Understanding Credit Card Limits for Students (2024)

For many young adults, a student credit card is an early introduction to the world of consumer credit cards and building credit. Compared to regular credit cards, student credit cards generally offer lower credit limits, which make it easier for students to pay back balances.

There are key differences between student and regular credit cards beyond these lower credit limits. Getting approved for a student card is easier since the requirements are more relaxed. Student credit cards are designed specifically for college students and don’t usually require a credit score to qualify. For instance, there’s no credit score required to apply for Discover student credit cards.1

Student credit cards often have lower fees and also come with rewards and features that young adults find appealing. Please remember that these cards may have higher interest rates, so using them carefully and making timely payments is important.

Comparing credit limits: Student vs. Regular credit cards

As mentioned, student credit cards will typically offer lower credit limits compared to regular credit cards. While a regular credit card might offer a credit limit ranging from a few thousand to tens of thousands of dollars, student credit cards typically have more manageable limits ranging between $500 and $2,000.

This difference is due to the amount of risk and income levels of students, who often have limited credit history and lower regular income. The lower limits on student cards are designed to minimize the risk of overspending and help students build credit responsibly. This helps set the groundwork for financial responsibility, as young adults may gradually get higher credit limits with regular cards in the future.

Managing low-limit credit cards for students

If you're a college student with a credit card that has a low spending limit, it's important to use it wisely to help build your credit score. A good rule of thumb is to spend less than 30% of your credit limit. For example, if your card has a $1,000 limit, try to keep your spending under $300. It’s wise to use the card for small purchases, like subscriptions, school supplies, or groceries. Make sure to pay off the total balance each month to avoid accumulating debt and to improve your credit history. Use your credit card's mobile app or set up text message alerts to keep track of your spending and avoid exceeding your limit. This approach allows you to benefit from having a credit card while avoiding the pitfalls of debt.

Requesting credit limit increases

A low limit on a student credit card can serve as a set of “training wheels” for students still learning how to manage their finances properly. That said, a credit limit of $1,000 or less may seem restrictive, especially for emergencies such as unforeseen car repairs or travel arrangements for a necessary trip back home.

If you've been using your credit card responsibly, consider asking for a credit limit increase. It's best to do this after you've owned the card for at least six months and have a track record of timely payments. When you're ready, you can typically request an increase online or by calling your credit card issuer. They'll look at things like how you've used your card, your payment history, and any changes in your income.

Remember, a higher limit can be helpful, but it's still important to spend wisely and keep your balance well under the new limit to maintain a favorable credit score.

Transitioning from student to regular credit cards

Student credit card limits are set with the intention of being a short-term financial solution, similar to other features of student credit cards. As you approach the end of your college journey, it's time to consider transitioning from a student to a regular credit card. Learn more about how your credit card can graduate, too.

Typically, this step is best taken once you've graduated and begun earning a steady income, as regular credit cards often require higher income levels for approval. Before making the switch, ensure you've consistently managed your student card well, with on-time payments and low credit utilization. To upgrade, you can apply for a new regular credit card or check if your current card issuer offers an upgrade path. Remember, moving to a regular card often means access to better rewards and higher credit limits, but it also requires continued responsible spending to maintain a healthy credit score.

If you think that you’ll need to cancel your student card just to apply for a new credit card, you might want to reconsider your options. Canceling a card may impact your credit score. If your student card is your oldest card, canceling it could reduce the length of your credit history, which is a factor in your overall credit score. Instead of canceling your student card, consider upgrading or reclassifying your student card after you graduate.