The 6 best student credit cards in Canada for 2023

The 6 best student credit cards in Canada for 2023

• Best student credit card for cash back: BMO CashBack Mastercard
• Best student credit card for Air Miles: BMO Air Miles Mastercard
• Best student credit card for groceries: PC Financial Mastercard
• Best student credit card for travel: TD Rewards Visa
• Best student credit card for bad credit: Plastk Secured Visa Rewards
• Best student credit card for entertainment: Scotia Scene+ Visa for students

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The BMO CashBack Mastercard - Student is a no annual fee rewards credit card that offers particularly strong returns on everyday essentials from grocery stores and supermarkets. It earns 3% cash back on the first $500 you spend on groceries every month and 1% on recurring bills up to $500 every month (0.5% cash back after that). For all your other everyday purchases, you’ll net 0.5% cash back without limits.

That's not to mention their welcome offer of up to 5% cash back in your first three months, plus a 0.99% introductory interest rate on balance transfers for nine months with a 2% transfer fee

While there are rewards caps on the card’s two bonus categories, they do reset with the start of every new 30-day billing cycle. And at $500 per month in each category, they’ll be hard to max out, especially on a student’s budget.

This credit card has the trio of features that most appeals to students: 1. no annual fees 2. the ability to earn straightforward rewards, and 3. no income requirement.

Since this is a cash back credit card, students won’t have to think about the complexities or limitations of loyalty points programs, and can instead get an injection of cash. This can be particularly valuable for students who want to focus on saving on their everyday purchases rather than racking up points for discounted flights. Accessing your cash back is also extremely easy, as you can redeem for as little as $1 at any time instead of having to wait a month or even a year to access your rewards. The card’s three-month welcome offer of 5% is also strong, particularly for a no fee card geared towards students.

This card offers purchase and extended warranty protection and discounts on rental cars from eligible National and Alamo agency locations.

 

Pros:

• No annual fee
• 3% cash back on groceries makes it one of the best no fee cards to own for that spending category
• Great welcome offer: up to 5% cash back in the first three months, plus a 0.99% promo interest rate on balance transfers for nine months with a 2% transfer fee
• No income requirement - perfect for students on a fixed income
• Cash back system is more straightforward than points
• Redeem cash back for as little as $1 at a time

Cons:

• 1% cash back rate on recurring bills and 0.5% on everything else isn’t particularly compelling
• Bonus categories each have a monthly cap of $500 (but reset monthly)

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If the aforementioned BMO CashBack Mastercard piqued your interest but you’re looking to invest in a points program and regularly shop at Air Miles partner stores (think Sobeys, Metro, Shell, Staples, among many others), the BMO Air Miles Mastercard may be more up your alley.

This card offers triple the miles for every $25 spent at Air Miles partner stores, double the miles for every $25 spent at any eligible grocery store, charges no annual fee, and there’s no income requirement to qualify. The card also features a welcome offer of 800 miles when you spend $1,000 on the card in the first three months, plus an introductory interest rate of 0.99% on balance transfers for the first nine months (2% balance transfer fee applied).

The miles earned on this card can be redeemed for either Dream Miles (which can be put towards free or discounted flights on select airlines) or Air Miles Cash (can be redeemed for e-gift cards or discounts at Air Miles partner stores in increments of 95 miles for $10).

The BMO Air Miles Mastercard offers multiple opportunities to double dip your rewards, especially if Air Miles stores are located near your home, dorm, or campus. Not only will it earn three times the miles at partner stores (roughly the equivalent of 1.26% – 1.5% in rewards per dollar spent, depending on what you redeem for), you can also earn miles twice when you show your Miles Collector Card in addition to your credit card.

We also appreciate the Air Miles online shopping portal, airmilesshop.ca. This website is filled with deals that either help you rack up bonus miles or discounts when shopping online from a huge range of retailers including Apple, Walmart, Amazon, Nike, H&M, and more.

This card offers the same side perks as the BMO CashBack Mastercard: purchase and extended warranty protection as well as discounts on rental cars from eligible National and Alamo agency locations.

 

Pros:

• No annual fee
• Earn a whopping three miles for every $25 spent at Air Miles-partnered retailers and two miles for every $25 spent at any eligible grocery store
• Earn one mile for every $25 spent everywhere else
• Get twice the miles when used in conjunction with your Air Miles membership card
• Get amazing deals and rack up bonus miles by shopping online at airmilesshop.ca
• No income requirement - easy to be approved for

Cons:

• Minimal insurance perks - other no-fee cards offer more in the way of coverage

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With the PC Financial Mastercard, students will earn 25 PC Optimum points per dollar at all Shoppers Drug Mart locations, at least 30 points per dollar when filling up their tank at Esso and Mobil gas stations, and 10 points per dollar at Loblaws-owned grocery stores and for all other purchases.

PC Optimum points can be redeemed at affiliate retailers (Shoppers Drug Mart and Loblaws banner grocery stores) in increments of 10,000 points for $10. So, 10 points is like the equivalent of 1% in cash back store credit, 20 points is the equivalent of 2%, and so on.

This card has no income requirement, no annual fee, and as a retail credit card, the application requirements are considerably more lenient even for students with no prior credit history. That said, it’s not a full-fledged student card and therefore may require you to earn some form of income.

With a minimum earn rate of 10 points per dollar (the equivalent of 1% in rewards), the PC Financial Mastercard manages to out-earn most entry-level cash back or points cards (which start offering rewards from 0.5%) on general everyday purchases.

PC Optimum points are also redeemable at over 2,500 stores associated with the PC Optimum program – from Shoppers Drug Mart and JoeFresh to popular grocery stores such as Loblaws and No Frills – so it won’t be difficult to put your card’s points to good use.

Cardholders receive basic coverage in the form of free purchase assurance and free extended warranties (up to one year). PC Optimum does regularly run personalized offers and in-store promotions to help you rack up additional points when shopping at affiliated retailers like Joe Fresh and Loblaws banner grocery stores like No Frills and Real Canadian Superstore.

 

Pros:

• Earn 25 PC Optimum points per dollar at Shoppers Drug Mart, 30 points per dollar at Esso/Mobil, and 10 points per dollar at all Loblaws-owned grocery stores and on everything else - one of the best values you can find for a cash back or points-based entry-level card
• Straightforward redemption system - 10,000 points is equal to $10
• Wide variety of retailers to redeem at, giving you plenty of options
• No annual fee or minimum income requirement, making it accessible to students

Cons:

• Points cannot be redeemed outside of PC-branded retailers
• Higher-than-average purchase interest rate of 20.97%
• Not a lot of benefits or perks included

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If you’re a student who travels regularly – whether it’s to fly back home during the holidays or satisfy your lust for exploring new places – the TD Rewards Visa Card could be your ideal match.

The card boasts an excellent welcome offer where you can a 9.99% promotional interest rate for the first 6 months. Apply by May 28, 2023.†

The no-fee, entry-level credit card earns TD Points which you can redeem for flights, hotel stays, car rentals, or virtually anything available on Expedia – one of the world’s largest travel search engines. Points are redeemable online from the ExpediaforTD website in flat increments of 100 points for $1 (or 1 point for 0.5 cents).

The card earns a solid 4 points per dollar on travel you book online from the Expedia for TD website, 3 points per dollar on groceries, restaurants and fast food, 2 points per dollar on regularly recurring bill payments and 1 point on everything else.

As far as travel rewards programs go, TD Rewards is one of the easiest and most straightforward, making it the perfect fit for credit card beginners. 1 TD point is always worth 0.5 cents when used online at Expedia for TD and can be used to book flights on virtually any airline of your choice. There are no complicated rewards charts, fluctuating points values, or high and low seasons.

The fact it earns triple the points on travel booked from Expedia for TD also means students who do travel once or twice a year can earn a significant boost in rewards.

This card offers purchase and extended warranty protection and discounts on rental cars from eligible Avis and Budget agency locations.

 

Pros:

• No annual fee
• Welcome offer: a 9.99% promotional interest rate for the first 6 months. Apply by May 28, 2023.†
• Earn 4x the points when booking travel on ExpediaforTD.com, 3x the points on groceries, restaurants and fast food, 2x the points on recurring bill payments
• Can redeem points for virtually any travel-related expense on the Expedia for TD website - perfect for students who regularly travel home from school
• Easy points system: one point always equals 0.5 cents when used at Expedia for TD, and points can be redeemed in flat increments of 100 per dollar.

Cons:

• Return rate of 1 TD point = 0.5 cents in travel rewards isn’t the best out there - plenty of higher-earning no fee alternatives
• No travel insurance - a substantial oversight for a travel-based card

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If you’re a student who’s racked up some debt or solely want to focus on building a credit history (rather than earning rewards) then the Plastk Secured Visa Rewards card could be an option worth considering. As a secured credit card, the Plastk Secured Visa Rewards operates a little differently than the others on this list. You’ll put forward a deposit (minimum of $300) and use that as your card’s credit limit. By making purchases against your deposit and paying back what you owe on time every month, you’ll develop a good track record of paying off debt, in turn, developing a good credit history. One feature that sets this card apart its ability to earn points which can be redeemed for statement credits, exclusive member events, and other perks at a value of 250 points per dollar. For a limited time, new members will automatically get 5,000 points (a cash value of $20) redeemable after three months, plus an interest-free grace period of 25 days. While the card does carry a monthly fee of $6 and a modest annual fee of $48, these can easily be budgeted for by most users.

Since this card’s credit limit is tied to a deposit of the cardholder’s own money and can start as low as $300, it can help curtail bad habits related to overspending while also helping students develop a more conscious approach to using credit cards. The Plastk Secured Visa Rewards card also accepts applicants with bad credit histories, including those who have been bankrupt in the past, which can be a saving grace for students who have run into trouble and racked up debts on a previous credit card or other loans (not associated with OSAP) such as car loans or payday loans.

 

Pros:

• Great for those attempting to build (or build back) their credit
• Deposit-based system makes the card very easy to be approved for
• Welcome bonus: 5,000 points ($20 cash value) plus a no interest for 25 days
• Collect points to redeem for statement balances, events, and other perks
• No minimum income requirement
• Only spend money you’ve already put up as a deposit - helps to curb overspending and teach students credit literacy

Cons:

• Annual and monthly fees could pose a challenge for users on a fixed budget
• Standard interest rate of 17.99% shoots up to 29.99% after two missed payments - could be dangerous for some

Guide to student credit cards

Should I get a student credit card?

While the idea of a student credit card may raise concerns about debt and interest payments from apprehensive parents and students alike, the fact is a credit card is an easy and straightforward way of establishing a young adult’s credit history as he or she transitions into financial independence. By paying off a credit card bill on time every month, students can develop a positive payment history, and in turn, a good credit score.

A good credit score can have a profound impact on a person’s financial future and can make it easier to get approved for everything from rental applications to loans with favourable interest rates. And when used responsibly (as in monthly statements are paid off on time and in full), credit cards can also be an effective way to save on everyday purchases through the earning of rewards. With that being said, missing payments or carrying over a balance can result in costly interest charges and a lower credit score, so it’s critical that students understand that credit cards should be used to buy things that can be paid for in full at the end of each billing cycle.

 

How to apply for a student credit card

Thankfully, banks make the application process for a student credit card quite easy, but there are a couple of things to be aware of:

• Make sure you're currently the age of majority in the province or territory where you live. If you're a resident of Alberta, Manitoba, Ontario, Prince Edward Island, Quebec or Saskatchewan, you'll need to be at least 18. For those living anywhere else, 19 is the minimum age of majority.
• You'll usually need to prove some sort of income, even if it's a part-time job. If you're not currently working outside of school, proof of any other financial support (such as a regular allowance from your parents or a scholarship) will do.

Once you know you're able to apply for a credit card, don't make a hasty decision. There are a lot of options available, so do your research and choose wisely. Think about your lifestyle, needs and spending habits, then select a card that best fits those requirements. It's important to remember that with every credit card you apply for, a hard credit check is done by the provider. One of these won't hurt you too badly, but too many at once will have a negative effect on your credit score. Knowing this, avoid applying for multiple credit cards at one time.

 

Types of student credit cards

 

Student rewards credit cards

Everyone wants a credit card that gives them something back, and why wouldn't that include students just starting their credit journey? While most student and entry-level credit cards aren't going to offer the same kind of luxury rewards as higher-tier cards, there are still those (such as the Scotiabank Scene+ Visa we've mentioned above) that offer students the ability to collect rewards and save on future purchases. And for young credit users interested in earning points for travel, cards like the TD Rewards Visa offer the ability to use points for travel purchases like flights and hotel rooms.

 

Student cash back cards

While points are nice, maybe what you're really looking for is a card that will put real money back into your pocket as you spend? If that's the case, a student cash back card (like the BMO CashBack Mastercard - Student) will earn you a percentage of your total spending in cash back. You can use this money to help pay off your monthly statement, put it into a savings account, or purchase merchandise and gift cards, depending on the card and provider.

 

No-fee student credit cards

Life is expensive enough when you're a student. That's why a no-fee student credit card can be a wise choice for younger users on a fixed budget. Banks tend to charge an annual fee for the privilege of using some of their more advanced cards, but most also offer no-fee alternatives. These cards waive any annual fee, allowing users to spend and build credit without the added stress of a yearly charge.

 

Low-interest student credit cards

Many students may not be experienced credit users at the time they activate their first card, and the concept of interest can be unfamiliar territory. Experts recommend always paying off your credit card bills in full, but if you feel that you'd be unable to do that, a low-interest student credit card can save you (at least partly) from accumulating compounding interest that can affect not only your day-to-day life but your ultimate credit score as well. Thankfully, there are options available that offer interest below the standard 19-20% of most credit cards.

 

Tips for using student credit cards

 

Do your research

If you're in college or university, you're going to encounter plenty of credit card providers eager to sign you up using incentives like welcome bonuses and free gifts. While these can be alluring, they're also temporary. That's why you'll want to consider a card's standard features when shopping around - these will tell you what the card actually has to offer you once the promotional period ends. Here's a short list of things to look for:

No annual fee - Chances are, if you're a student, you're on a pretty fixed income. The last thing you want are extra fees and charges in addition to your monthly bill. Look for student cards with no annual fee - there's plenty available.

Low interest - When you're just learning how to use credit, you may not immediately get into the habit of paying off your bill in full every month. If that's the case, you don't want a card that's going to bury you with high interest. Seek out cards with lower interest rates that offer you a bit more slack if you happen to carry a balance.

Low credit limit - Similarly, while a card with a high credit limit may have you salivating, it's usually not a good idea if you're new to using credit. Overspending can quickly escalate, leaving you mired in debt before you've even graduated. Instead, start off with a low-limit card that will give you much-needed boundaries and keep you from getting in over your head.

Rewards - While plenty of student credit cards offer rewards, it's important to think about how you intend to use the card and what kinds of purchases you'll be making. For instance, if you go out to eat with friends regularly, a card that offers high earning potential for take out and restaurants may be a good bet. If you intend to use the card for everyday purchases like gas and groceries, however, seek out one that offers good points or cashback value in those areas. Matching a card's rewards with your own spending habits is the best way to maximize your savings.

 

Pay bills in full and on time

One of the biggest benefits to owning a credit card early in life is that it give you a head start on developing a healthy credit score. And the best way to do that? Make sure your monthly statements are paid on time and in full. You can give yourself the best odds of success by spending within your limits and setting automatic reminders for when bills need to be paid. This way, you'll never get stuck with a bill you can't pay off easily and you'll never forget to pay your statement by it's due date.

 

Don't overspend

This is an obvious one, but don't treat your credit card as free money. Spending more than you can afford to pay off each month can lead you down a fast path to compounded interest and debt - and that can be difficult to climb out of. Instead, stick to a budget and maintain spending limits. This way, you can steadily build your credit stress-free.

For more student credit card tips, check out our blog.

 

Student credit card pros and cons

 

Pros:

It's a great credit-building tool

Building your credit as early as possible is important if you want a strong credit history and score by the time you're ready to consider big life events such as getting a mortgage or small business loan. Not only that, but landlords (and even some employers) may look at your credit report while considering you for an apartment or job. Because of this, it's crucial to develop good habits early.

Credit card providers report your usage and payment history to credit bureaus, which keep a record of this information and use it to develop your credit score (a number from 300-900). The more you use your card while paying off your bills in full and on time, the greater your score will become. They also pay attention to your credit history - that is, how many credit cards you've had and for how long. Getting a credit card early and keeping it active and in good standing goes a long way to developing this as well.

Keep an eye on your spending

On the topic of healthy financial habits, another big benefit to owning a credit card as a student is it's a great way to track what you spend money on (and how much you spend) per month. While you can do this by simply looking at the list of transactions on your monthly statement, some student-branded credit cards actually feature budget tracking - a service that will keep tabs on your spending and send you a notification when you're nearing your limit.

Collect points or cash back

One huge benefit to owning and using a credit card is the ability to earn rewards. While not every credit card offers this, a rewards card will give you points or cash back for using it to make purchases. Some offer the same rate across the board, while others will offer more points or a greater cash back percentage depending on the spending category (gas, groceries, travel, etc.). You can then redeem these rewards for future purchases like travel expenses and merchandise, or put them towards your next statement balance. Either way, they'll save you money.

Useful for emergencies

Life is full of unexpected events, and sometimes these surprises cost more money than you've currently got on hand. Thankfully, having a credit card gives you the ability to cover expenses in an emergency even if you don't have the cash in your bank account.

That being said, credit card interest (and it's corresponding debt) doesn't give you a break just because you needed the money in a pinch. Have a repayment plan in place once your statement arrives to avoid damage to your credit score.

 

Cons:

Interest can pile up

One of the biggest caveats to owning a credit card is the threat of interest - a extra percentage tacked onto your principal balance in the event that your statement isn't paid on time.

Most credit cards carry a purchase interest of around 19.99% (although certain cards offer lower rates). On its own, that may not seem like a big deal, but it could turn into an avalanche if allowed to compound over time. Letting interest grow unchecked is one of the most common ways people find themselves in debt, so its something to always keep a vigilant eye on.

Overspending

Getting your first credit card is a big step. The independence and spending power in your hands can be exciting, and it's easy for inexperienced users to go overboard and begin using their card as if it's free money. While that may be a lot of fun in the moment, you'll eventually have to pay back what you've spent, and even a maxed-out card with a lower credit limit can turn into a problem if you don't have the cash to settle your bill. Credit cards always carry with them the threat of overspending, especially for those who tend to be more impulsive. If this sounds like you, it may be a good idea to start with a secured credit card. These cards function just like any other but require an up-front cash deposit (usually the same amount as your credit limit) which your provider can use if your bill goes unpaid. This not only protects you from debt but mitigates the risk on your bank's end, making it a win-win. The best part? Secured credit cards still report to credit bureaus, meaning you can practice responsible credit usage in a controlled way while still building your credit score for the future.

 

Also Read:

• Best no fee credit cards in Canada
• Best cash back credit cards in Canada
• The best credit cards for dining at restaurants in Canada