to other cards
- Limited earning potential
How to Apply for a Student Credit Card
Step-by-Step Application Process
- Research and Compare Cards: Look for the card that best suits your needs.
- Gather Required Documents: You’ll typically need your student ID, proof of enrollment, and personal identification.
- Fill Out the Application: Most applications can be completed online.
- Submit the Application: Double-check all information before submitting.
- Wait for Approval: Approval times vary, but you’ll usually hear back within a few weeks.
Tips for Using a Student Credit Card Wisely
Avoiding Debt
It’s easy to overspend with a credit card. Stick to a budget and only charge what you can afford to pay off each month.
Paying Off the Balance Each Month
Avoid interest charges by paying off your balance in full every month. This also helps you build a good credit history.
Monitoring Spending
Keep track of your spending to avoid surprises when your bill arrives. Many credit cards offer apps that make this easy.
Building and Maintaining Good Credit
Importance of a Good Credit Score
A good credit score opens doors to better interest rates on loans, and credit cards, and can even impact rental applications and job offers.
Tips for Building Credit
- Pay on Time: Late payments can hurt your credit score.
- Keep Balances Low: High balances relative to your credit limit can negatively affect your score.
- Use Credit Wisely: Only charge what you can afford to pay off each month.
Common Mistakes to Avoid with Student Credit Cards
Overspending
It’s easy to overspend with a credit card. Stick to your budget and avoid impulse purchases.
Missing Payments
Always pay at least the minimum payment by the due date. Missing payments can result in late fees and damage your credit score.
Ignoring Fees and Interest Rates
Be aware of your card’s fees and interest rates. Avoid carrying a balance to prevent high-interest charges.
FAQs About Student Credit Cards
How can a student get approved for a credit card?
Students can get approved for a credit card by choosing a card designed for students, providing proof of enrollment, and sometimes having a co-signer.
What happens if a student misses a payment?
Missing a payment can result in late fees, increased interest rates, and damage to your credit score. Always aim to pay on time.
Can a student have more than one credit card?
Yes, but it’s important to manage them responsibly. Having multiple cards can increase your credit limit, but also the risk of overspending.
How can a student improve their credit score?
Students can improve their credit score by making payments on time, keeping balances low, and using credit responsibly.
Are there any hidden fees to watch out for?
Yes, always read the fine print. Look out for annual fees, late payment fees, and foreign transaction fees.
Conclusion
Choosing the right credit card as a student in Canada can set you on a path to financial success. Whether you go for the rewards of the Scotiabank SCENE Visa, the cashback of the BMO CashBack Mastercard, the straightforward benefits of the CIBC Dividend Visa, or the flexibility of the RBC Rewards+ Visa, make sure to use your card wisely. Build your credit, avoid debt, and make the most of your student credit card to secure a bright financial future.