A first credit card is an exciting and scary thing.
On the one hand, it’s a step forward in your financial life, a way to learn about responsibly using credit. On the other, it’s the quickest way to bury yourself in heavy debt if used recklessly.
That’s why Barry Choi, a personal-finance and credit-card expert at moneywehave.com, says it’s crucial for students to establish good credit-card habits. That means only spending within your means and always paying off your balance in full to avoid high interest fees.
Everyone should avoid carrying debt on a credit card, but students in particular, as they typically don’t have the income to dig themselves out of a hole.
There’s a dizzying array of credit cards to choose from, so The Globe and Mail spoke with three Canadian credit-card experts to suggest some of the best options for students.
Most students are young, without a detailed credit history, and don’t make much money, which limits the kinds of cards they’re eligible for. The good news is there are still lots of cards that come with great rewards programs or cash-back benefits.
Below, we’ve compiled four of the best credit cards for students, all with no fees.
And remember: You don’t need to have an account with a bank to get one of its cards.
Cash-back cards
Tangerine Money-Back Mastercard
This isn’t specifically a student credit card, but Tangerine’s qualification requirements for this card are simple enough that most students with a job should be eligible, as you only need to have a yearly income of $12,000.
This card offers some of the best and most flexible cash-back benefits, with users getting 2 per cent cash back on two spending categories of their choice. Options include groceries, restaurants and more. If you have your cash-back rewards deposited into a Tangerine savings account, you also get a third category with a 2-per-cent cash-back rate.
You’ll earn 0.5 per cent on all other expenses.
BMO Student CashBack Mastercard
This cash-back card offers 3 per cent cash back on grocery purchases, which Shannon Terrell, a personal-finance expert with NerdWallet, describes as a very generous rate for any cash-back card. Students will also earn 1 per cent on recurring bills and 0.5 per cent on all other expenses.
If you expect to use your credit card for groceries in particular, or if you don’t qualify for the Tangerine card, Mr. Choi says this is one of the best cash-back cards for students.
Rewards cards
CIBC Aeroplan Visa Card for Students
Rewards programs are a fickle business. Some programs, such as Air Miles, have been ratcheting back the value of their points in recent years.
Aeroplan has been seen as one of the strongest travel-rewards memberships in recent years. And this CIBC card is the only no-fee Aeroplan card geared to students, Mr. Choi said.
“It’s nice to be able to start building points if you have travel aspirations,” he said.
The current welcome bonus gets you 10,000 points when you make your first purchase, enough for a one-way short-haul flight in North America, such as Montreal to Toronto or Toronto to New York.
Cardholders will also get one Aeroplan point for every dollar spent on gas, groceries and any purchases with Air Canada. And they’ll get one point for every $1.50 spent on everything else.
As a CIBC client, you’re also eligible for a free Student Price Card membership, which gets you discounts at hundreds of brands.
Scotiabank Scene+ Card for Students
If travel isn’t a top priority for you, Patrick Sojka of rewardscanada.ca says Scotiabank’s Scene+ rewards program is one of the strongest and most versatile in the country.
“In some ways it’s underacknowledged, with people not knowing they grew beyond just being a movie program,” Mr. Sojka said.
He said Scene+ points are generally valued at around one cent per point, and you can redeem them for movies, groceries, travel benefits and other rewards.
“It leaves your reward options open – that’s why I love it.”
Cardholders will get two points per dollar spent at Empire Co. Ltd. grocery stores (Safeway, IGA, Sobeys, FreshCo etc.), Home Hardware and Cineplex theatres. They’ll get one point per dollar spent on all other eligible expenses.
