Denied For A Credit Card As A College Student?

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A reader emailed me the following question:

I am a college student and I was looking to open my first credit card today. I applied for the Chase Freedom Unlimited Card but was instantly rejected. I had called Chase before applying to make sure that my lack of real income (minus my paid summer internship) was not an issue and they said it was not and that college kids frequently get approved for the card. Additionally, it is listed as one of the best cards for college students. I’m wondering if you might have any guesses as to why I was rejected?

Also, as I am still looking to open up a card, I was wondering how long you think I should wait before applying for another card?

Getting approved for your first credit card (or first few credit cards) can be challenging, especially if you’re a college student. In my head I always feel like it was just yesterday that I applied for my first credit card while still in college, but then I realize that was over a decade ago… time flies!

So, what should this reader have done differently, and what’s his best course of action from here?

Chase cards can be tough to get approved for

Of course this is all going off anecdotal evidence, since issuers don’t directly publish how difficult it is to be approved for a card, other than saying you need “average” or “excellent” credit, for example.

The three biggest card issuers are Amex, Chase, and Citi, and as a general rule of thumb I find Amex cards easiest to be approved for, followed by Citi cards, followed by Chase cards.

Maybe some have different experiences, and of course it very much depends on your specific situation. But I do generally find this to be true. The Chase Freedom Unlimited is a great card, but it’s not a card specifically for college students, and certainly isn’t the first card I’d get if trying to build credit, given that it can be tough to get approved for (as you found out).

So, what’s the best way to get started in your credit card journey as a college student?

Step 1: Apply for a student credit card

I know most people are hoping to acquire amazing cards like the Citi Premier℠ CardChase Sapphire Preferred® Card, etc., but the reality is that this isn’t the best place to start.

First you have to build your credit and show that you’re credit worthy, and the way to do that is to first get a student credit card. There are many options out there, and frankly it doesn’t even matter much which you apply for.

You’re not getting this for the great rewards, but rather because it’s a good investment in your future ability to get credit cards.

Two cards I often recommend are the Citi ThankYou® Preferred Card for College Students and Journey® Student Credit Card from Capital One®. Both cards offer modest rewards, but the point is that they have no annual fee, and hopefully spending money responsibly on one of these for six months or so will improve your credit.

By “spend money responsibly” I mean making purchases on the card every billing cycle, not utilizing too much of your credit (stay under 30%), and paying off your card on time.

Step 2: Apply for an Amex credit card

Take my word on this. As mentioned above, Amex cards are anecdotally among the easiest “regular” cards to be approved for, assuming you have excellent credit.

So I recommend the next step of the strategy is to apply for a personal American Express card. It doesn’t particularly matter which one, but the point is that you get a card that you actually find rewarding that you can spend money on.

That’s because Amex cards are going to be easier to get approved for than most Chase or Citi cards, so this is an opportunity to get a card you want while continuing to build your credit.

As of now, some good options include the following:

American Express cards to consider

I’d recommend then using an Amex credit card for several months to continue to develop good credit.

Step 3: Check your credit score

At that point I’d recommend checking your credit score and seeing what it looks like. There are plenty of free services out there for checking your credit scores.

Before you even consider applying for more cards, make sure your score is at least 720, and ideally even a bit higher. That’s not the only metric that matters, but it’s good to confirm that there’s nothing inaccurate on your credit score.

Step 4: Apply for a Chase or Citi card

After using a college credit card for several months, and then using an Amex credit card for several months, and then checking your credit score, hopefully you’re ready for the big leagues. At this point consider applying for one of the premium cards you’ve been wanting, whether it’s the Chase Sapphire Preferred® CardChase Sapphire Reserve® Card, or Citi Premier℠ Card.

If you get approved, maybe try to get a couple of cards, but then take it easy and for the next year or so don’t apply for too many new cards, since your score is still pretty “fragile.”

In the event that you do get denied, don’t panic. It’s not the end of the world. Keep using your existing cards responsibly for a few months to continue building good credit, and then try again.

Bottom line

It can be tough to get approved for some of the mainstream travel rewards cards if you’re a college student with limited income and limited credit history. So while there’s no “one size fits all” strategy, what I’d recommend if you’re denied for a card is to first pick up a card specifically for college students, use it responsibly for several months, then pick up an Amex card, use it responsibly for several months, and then apply for a Chase and/or Citi card.

To college students (or recent college students) — what has your experience been getting approved for cards?

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Comments

  1. Discover is pretty good for approving students too – although they’ve axed just about all of the benefits.

  2. good tips. in my case, my checking/savings account had a $500 overdraft account tied to it which i didnt realize until a few years after opening it that it was actually a credit line. every time i swiped my debit card and didnt have enough money in my checking account, there was an overdraft charge that pulled money from the overdraft account ($100) to pay the balance. i freaked out because i was getting charged interest from using this overdraft account (it was only a few dollars but as a college kid freaked me out), so id pay off the whole balance completely every time it happened. i cant remember if my dad had to cosign on it or not but either way it was a good introduction to not only establishing credit but being responsible about loan payments.

  3. If possible, have your parents add you as an authorized user to their card with highest credit limit and lowest utilization. I did this for my Daughter Freshman year (but kept the card in a drawer) and she was approved for the Citi DoubleCash as a Junior with a credit score of 730.

  4. I recall signing up for Amex’s Delta credit card when I was in college. I only had a student job at the time (you know the type, hourly, part time, etc) but I was renting an apartment in college (which my parents helped me pay the rent on) and paying its rent and bills on time. Amex approved me pretty fast and gave me a ridiculously high credit limit for what my income was at the time. So yes, it seems like Amex is a good bet to start out with.

    And as Joachim suggests, having your parents add you as an authorized user is also an option.

  5. If you truly have zero income, I’d definitely recommend getting a credit record as an authorized user or a purpose-designed student credit product. If you have income, just very low income, capital one is hands-down the easiest. I have never known anyone who was rejected by capone.

    Just to emphasize, if it is your very first credit card, you must apply for a product designed for people with no credit, because you will have no credit record — this is only created after you have been given a credit product (or, ironically, rejected), and “normal” cards will auto-reject if the application cannot match with a credit record.

  6. I find it funny that when it comes to little or no credit history, advises are all over the place.
    I have to give @Lucky a lot of credit here as he did give it spot on. The ‘it helps’ are all USELESS ADVICE, as there are too many factors to rely just on ‘it helps’. @Lucky is giving out the sure thing route. If you can’t get it to work from his advice, you need to get a secured card. (Discover is also among the easier, but definitely start with CapOne)

    The next best thing is being an authorized user of an AMEX card. Just make sure the primary card doesn’t screw up payments. (It hit strong both ways)

    And be prepared to maneuver $500-1000 credit line for a while. (under 30% utilization and credit score is the key)

  7. @Lucky. Per your recommendation my 22 year old college graduate son applied for the American Express Delta Gold card, and got instantly approved with 14k credit. This is his first card. He has been an authorized card user on several of our accounts for at least 6 years now, and has a FICO score of 780 (because of being an authorized user, that I believe).

  8. I used my income from my student employment and my college scholarships and was approved for the Alaska Airlines card immediately. However, it’d be good to apply for a student card if you don’t have any credit history.

  9. Back in undergrad, I applied for a UA college credit card and got rejected for “insufficient credit history.” -_- At the time, I was thinking, “well, no [email protected]%t! That’s why I applied for a college card!” What’s the point of a college cc if you’re not going to approve/issue them to full time university students?

  10. When I was a Freshman in college I walked into my local Bank of America and asked the Bank Manager if I could get a credit card. She filled out a form for me and I got my first credit card with a $100 credit limit :). I did have a savings account there with around $1,000 in it. Not long after that, I got an offer through the mail for a credit card with a $300 limit. I got that card too. Then I got an offer in the mail for a credit card with a $1,000 limit even though I did not have a job yet (other than my parttime campus job).

  11. As a current college student, I can tell you that about 90% of students I see using credit cards are either the Discover It card or Capital One Quicksilver One. My first card was the Discover It card, which I applied for before I started college. Since then, I’ve been able to apply for a new card about every 6 months without it hurting my credit score and I’ve never been rejected. I recommend this strategy for students. Personally, wouldn’t recommend getting an Amex first since a lot of college campuses and surrounding small business/restaurants don’t accept them. Discover is widely accepted around campuses though since a lot of the businesses know that most students have a Discover card.

  12. In 1985 as an intern in Internal Medicine was denied for multiple credit cards for not having a prior work history and of course no prior income.
    Only card to approve was AMEX which I still carry.
    What a bunch of morons the others were

  13. My first card was a Visa through my credit union where I had savings and checking accounts for years. Many colleges also have some sort of credit union or bank affiliation which may be another route to go. My second card was a Discover as others have noted.

  14. I’ve been working for a year , have a steady income, and was rejected by Chase freedom. Ive had a savings acct with them for six years. discover card accepted me

  15. I recently started college. Huge fan of yours Ben and you’ve already helped me plan points vacations for my fam and guide them to what cards they should get. Now it’s my turn finally.

    Mt first recommendation to any teenager/young adult whether in high school or college is to become an authorized user on your parents’ credit card(s). You get to start building your credit score without doing anything difficult. That alone got me to a 705 score.

    The first credit card I would recommend applying for is the Bank of America Cash Rewards Student Card as it offers the best sign up bonus for a student card I’ve seen, $200 back after spending $500, which should be attainable for most students. In fact, the sign up bonus is as big as the one for the regular version of this card. Don’t use the card beyond that bonus though, except once in a while to keep it active. It’s really not great for everyday.

    This is where I am currently. I plan on applying for the Delta Amex Blue card next, again a card that requires just $500 spend to get 10k miles. For me it makes sense as I already have some Delta miles from flying them. For someone else, I would recommend finding other “non-student” cards that have low required spending amounts to reach a bonus.

    I don’t think I could currently hit any >$1k spend cards without paying for online purchases my parents make and then having them reimburse me, but I might just do that as the bonuses are worth the hassle.

  16. what do you mean by 30% utilization of credit? If I have a limit of 50K, cant I spend 50k every month if im a big spender? im confused

  17. My first credit card was an AMEX Blue card for a free T shirt AND candy bar. 18 years later, i still have the card and love it because my MRs from premium cards are all linked and i can cancel my Premium cards and my MRs are still valid. (but not all redemption partners can be used) Man that was a good candy bar! I wish i still had the T shirt,

  18. I applied for the Citi ThankYou Preferred College during freshman year back in 2016. Must have been August or September when I applied for it. Next, I applied for the AmEx Everyday Basic just a few months later in December and was approved for that as well. Since then I’ve also gotten the SPG AmEx (March ’17), the AmEx PRG (March ’18), the Chase Sapphire Preferred (June ’18) and the Chase British Airways card (August ’18) and have never had a problem being approved for any of those. I’ve also been an authorized user on a parents Citi Premier for maybe about three years.

    For context, I’m 20 years old, my income falls in between about $15,000-$20,000 a year (full-time over breaks, part-time during the school year) and my credit scores generally hover around 750 (It’s a little lower now because of my recent string of applications).

  19. Just graduated… but when I was in college, I got 15+ credit cards.
    1. Have your parents add you on theirs.
    2. Get loans when you are young and have parents co-sign (like for a car)
    3. Lie about your income or consider creative sources. Like if you have a student loan, that’s income, so you can claim many thousands more than you make.
    4. Have your parents, friends, etc. expenses reimbursed and offer to pay
    5. Join a Greek letter society and use your card for all reimbursable expenses.
    6. Start with an Amex and/or an airline cobrand. Do not waste a good application on a shitty card. It’ll matter for 5/24 (48?) very soon when you start consulting and all your friends have the CSR but you can’t bc you were an idiot.
    7. Thank me later.

    Doing the above, I met some big minimum spends and banked around 800k miles in 3 years. And I never had real income. It’s doable and the trips you take will be worth it.

  20. Don’t panic. I got denied right off the bat too. Keep reading the blog and get stoked, but be patient and start small. I definitely recommend co-signing with either of your parents on a crappy card from your local bank if possible. That way you can avoid the super low limit and keep your utilization low. I diligently used that for a year then got approved for a Sapphire Preferred on my own. Putting your utilities in your name (instead of your roommate’s) also helps. Four years later and now I have four cards with Chase: Reserve, Freedom Unlimited, MileagePlus, and Marriott, and still nothing but student loans for actual income.

    But just wait until you put those professional school tuition bills on there and pay it off immediately with your loans. I’m taking a friend to Europe with me for Fall Break! Here’s to a university with no credit card fee!

  21. I also feel obligated to state the obvious: don’t spend more than you can afford. Ben makes everything sound amazing (and it is…) but don’t accidentally wreck your credit score (or your parent’s) because you can’t quiiiiiiiite make that month’s payment when you’re going for a sign-up bonus. I have some classmates who choose not to keep more than $150 in their debit card account because they know they spend plastic money like monopoly money. But if you were like that you probably wouldn’t be here 🙂

  22. Somewhere in the 1990s I arrived in the US as an international graduate student with an excellent foreign credit history (which counts for nothing in the US) and no US personal or family credit history. I applied for a bunch of credit cards, both student-oriented and not, and kept getting rejected (even for a Sears card), until after a few months I was approved for an AT&T Universal Mastercard (which is now a Citi card) with a $300 limit and a calling benefit. About 2 years later I started getting offers by mail, and applied for an Amex Blue card because it gave vouchers for cheap flights on Continental (not sure if it was a student card). Fast forward 20 years, the Amex is still in my wallet (5% cash back on groceries and gas); the funny thing is I never updated my income since my grad school days, and today my credit limit is higher that what my profile says is my annual income 🙂

  23. I am in college and was approved for the Uber Visa and Delta Gold Amex. Before these cards, I was an authorized user on my parents Amex Platinum and Chase Sapphire Preferred.

  24. My relationship manager from HSBC said I can declare any funds that my parents wire to my account for tuition, personal spending, and rent on the “income” line on credit card applications.

    HSBC easily grants me CLs in the 5 digit range however, other banks do not. AMEX Plat is the easiest to be accepted though since it’s a charge card.

    Prior to the HSBC cards, I did not have any credit cards (including sub cards).

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