The transition from high school graduate to college or university freshman is a big leap.
From living away from home for the first time to learning how to navigate the ins and outs of campus life, wading through the complexities of getting a first credit card can quickly fall off the priority list for many students. And while some students may choose not to apply for a credit card at all, others may be swayed into a particular card by a sales representative on campus promising freebies like a complimentary t-shirt. Neither of these is the best courses of action to take, as students should understand the benefits of using credit cards and compare all their options instead of being “sold” on a single card. Credit cards are a fantastic way for students to begin building their credit early, laying the groundwork to be approved for mortgages and personal loans down the road.
Below, we shed light on the benefits of student credit cards and provide a breakdown of the best student credit cards in Canada for 2022.
The 6 best student credit cards in Canada for 2022
- 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
Best student credit card for cash back
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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)
Best student credit card for Air Miles
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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
Best student credit card for groceries
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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
Best student credit card for travel
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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 earn a $50 value in TD Rewards Points to use at Amazon.ca with Shop with Points. Plus, you can get a 9.99% promotional interest rate on purchases for the first six months with no annual fee. Must apply by October 29, 2022.
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 3 points (1.5% in travel rewards) per dollar on travel you book online from the ExpediaforTD website, 2 points (1%) per dollar on groceries, restaurants and fast food, and 1 point (0.5 cents) 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 ExpediaforTD 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 ExpediaforTD 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: earn $50 worth of TD Rewards points to use at Amazon.ca for Shop with Points, plus a 9.99% promotional interest rate for the first six months. Offer ends October 29, 2022.
- Earn 3x the points when booking travel on ExpediaforTD.com, 2x the points on groceries, restaurants and fast food
- Can redeem points for virtually any travel-related expense on ExpediaforTD.com - perfect for students who regularly travel home from school
- Easy points system: one point always equals 0.5 cents when used at ExpediaforTD, 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
Best student credit card for bad credit
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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
Best student credit card for entertainment
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If you and your friends are the type to spend a Saturday night seeing a double-bill at your local cinema, the Scotiabank Scene Visa is worth checking out.
The card offers five Scene+ points for every dollar spent at Cineplex theatres or at cineplex.com, and one point per dollar on all other purchases. Plus, while you can spend your Scene+ points on future trips to the cinema, you certainly don't have to - the card's flexible redemption model allows you to redeem your rewards for dining, travel, banking and more. Plus, new users can earn 7500 bonus Scene+ points within their first year.
The card's no annual fee means that you're not stuck paying for it every year even if your moviegoing habits take a backseat. Plus, you can add users to your account with their own cards at no additional cost. You'll also be able to save up to 25% off base rates at participating AVIS locations and at participating Budget locations in Canada and the U.S. when you pay with your SCENE Visa card.
Pros:
- No annual fee - the card won’t cost you anything, even if your theatre visits slow down
- Five Scene+ points per dollar at Cineplex theatres or at cineplex.com
- Flexible redemption: users can spend their points on movies, but also dining, travel, banking and more
- No cost for additional users, letting you rack up points faster
- Save up to 25% off car rentals at participating AVIS and Budget locations
Cons:
- Base rate of 1% for everything else isn’t very competitive - lots of other cards offer accelerated points for entertainment (including movies), plus better earn rates in other spending categories
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.
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.
Visit our student personal finance guide.
Financial literacy early in life will pay dividends in your future. Learn more with Ratehub's guide to managing your money as a student.