Money

The best credit cards for college students

Since it can take years to build up your credit, it helps to start early. Experts agree that, as long as you can handle a credit card without overspending or missing payments, the optimal time to get your first one may be when you're still in college.

But finding the right card can be a challenge.

While some offer lucrative rewards, others charge annual fees. And although there are plenty of great cards out there, the best ones require you to have a high credit score in order to qualify, meaning your application won't stand much of a chance without a strong credit history.

To determine which card offers the best deal overall, CNBC Make It analyzed 25 popular cards geared towards students. Using a sample budget based on spending data from the Bureau of Labor Statistics specific to Americans under 25, we estimated how much money each card would save students over four years.

Based on the data, here is our No. 1 choice, our runner up and some other good options that may be better suited to your situation.

Our pick for the best card for students

Discover it Student Cash Back Rewards Card

The Discover it Student Cash Back Rewards card is our No. 1 pick not only because of its high return but also because, as advertised, it promises great "rewards for college and beyond." Plus, check out that pup.

The card offers 5 percent cash back on rotating categories, which include spending at gas stations, grocery stores and restaurants. This quarter, users are rewarded for shopping on Amazon.com and at select wholesale clubs. There is a $1,500 cap each quarter on the category earning 5 percent cash back, but the 1 percent on other purchases is unlimited, so your cash back doesn't max out at $300 a year (5 percent of $6,000).

That means there's no max to your bonus, either, because Discover matches all your cash back your first year. Whatever you earn, consider it doubled. Good grades are rewarded too. Users receive $20 in statement credit each school year their GPA is 3.0 or higher.

There's no annual fee. The annual percentage yield (APY) is 14.99 to 23.99 percent, based on your creditworthiness, after six months of 0 percent on purchases, and 10.99 percent on balance transfers.

A representative from Discover did not disclose to CNBC Make It the exact credit score you need to qualify for this card. If you have no credit history whatsoever, you might have better luck with the Capital One Journey or the Discover It Secured, both featured below.

At a glance:

  • Cash back: 5 percent cash back bonus on quarterly rotating categories on up to $1,500 in purchases. 2018 category features include spending at gas stations, wholesale clubs, grocery stores, restaurants and Amazon; 1 percent on all other purchases
  • Annual fee: None
  • Bonus: Discover matches all cash back the first year
  • Variable APR: 14.99 to 23.99 percent, based on your creditworthiness, after 0 percent for six months on purchases, and 10.99 percent on balance transfers
  • Extra perks: $20 statement credit each school year your GPA is 3.0 or higher for up to five years
  • Estimated return after four years: $680

Our runner-up

Bank of America Cash Rewards Card for Students

The Bank of America Cash Rewards for Students has the best bonus offer of all the cards we analyzed. Users get $200 when they spend at least $500 in the first 90 days after opening their accounts, and cash back earned is boosted 10 percent when it's deposited into a Bank of America checking or savings account.

Cardholders receive 2 percent cash back at grocery stores and wholesale clubs and 3 percent on gas on up to $2,500 in combined purchases per quarter, plus an unlimited 1 percent on other purchases.

Like the Discover It for Students, you might not qualify if you have no credit history.

There's no annual fee and the APR is 15.24 to 25.24 percent after a decent introductory offer: 12 months of 0 percent on purchases and balance transfer.

At a glance:

  • Cash back: 3 percent at gas stations and 2 percent at grocery stores and select wholesale clubs, up to $2,500 in purchases each quarter; 1 percent on all other purchases
  • Annual fee: None
  • Bonus: $200 if you spend $500 in the first 90 days
  • Variable APR: 15.24 to 25.24 percent, based on your creditworthiness, after 0 percent for 12 months on purchases and balance transfers
  • Extra perks: 10 percent bonus on cash back if it's redeemed into a Bank of America checking or savings account
  • Estimated return after four years: $640

Best for easy saving

Journey Student Credit Card from Capital One

While many cards specifically designed for consumers with average credit end up costing you money, the Capital One Journey has no annual fee and rewards cardholders for responsible use. Users either get 1 percent cash back on all purchases or 1.25 percent if they pay bills on time.

As an added perk, there's no foreign transaction fee. Beware of the APR, though. At 24.99 percent, carrying a balance from month to month could end up costing you a lot of money in interest payments.

At a glance:

  • Cash back: 1 percent cash back on all purchases or 1.25 percent if you pay your bill on time
  • Annual fee: None
  • Bonus: None
  • Variable APR: 24.99 percent
  • Extra perks: No foreign transaction fee
  • Estimated return after four years: $415

Best if you're trying to bounce back

Discover It Secured Card

Secured cards limit risk for the issuer while helping consumers prove they are able to handle credit responsibly. If you have poor or damaged credit, the Discover It Secured card may be your best choice.

When you get the card, you deposit any amount between $200 and $2,500, and your credit line then equals that security deposit. Discover returns your deposit either after eight months, if you've shown responsible use of credit, or when you close the account.

Among secured cards, according to our analysis, Discover has the best overall offer. Cardholders get 2 percent cash back at gas stations and restaurants on up to $1,000 in purchases each quarter, and 1 percent on all other purchases. Discover also matches all cash back you earn in the first year after you sign up.

Like the Capital One Journey, the card has a high APR of 24.99 percent, so it's wise to pay off whatever you borrow in full.

At a glance:

  • Cash back: 2 percent cash back at gas stations and restaurants on up to $1,000 in purchases per quarter; 1 percent on all other purchases
  • Annual fee: None, but security deposit required
  • Bonus: Discover matches all cash back the first year
  • Variable APR: 24.99 percent
  • Extra perks: No late fee on your first late payment
  • Estimated return after four years: $540

How we decided

To determine the best deals for students, CNBC Make It compiled a list of 25 highly rated credit cards, including secured cards, student cards and cards designed for people with average credit. We vetted each card based on its reward offers, introductory and eventual APR, annual fee, bonus, recommended credit score, late fee, balance transfer fee, foreign transaction fee, redemption options and customer reviews.

We then estimated how much money each card would save students after one year, two years and four years. Our assessment heavily weighs the four-year return to avoid a large sign-up bonus skewing the results. We also assume that most people want a great card that they can stick with for years, since bouncing from card to card can be bad for your credit score.

To estimate the return, we used the BLS's expenditure data on Americans younger than 25. Our budget was broken down by annual spending in categories like gas ($772), groceries ($1,191), dining out ($2,081) and general purchases ($5,137). The general spending category includes shopping, entertainment, public transit, vehicle expenses other than gas, some household costs and travel expenses.

The return estimates incorporate bonuses, but not security deposits, as those are eventually returned. The estimates assume you have a credit limit of at least $1,000 and that you use your card for 90 percent of the purchases you make in these categories, accounting for instances where you have to use cash or shop somewhere that doesn't accept your card. They also assume you don't carry a balance.

The estimates are derived from this single sample budget so, if you use a card strategically and take advantage of its rewards, your four-year return could be higher.

Remember that before you turn 18, you can't get a credit card without a co-signor, and many major issuers don't allow co-signing. Even after you legally become an adult, to get a card independently you'll need to prove you have your own income.

If you don't have much credit history and don't want to have to pay a security deposit, you can consider becoming an authorized user on your parent's account. You might also have luck applying for a card issued by your bank, as an established relationship can improve your chances of being accepted.

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