Student Credit Cards in Canada

I recently got a question from one of the students in my Wealth Building Blueprint for Canadians course about student credit cards in Canada. Her son was just about to turn 18 and go off to university, and she wanted to know the best way to help him get his first credit card so he could start building credit. And so I thought I’d make a video all about it with an accompanying spreadsheet that compares all the different student credit cards in Canada currently available that you can download.

Why a Student Credit Card and Not a Regular Credit Card?

You may be wondering “Why would someone sign up for a student credit card? Why not just a regular credit card?” Well, if you’re a student, you likely have no or very low income and have no credit profile. Which means if you applied for a regular credit card, you’d likely get rejected.

With that said, let’s say you don’t have plans to go to post-secondary and instead want to start working right away. Since you won’t be eligible for a student credit card, instead you can apply for a secured credit card. These cards are meant for people with no or bad credit, to help them build their credit up. These types of cards typically require a deposit to access, such as $300-$500, and may require an annual or monthly fee. But they can be a great tool to help you build credit if you can’t get a student credit card.

What Won’t Help Build Your Credit Score

I also want to make clear that if you’ve got a supplemental credit card from one of your parents, meaning they opened up a credit card and then got you a supplemental card to use linked to their account, this does nothing to build your own credit. It might be good to help teach you good credit usage skills, but it doesn’t help with your own credit score since it’s linked to your parent’s credit profile.

Similarly, if you open up a prepaid credit card through a company like KOHO, NEO, or Wealthsimple, these won’t affect your credit and thus won’t help build your credit either. Though some of these prepaid cards now offer features to enable payments to be reported to the credit bureaus so you can build your credit with them, it’s usually followed by a monthly fee for this service.

Eligibility for Student Credit Cards

Back to student credit cards, here are some important things to know about them. In order for you to be eligible for a student credit card, you must:

• Be the age of majority in your province
• Be a Canadian citizen, permanent resident, or international student with a valid study permit
• Have a valid social insurance number
• Provide proof that you’re enrolled in a post-secondary institution
• Provide proof of income such as student loans, scholarships or grants, family allowance, or employment. Basically, you need to show proof that you will be able to pay back what you borrow. 

With that said, every credit card has its own particular eligibility requirements, so when you’re comparing cards, make sure to read those carefully before applying.

How to Apply for a Student Credit Card

For most student credit cards, you can apply for them online or over the phone, however some will require you to apply in-person at a bank branch. Specifically, if you’re an international student, most of them require you to go in-branch to apply.

How Much Credit You’ll Be Approved for

In terms of how much credit they will give you, it’s on a case-by-case basis, but in general it’s going to be a very low credit limit since you’re a student, so you’re looking at about $500-$1,000. 

But, over time, you may be able to request a credit limit increase, or after building up your credit score and being responsible with your credit card (like paying it in full, on time, every time), if you need more credit, you may even want to consider applying for a second student credit card. 

That’s what I did while I was a student. For the first two or three years of being a university student, I got a student credit card through my bank, then, since I was in film school and knew I had some big expenses coming my way such as film equipment I had to rent to complete my film projects, I applied for a second card.

But I should caution you not to apply for a second credit card too soon after getting your first one. Wait a bit until you can prove to the credit bureaus that you’re responsible with your credit card. Otherwise, if you apply for that second credit card too soon, you might get rejected.

Monitor Your Credit While You Build It

Another tip I’d suggest is signing up to a free credit scoring services so you can monitor your credit reports and scores with both credit bureaus in Canada (Equifax and Transunion). I’ve got a few videos about credit scores you should check out after this, but I’d suggest signing up through Borrowell for your Equifax report and score and Credit Karma for your Transunion report and score. I’ve signed up to them and have been using them for years, and no, checking your credit scores or reports through them does not impact your scores at all.

Other Ways to Build Your Credit

The last thing I want to share before diving into what kind of student credit cards are out there is that having a credit card isn’t the only way to build up your credit score. Another easy way to help build your credit is with your cell phone bill. Even if your parents still pay for your cell phone or internet, make sure those accounts are under your name as many telecom companies report accounts to Equifax and Transunion. For example, I had a cell phone plan with Virgin for 5 years and my payments were reported on my Equifax report. And because I never missed a payment, it helped increase my credit score over those 5 years. 

Another thing that may be reported to the bureaus is your rent. Previously, your rent payments were never reported, but now they can be in all provinces except Quebec. Landlords can report your payments to the Landlord Credit Bureau which will then go onto your Equifax report. If you’re not sure if your rent payments will be reported or not, talk with your landlord about this. If you know you’re going to make your payments on time every time, then this could really help you build your credit score so it might be a program you suggest to your landlord to sign up to.

Choosing a Student Credit Card

Now let’s get to the part you’ve probably been waiting for, choosing a student credit card. Now, to make things a bit easier for you, I’ve made a little spreadsheet of all the student credit cards in Canada I could find. Click here to download a copy. I go through it more in-depth in my video, so make sure to watch it.

Got any questions about student credit cards in Canada? Put them in the comments!