Secured vs Student Credit Cards : Which one to choose?

Credit card is regarded as the first step of the ladder to create a credit history for young adults. As you might feel it is challenging to get the first card because of the approval process. You might be feeling difficulty in making a comparison secured vs student credit cards because both are regarded as  the viable starter credit cards.

 As every person has their own unique financial situation so there is not one credit card that works best for all use cases.  Even lenders are hesitant to work with youngsters because there is less data available on how they will handle the accounts and credit cards responsibly.  So, here are some of the important factors to consider while you make the decision between secured vs student credit cards.

Secured vs Student Card – Key Takeaways

• Student and secure credit cards are easier to obtain as they have lenient terms and conditions than conventional cards. These cards are designed primarily for people with little to no credit history.
•  Both type of cards help you efficiently build credit history and score over a specific period of time
•  When making a comparison between secured vs student card, a secured credit card requires a refundable cash deposit as collateral but a student card doesn’t.
• The student card is primarily for those adults who have limited or no credit history while secured credit cards are for those individuals (either student or non-student ) with limited or bad credit.

When to choose a student card?

 Student credit cards are particularly for the college student who want to build their credit score for big purchases in the future. As with the help of college identity, the approval of the student card is relatively easy. Student cards offer low limits and rewards as mostly they  comes with no annual fee , so the rewards are lesser in number as compared to the other cards. Also , most of the student cards  come with the ability to check the FICO score, this gives you the ability to track the credit score.

Best Student Credit Cards of 2024

The best student card offers better rewards with limited credit score . If you are a college student grab one of the student card to build your credit score.

When to choose a secured credit card?

 Secured credit cards are for all those individuals wo need help in building or repairing the credit. These cards are not specifically targeted to students. When comparing the terms and conditions for , secured vs student credit cards, secured credit cards are usually marketed for people with low or bad credit score. As these cards require the deposit but the deposit in this case are refundable in case the account is closed or upgraded to another option. As secured cards report to the credit bureaus so you can build credit score in a passage of time.

Secured vs Student Credit Cards – Key Differences

 A student credit card is a type of the credit card that is tailored for the needs of the university and college students. These cards allow you to build the credit score over time. If you don’t have a good credit history you can give consideration to the student cards.

 While on the other hand , this card requires a cash deposit as a collateral . The deposit generally determine the credit limit . Secured credit cards are geared towards all the individuals who have no credit history.  With no credit history you can use the secured credit card to rebuild your credit . The deposited amount act as a safety for the issuer in case the creditor will not be able to pay back the money.

Feature	Student Credit Card	Secured Credit Card
Card eligibility	Must be at least 18 years old and a student at a qualified institution.	Must be at least 18 years old and have a Social Security number.
Credit card limit	Typically lower than a regular credit card, but can vary depending on the issuer.	Typically limited to the amount of the security deposit, but can increase over time as you make on-time payments.
Interest rate and fees	Interest rates can be high, but some student credit cards offer no annual fee.	Interest rates can also be high, and there may be an annual fee and other fees associated with the card.
Building credit	Student credit cards can help you build your credit history by reporting your payment history to the credit bureaus.	Secured credit cards can also help you build your credit history, but they may not be reported to all three credit bureaus.
Features	Some student credit cards offer rewards programs, such as cash back or travel rewards.	Secured credit cards typically do not offer rewards programs, but they may offer other features, such as credit monitoring or identity theft protection.

Secured vs Student Credit Cards- Eligibility requirements

 When making a comparison between secured vs student card, the eligibility requirement tends to differ for both of them. As the target demographic and intended purposes of the card differs so here a quick breakdown of the card requirements

 Student Credit Card Eligibility Requirements

 Apart from the general age requirement that should be 18+ here are the key points to tick mark to get the student card :

• As per the general rule student credit cards require proof of enrollment in a college or university. This could be in the form of a Student ID, or enrollment letter as per the separate requirement of each lender.
•  Some of credit card issuers may require proof of part-time jobs, internships, and other allowances. There is not as such requirement for high income proof but having income is necessary for most of the cases.
•  If the student does not fulfill the requirement to qualify for the credit card , some credit card issuers allow co-signer to take responsibility of the debt and other finances

Secured Credit card eligibility requirements

•  In case of secured credit card, you need to submit a security deposit. The security deposit generally acts as collateral and determines the credit card limit.
•  Although these credit cards are designed for those with poor credit, but most of the card issuer perform credit checks.
•  To gain access of the secured card , you need proof of stable income that should not be lower than a certain limit set by the credit card issuer.
•  Some of the secured card issuer requires the cardholder to  have a bank account.

 In brief, both of the cards are design to increase the accessibility for the users to have a card in their wallet. Student cards are more focused on the potential earnings of the student and secured credit card is more dependent on the collateral.

Secured vs Student Credit Cards – Interest rates and fees

 As both of the cards are the entry level cards so both of them comes with their unique terms and conditions.

 Interest rates and fees on Student Card

•  Student credit cards often come high APR in comparison to the other cards. As students have low credit history so its difficult to gain the trust of the credit card issuer.
•  Most of the student cards comes with no annual fees
•  Most of the student charge late payment fee , while on request some if the credit card issuer might waive this fee.
•  Most of the student cards charges foreign transaction fee . But if you are the one studying abroad and looking for no-foreign transaction fee credit card then there are few options in it as well.
•  The balance transfer fee on student card is dependent on the merchant and students should be aware of it beforehand.

Interest rates and fees on Secured card

•  Secured cards usually charge a high APR, So they’re primarily for all those individuals who have good to excellent credit score
•  The annual fee of the secured card is dependent on the card you have opted for . There are plethora option for high annual fee credit cards and for low to no annual fee charges.
•  Most of the secured cards charge late payment fees . So when you own a secured credit card , it is important to make timely payments, otherwise it will impact your credit score.
•  The foreign transaction fee varies for different credit card issuers but many of them do charge this fee.
•  By using the secured credit card, you can easily set up monthly fees so that you won’t miss out any payments.

Frequently Asked Questions