As a young adult and student who writes about credit cards and talks about them nonstop, I often get many questions about their significance and value from my peers. Typically, I first explain the lasting benefits of building credit. Signing up for your first credit card at a young age allows you to establish your credit history early, giving it more years to mature.
The length of credit history makes up 15% of your FICO score, a pretty significant portion that can be easily strengthened by establishing credit early in life. And if you later apply for a loan or mortgage, you will likely benefit from a higher credit score from having a longer credit history.
I am often asked, “What is the best card to sign-up for?” For college-aged students, my reply is usually the Capital One SavorOne Student Cash Rewards Credit Card. While this card frequently flies under the radar for students compared to the Discover it Student Cash Back and Chase Freedom Student credit card, here is why I recommend the student version of the classic Capital One Savor Cash Rewards Credit Card.
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The information for the Discover it Student Cash Back and Capital One Savor cards has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
Great everyday spending rewards categories
Compared to the lack of rewards offered by debit cards, students are often thrilled to get 1% back on their purchases with a credit card. While I always advise trying to get at least 2% back on purchases — which is easily achievable with cards like the Citi® Double Cash (1% when you make a purchase and another 1% when you pay it off) — some people with limited credit histories may not be approved for a card with a higher earning rate.
Comparatively, the SavorOne Student card offers unlimited 3% cash back on dining, groceries, entertainment and streaming services, which is almost unheard of for student credit cards and is better than many non-student cards. As a student, I know that most of my budget goes toward restaurants and activities, which perfectly match these categories. Additionally, the card offers 1% back on purchases that do not fall under these categories.
Dining includes everything from fancy restaurants to the fast food drive-through at midnight. Additionally, entertainment includes everything from football games and other event tickets to playing a round of golf. Add on grocery store purchases and streaming services and I can imagine that many students with this card would earn 3% back on the majority of their day-to-day spending.
Related: Credit vs. debit cards: Which is the smarter choice?
Easy sign-up bonus
The TPG community loves a good sign-up bonus, especially thousands of points with one new card. However, these sign-up bonuses can be out of reach for many students since they sometimes require $5,000 or more in spending within three months.
The bonus for the SavorOne Student card is much more attainable. There is a limited-time offer to earn a $100 cash bonus after spending $100 on purchases within three months of account opening.
Not only should it be easy to hit a $100 threshold within three months for a student, but the bonus will completely wipe out the $100 in spending. For a student, earning $100 is an easy sign-up bonus that will pay for multiple runs to Chipotle or cover some Amazon orders.
Related: Credit card sign-up bonuses you can earn with $1,000 or less in spending
The last thing a student wants to worry about with expensive tuition and a tight budget is paying an annual fee. Luckily, the SavorOne Student has no annual fee, making it easy to continue earning rewards without any yearly fee.
Additionally, there are no foreign transaction fees on the card. This means that when studying abroad in Europe or on spring break in Mexico, you will not need to worry about fees being added to every purchase you make.
No foreign transaction fees are a great and less common benefit among credit cards with no annual fees, let alone on a card for individuals with less credit history. This should not be ignored.
Related: What is a foreign transaction fee?
Some credit cards make it difficult to redeem their rewards, but this is not the case for the SavorOne Student card. For starters, rewards do not expire for the life of the account. Rewards can be redeemed for cash, used directly against your balance to reimburse a recent purchase from your bill or redeemed for travel using the Capital One travel portal.
Down the road, once a longer credit history has been established, and one has a higher credit score, adding another Capital One credit card, such as the Capital One Venture Rewards Credit Card or Capital One VentureOne Rewards Credit Card, would allow students to convert their cash-back rewards to miles.
These miles can then be transferred to one of the card’s many airline or hotel partners to book travel. This method may require more effort, but it can increase the value of the rewards as TPG values Capital One miles at 1.85 cents compared to the 1-cent cash back on the SavorOne Student card.
Related: Tips and tricks to get maximum value from your Capital One miles
Capital One SavorOne Student Cash Rewards Credit Card is an excellent all-around card. It has great bonus categories that will perfectly match many students’ spending habits and rival non-student cards for individuals with a more developed credit score.
In addition to no annual and foreign exchange fees and an easy-to-earn sign-up bonus, this card comes with some of the typical benefits you may not find on debit cards. This includes $0 fraud liability, extended warranty and travel accident insurance.
In order to start building credit, I always advise students to sign up for their first card as early as possible (after making sure they know how to handle a credit card responsibly), and my pick for their first card is the SavorOne Student card.