Why College Students Shouldn’t Pause Building Credit During COVID-19

college students, building credit, COVID-19

Don’t let the COVID19 pandemic disrupt your financial plans! Find out why it’s essential for college students to keep building credit during these uncertain times. This blog post explains how building credit now can set you up for a secure financial future, even in the midst of a pandemic. Discover the reasons why you shouldn’t put a pause on building credit and take charge of your financial well-being today.

Discover why it’s crucial for college students to continue building credit during the COVID-19 pandemic. Building credit now paves the way for a secure financial future, and this blog post explains why it’s important to take this step even during these uncertain times.

The world may be at a standstill in many aspects with stay-at-home orders putting a pause on (or altogether canceling) events like graduation ceremonies, but you can still make building your credit a priority in quarantine.

Though a recent report out of the Consumer Financial Protection Bureau (CFPB) found a 40 percent decrease in new card applications when comparing the first and last week of March 2020 (which the CFPB assumes is in part due to rumblings of issuers raising credit card approval standards), student credit cards are still some of the easiest cards to get.

When building credit in college with a student credit card, there are a few things to consider. Here’s why building credit now is an important step toward future financial health, including tips to keep in mind for using your card responsibly.

The importance of building credit (and how cards help)

The three-digit number that signifies your reliability to borrow money and pay it back — also known as a credit score — dictates a lot of the financial products you will or wont be approved for (think: credit cards, mortgages and car loans), how much money you can borrow, the interest rate you receive and more.

Though you may have already started to build credit through student loans, owning a credit card and using it responsibly can further boost your credit score. Typically, your credit card issuer will report your usage information to each of the three credit bureaus (Experian, Equifax and TransUnion) at the end of each billing cycle. This includes information on your payment history, credit card balance, credit limit and more. With time, positive reporting can lead to an improved credit score.

Even if you only expect to make a handful of purchases or payments each month, a student card can be worthwhile in improving your score or jumpstarting your credit-building journey.

Tips for responsible credit card usage

Spend within your means

This goes without saying, but one of the most important rules of credit card usage is to never spend beyond your means (if you can help it).

While following a budget to keep yourself from overspending is key to avoiding credit card debt down the road, its also important to consider your credit utilization ratio (which makes up 30 percent of your overall credit score).

As a rule of thumb, you shouldnt spend more than 30 percent of your available credit. If your credit limit is $5,000, for example, you should avoid spending more than $1,500 per billing cycle to keep a healthy credit utilization ratio and score.

Pay your bill on time (and in full)

Spending within your means also ensures that youre able to pay your credit card bills each month, therefore avoiding debt and tacked-on interest.

Setting up automatic payments or account reminders via email or text is one way to make certain you wont miss a bill. Some cards even offer a one-time late fee waiver for your first late payment, which can act as a fallback if you forget to pay.

If you simply cant afford to pay your bill in full one month, at least commit to making your cards minimum payment. Doing so may incur interest, but you wont be subject to late fees.

Review your credit report once a month

There are plenty of ways to view your credit score for free. Under the Fair Credit Reporting Act (FCRA), you can request a free copy of your credit report from each of the three credit bureaus once a year. Yet in the wake of the coronavirus pandemic, you can now request a free report each week through April 2021.

Staying up-to-date on your credit score is even easier. Depending on the credit card you own, you may be able to view your score, any recent changes and factors affecting it within your cards mobile app. The Journey Student Rewards from Capital One, for example, offers unlimited access to your credit score and credit monitoring tools via CreditWise from Capital One®.

Now that you have an idea of how credit cards can help you build credit and ways in which you can use a card responsibly, heres a breakdown of some of the best student credit cards available.

Bankrates picks for top student credit cards

  • Build healthy card habits: Petal® 2 Cash Back, No Fees Visa® Credit Card
  • Enjoy a variety of perks: Deserve® Edu Mastercard for Students
  • Earn solid cash back rewards: Discover it® Student Cash Back

Petal® 2 Cash Back, No Fees Visa® Credit Card


  • 1 percent cash back on eligible purchases as a new cardmember
  • 25 percent after six on-time monthly payments
  • 5 percent after 12 on-time monthly payments

Annual fee: $0

Editors take: The Petal 2 Visa isnt specifically marketed as a student credit card, but that doesnt mean it isnt a great option for students. This no annual fee card offers a cash back rewards structure that increases as you practice responsible credit card usage (i.e., pay your bill on time each month).

You start off with 1 percent cash back on eligible purchases, and after making six on-time monthly payments, you receive 1.25 percent cash back (up to a maximum of 1.5 percent cash back after making 12 on-time monthly payments).

Within the Petal 2 app, you can find additional healthy habit-promoting features like budgeting tools, credit score tracking and a cash back status module that informs you how close you are to achieving a higher rewards tier.

The card also abides by a no fee policy, meaning you wont be charged late fees or foreign transaction fees.

Deserve® Edu Mastercard for Students


  • Unlimited 1 percent cash back on all purchases

Annual fee: $0

Editors take: While the Deserve Edu Mastercard doesnt offer a traditional welcome bonus, it has plenty of perks that help make up for it.

The no annual fee card, which earns you an unlimited 1 percent cash back on every purchase, comes with one year of Amazon Prime Student (after spending $500 in the first three billing cycles). Once you purchase Prime Student with the card, Deserve will reimburse you depending on how you paid ($6.49 per month or a one-time $59 annual payment). Its recommended that you select the annual subscription as the month-to-month plan exceeds the maximum amount covered by Deserve ($59).

Other benefits include cell phone protection of up to $600 when you pay your bill with the card and Deserves Refer A Friend Program. Using a personal referral code, you can earn unlimited $30 referral bonuses after your friends card has been activated.

If youre an international college student, the Deserve Edu Mastercard is one of your best bets for building credit — no social security number is required to apply for the card.

Discover it® Student Cash Back


  • 5 percent cash back in rotating categories on up to $1,500 in purchases each quarter, then 1 percent (activation required)
  • Unlimited 1 percent cash back on everything else

Annual fee: $0

Editors take: The Discover it Student Cash Back is a great warm-up for whats to come when you eventually upgrade to another Discover card (such as the Discover it® Cash Back) or apply for a new card entirely.

This student card offers the chance to track rotating bonus categories each quarter and even follows the same cash back calendar as other Discover cards. For April through June of 2020, youll earn cash back rewards at gas stations, Uber, Lyft and wholesale clubs. (Though rideshare services arent a particularly helpful category given the current climate, purchases with Uber Eats also counts toward rewards). The rest of the 2020 cash back calendar is as follows:

  • July through September 2020: Restaurants and PayPal
  • October through December 2020: Amazon.com, Walmart.com and Target.com

If you were to ever spend more than the quarterly maximum, youll still earn 1 percent cash back on all purchases thereafter until the cash back calendar resets the following quarter.

Lastly, one of the most (quite literally) rewarding features of the Discover it Student Cash Back is Cashback Match; at the end of your first year of card ownership, Discover will match all the cash back rewards youve earned. That means if you accumulated $150 in cash back for the year, your earnings double to $300 in cash back.

Editorial disclosure: All reviews are prepared by Bankrate.com staff. Opinions expressed therein are solely those of the reviewer and have not been reviewed or approved by any advertiser. The information, including card rates and fees, presented in the review is accurate as of the date of the review. Check the data at the top of this page and the banks website for the most current information.

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