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Credit Card Applications » Questions » User Questions » Student Credit Cards » I just graduated from college in January 2012. I started a PhD program with a full ...

I just graduated from college in January 2012. I started a PhD program with a full scholarship in September 2012 with a stipend for living costs. In the summer I applied for a credit card from Capital One and told them I have never had a credit card or loan. They denied me due to limited credit. Then my bank, PNC, convinced me to get a secured credit where I give them my money and pay a monthly fee. I don’t want to pay any fee, but I do want to get a no-fee credit card with rewards. I just tried calling Citi to see if I would be eligible for their student card, but they tell me to just apply. Do you think I would qualify for a student credit card like the one offered by Citibank based on my info? Does getting denied by Capital One affect my credit or future applications? How long do I need to keep a secured credit card before it would improve my credit to apply for another credit card? How do I know the secured credit card is actually helping my credit?

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Leo Zhu

Every time you apply for a credit card you provide the issuer with personal information. Credit issuers always check this information before they decide whether to qualify you or not for a credit card. Also, issuers request your credit report to see you credit performance and estimate your creditworthiness. If you apply several times in a row for a credit card you may hurt your credit score and issuers may deny your credit card application for too many inquires. So let some time pass before you apply for a card again.

You should use a secured credit card for at least a year before you can replace it with an unsecured credit card. But to do this you should use your secured credit card wisely, (i.e. make on time regular payments and pay your balance in full every month.) Also, this credit performance will allow you to improve your credit score. In about six months of perfect credit behavior you will see your credit score go up. You will notice the first signs of credit improvement after two or three months of responsible credit card use.

As for student credit cards, you should consider Discover student credit cards (see second table with «Student Credit Cards»). Some of these cards have no annual fee and offer rewards (e.g. Discover® Student More Card – $20 Cashback Bonus).

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