Contrary to popular belief, students should have credit cards. In general, having a good credit score helps you finance your first home, first car, and so on. Low credit scores would make life harder – you either wouldn’t get approved, or end up paying such high interest rates (which would affect your personal finances).

Students are a huge target for credit card companies. Sometimes companies would sell their credit cards on campus within the first few weeks of school. While it may be good to have a credit card, don’t apply for multiple credit cards at once. Applying for multiple credit cards at once would give you the ‘credit seeking’ status, which would affect your credit score.

General rule of thumb, having 2 – 3 credit cards is acceptable. Anything more than this can be too excessive, and some lenders may see it as a risk.

Below are the top 4 credit cards for students, according to ratehub comparison tool for credit card rewards. Each card provides competitive rewards, and no annual fees. For calculation purposes, we’ll assume that the student spends an average of $500/month.

1. Scotia SCENE® VISA

Net reward (1st year): $256

The Scotia SCENE VISA topped the list in terms of of the net rewards. 5 points are collected per dollar on Entertainment spending, and 1 point is collected per dollar on everything else. SCENE points can be redeemed at participating Cineplex Entertainment theatre locations, or online at cineplex.com.

2. BMO SPC CashBack MasterCard®  

Net reward (1st year): $180

SPC (Student Price Card) is a discount card for students, providing access to various retailers across the country. Discounts range from 10% – 30%. Students can get the SPC discount at various participating locations – checkout www.spccard.ca for the full list. Aside from the SPC discount, students would also receive 1% cashback on their purchases.

3. BMO SPC Air Miles MasterCard®

Net reward (1st year): $132

This card is the same as the BMO SPC CashBack MasterCard®, except credit card holders would collect 1 Air Miles point per $20 spent, instead of the 1% cashback. Air Miles points can be redeemed for travel, merchandises, etc. Check out www.airmiles.ca for the full list.

4. StudentAwards MBNA Rewards MasterCard

Net reward (1st year): $130

An MBNA credit card holder would collect 1 MBNA reward point for every dollar spent. Similar to Air Miles, MBNA reward points can be redeemed for items such as travel, brand-name, merchandise, and gift cards.

Conclusion

Aside from rewards, and credit score booster, credit card companies also offer great extended warranty/customer protection on all purchases. Consumer protection includes coverage for theft/damage on purchases made on the credit card. Except for MBNA rewards card, these credit cards require any amount for family income, making it relatively to apply for. The MBNA rewards card has requirement of a $35K/Year family income.

Like any other credit cards, these cards require to have a clean record, such as no bankruptcy filed in the past seven years. If your credit score is affected by this (or for any other reason), look into getting the Home Trust Secured Visa Card. Secured credit cards require deposits, however it’ll give you the benefits of a regular credit card, such as making purchases online or over the phone.

The best credit card for you really depends on your preferences. Use the ratehub comparison tool to chose your preferred credit card type, annual fee, monthly spending, and what the credit card would be used for. From time to time, credit card companies have generous welcoming bonuses (such as bonus points, or extra cashback). Keep an eye out for these offers and make sure to take advantage of them (only if you do not have more than 2 – 3 credit cards).

Credit cards are great tools for tracking your spending, and receiving rewards simultaneously. As long as it’s used responsibly, credit cards provide great long term benefits through rewards, and credit history.

You may also be interested in: 5 Things You Need to Know About Credit Cards

Writer: Jelani Smith 

Disclaimer: All investing can potentially be risky. Investing or borrowing can lead into financial losses. All content on Bay Street Blog are solely for educational purposes. All other information are obtained from credible and authoritative references. Bay Street Blog is not responsible for any financial losses from the information provided. When investing or borrowing, always consult with an industry professional.