Last Updated on November 2, 2025 by Amrita Das
Starting your journey to establish credit as a student can be a daunting task. You need a credit card to build your credit history, but most cards require good credit to get approved, creating a frustrating situation. That’s where secured and unsecured credit cards designed for students come in.
Both types of cards can help you establish credit, but they work differently and serve different needs. Understanding these differences will help you choose the right card to launch your financial future on solid ground.
A secured credit card requires you to put down a cash deposit that typically becomes your credit limit, while an unsecured card doesn’t require any upfront money. Student credit cards are usually unsecured cards with more lenient approval requirements specifically designed for college students.
Let’s explore how these cards work, their benefits and drawbacks, and which option makes the most sense for your situation.
Read More: Best Student Credit Cards with No Annual Fee
What Are Secured Credit Cards?
Secured credit cards require you to make a cash deposit upfront, which serves as collateral for the card issuer. This deposit typically equals your credit limit, though some issuers may offer a slightly higher limit than your deposit amount.
For example, if you deposit $300, your credit limit will usually be $300. Most secured cards require minimum deposits between $200 and $500, though some allow deposits up to $2,500 or more.
The security deposit protects the card issuer if you fail to make payments. However, this isn’t a prepaid card—you still need to make monthly payments on any balance you carry, and you’ll pay interest if you don’t pay in full each month.
How Secured Cards Build Credit
Despite requiring a deposit, secured cards function like traditional credit cards in terms of credit building. Card issuers report your payment activity to the three major credit bureaus (Experian, Equifax, and TransUnion), which means your responsible use helps establish and improve your credit score.
Many secured cardholders can upgrade to unsecured cards after demonstrating responsible use for several months. When this happens, you get your deposit back while keeping the same account, preserving your credit history length.
What Are Unsecured Credit Cards for Students?
Student credit cards are unsecured cards specifically designed for college students. They don’t require a security deposit and typically have more relaxed approval requirements than regular unsecured cards.
To qualify for a student card, you’ll need to provide proof of enrollment at a qualifying educational institution. You’ll also need to demonstrate some form of income, which can include part-time job earnings, financial aid, scholarships, or regular financial support from family members.
Benefits Tailored for Students
Student credit cards often include features specifically helpful for college life:
- Educational resources about credit management and financial literacy
- Reward categories that align with student spending, such as dining and online purchases
- Lower credit limits to help prevent overspending
- Potential for credit limit increases as you demonstrate responsible use and your income grows
Comparing Secured and Unsecured Student Cards
Understanding the key differences between these card types will help you determine which option fits your needs and financial situation.
Approval Requirements
Secured cards are easier to get approved for because the deposit minimizes the issuer’s risk. Many secured cards don’t require a credit score at all—some issuers will approve applicants with no credit history or even poor credit.
Student unsecured cards have more lenient requirements than regular unsecured cards, but you still need to meet certain criteria. You must be enrolled in school and show proof of income or ability to pay.
Some student cards may require a thin credit file or a co-signer if you’re under 21 and don’t have sufficient independent income.
Credit Limits and Deposits
Secured cards offer credit limits equal to your deposit amount. This means you control your initial credit limit, but you need cash upfront. Starting limits typically range from $200 to $2,500 or more, depending on the provider.
Student cards don’t require a deposit, but your initial credit limit depends on your income and creditworthiness. Limits often start between $500 and $2,000, though they can be lower for first-time cardholders.
Interest Rates and Fees
Both card types typically carry higher interest rates than premium cards because they’re designed for people with limited credit history. However, this shouldn’t matter if you pay your balance in full each month.
Secured cards often have APRs ranging from 20% to 27%. Some charge annual fees, application fees, or monthly maintenance fees, so read the terms carefully.
Student cards usually have similar APR ranges but may offer slightly better terms. Many student cards charge no annual fee, making them more affordable for budget-conscious students.
Rewards and Benefits
Secured cards traditionally offered few rewards, but this has changed. Some secured cards now offer cash back on purchases, though reward rates are typically modest (around 1-2% in select categories).
Student cards often provide more attractive rewards programs, including cash back on dining, entertainment, and online purchases. Some offer rotating quarterly categories or flat-rate cash back on all purchases.
Which Card Type Is Right for You?
The best choice depends on your current financial situation, credit history, and personal preferences.
Choose a Secured Card If:
- You have cash available for a deposit and want to ensure approval
- You have no credit history or previous credit problems
- You’re not currently enrolled in school or don’t meet student card requirements
- You want to control your credit limit by determining your deposit amount
- You’ve been denied for student cards and need an alternative path to building credit
Choose a Student Card If:
- You’re currently enrolled in college and can provide proof of enrollment
- You have some form of regular income or financial support
- You prefer not to tie up cash in a security deposit
- You want access to student-specific benefits and resources
- You’re interested in earning rewards on your spending
Read More: Credit Cards For International Students Without SSN(Step-by-Step)
Difference Between Secured and Unsecured Credit Cards for Students: Bottom Line
The most important step is to start building your credit history as soon as possible. Whether you choose a secured card, an unsecured card, or another option, responsible use will help you establish the strong credit foundation you’ll need for future financial goals like renting an apartment, buying a car, or purchasing a home.
Take time to research specific cards, compare their terms and benefits, and choose the option that best fits your current situation. Your future self will thank you for taking this important step toward financial independence.
