Journey® Student Rewards from Capital One® Review
Building credit in college is a wise move if you plan to get a car loan or buy a house eventually after graduation. The Journey® Student Rewards from Capital One® credit card is designed for young adults who have average credit and want to earn a little cash back.
This card offers cash back rewards, along with some useful tools that can help you obtain a good credit rating over time. You have an opportunity to increase your credit line with responsible card use and track your credit score each month for free.
The Journey® Student Rewards from Capital One® card has no annual fee, which is good for budget-conscious students. There’s also no foreign transaction fee, which is a plus if you’re planning to study abroad. Read on to learn what this card has to offer if you’re looking for a way to jumpstart your credit score while you’re still in school.
Simple, Convenient Cash Rewards
If you’re a broke college student, you know that a penny saved is a penny earned. Journey® Student Rewards from Capital One® makes it fairly easy to add to your savings as you spend.
This card offers a flat 1% cash back rewards rate on every purchase. That means you get 1% back whether you’re booking a flight home, buying textbooks or picking up the tab for pizza with friends.
There’s no cap on cash back earnings. The more you spend, the more you get back. For example, if you charge $500 a month to the card, that’s $60 a year in cash back you’ll earn. Double that to $1,000 a month in purchases and you bump your cash back up to $120 per year.
Get a cash back boost when you pay on time
Paying your credit card bill on time is a must if you want to grow your credit score. Thirty-five percent of your FICO credit score is based on payment history. (Your FICO score is the one that most lenders use for approval decisions.)
FICO Credit Score Factors and Their Percentages
|FICO credit score factors||Percentage weight on credit score:||What it means:|
|Payment history||35%||Your track record when it comes to making (at least) the minimum payment by the due date.|
|Amounts owed||30%||How much of your borrowing potential is actually being used. Determined by dividing total debt by total credit limits.|
|Length of credit history||15%||The average age of your active credit lines. Longer histories tend to show responsibility with credit.|
|Credit mix||10%||The different types of active credit lines that you handle (e.g., mortgage, credit cards, students loans, etc.)|
|New credit||10%||The new lines of credit that you've requested. New credit applications tend to hurt you score temporarily.|
Paying on or before the due date each month can help your score and it can put even more money back in your pocket. When you pay on time, Capital One increases your cash back rewards rate to 1.25%.
That means if you charge $500 every month and pay on time, you’ll earn $75 a year in cash back instead of $60. That’s a nice incentive to keep track of your due dates each month.
Tip: If you’re worried about your credit taking a hit because of a late payment, set up automatic payments so you’ll never have to worry.
Redeeming cash back rewards
Redeeming cash back with the Journey® Student Rewards from Capital One® card is just as easy as earning it. You can apply your cash back rewards as a statement credit, reducing what you owe. Or, you can ask for a check to be mailed to you. That way, you can use your cash back rewards any way you like.
To make the process virtually hassle-free, Capital One allows you to schedule automatic redemptions. For example, you can request a statement credit or check once you hit a certain amount of cash back or at a specific time each year.
Access Your Credit Score and Other Financial Tools for Free
The Journey® Student Rewards from Capital One® card is meant for students who have decent credit and want to take their score to the next level. The card comes with several tools that students should find useful.
For example, CreditWise is included with your account. CreditWise is Capital One’s free credit tracking service. Each month, you’ll be able to see your TransUnion credit score, which is based on the information in your TransUnion credit file.
This tool also breaks down how certain factors affect your credit score. For example, you’ll be able to see:
- What percentage of your payments are being made on time
- The age of your oldest credit account
- What percentage of your total credit limit you’re using
- How many recent inquiries you’ve had for new credit
- The number of new accounts opened in the last two years
- How much available credit you have
CreditWise includes a simulator tool that you can use to see how taking certain actions would raise or lower your score.
For example, paying your bills on time and paying down your debt would generally work in your favor. Taking on a new loan or maxing out one of your credit cards, on the other hand, could drag your score down.
Increase your credit line when you pay on time
Paying on time can step up your cash back rewards rate and it can help you in another way. If you make your first five monthly payments on time, you could be eligible for a higher credit line. This is good for two reasons.
First, a higher credit line means more spending power. If you need to cover a large purchase, like an overseas trip, you may not have to resort to loans or borrowing from your payments to pay for it.
The other advantage is linked to your credit score. Thirty percent of your FICO score is based on your credit utilization. This is the amount of debt you’re carrying compared to your overall available credit line.
When you have a higher credit limit but you’re keeping your utilization low, that reflects positively on your score. If you’re not sure how much of your credit is safe to use, aim to keep your utilization at 30% or less to avoid putting your score at risk.
Tip: Set up an account alert to notify you when your balance hits a certain amount so you know how much of your credit limit you’re using.
Learning Center to Upgrade Your Money Skills
Figuring out how to manage debt and credit in your 20s can be tough. Fortunately, Capital One offers some helpful resources to get you started. The Financial Education center features tips on things like:
- Using credit responsibly
- Understanding your credit score
- Saving money
- Creating a budget
- Managing your bank account
- Preparing to buy a home
The more you know about using credit, saving your extra pennies and keeping debt in check, the better.
Enjoy Visa® Platinum Benefits
The Journey® Student Rewards from Capital One® card is a Visa® Platinum card. That means you get some sweet extras just for being a member.
For example, the card comes with:
- 24-hour travel assistance services
- Travel accident insurance
- Auto rental collision damage waiver
- Extended warranty protection
Those features can come in handy if you’re traveling or you want some extra peace of mind about the things you buy.
Watch Out for the Regular APR
One thing to keep in mind with the Journey® Student Rewards from Capital One® card is the annual percentage rate. The regular variable APR for purchases and balance transfers is on the high side.
Even though there’s no annual fee, this card could cost you big bucks in interest if you’re carrying a balance from month to month. The interest you’re paying could outweigh the value of the cash back you’re earning.
What Else Does Capital One Have to Offer?
The Journey® Student Rewards from Capital One® is appealing for building credit but there are some other Capital One cards that can help you achieve that same goal. Take a look at how the following three cards compare:
Capital One Platinum MasterCard
The Capital One Platinum MasterCard is another option for people with average credit who want to improve credit. This card isn’t limited to just students however. One key difference between this card and Journey® Student Rewards from Capital One® is the lack of a rewards program. You won’t get any cash back or points with this one.
If your primary focus is improving your credit, that may not be a huge drawback. You won’t pay an annual fee for this one either. The regular variable APR for purchases and balance transfers is a bit higher than the Journey Student card, however.
Capital One Secured MasterCard
Getting a credit card when you have no credit at all is challenging. A secured card is an alternative for students who are credit newbies.
With the Capital One Secured MasterCard, you put up a cash deposit to open an account. The minimum deposit is $49, $99 or $200, based on creditworthiness. The initial credit line is $200 but you can add more cash to the card to increase that to $3,000.
Again, there are no rewards with this card. It’s designed to be a tool for building or rebuilding credit. If you’re able to raise your score, you could switch over to a Capital One rewards card down the line.
Capital One QuicksilverOne Rewards
The Capital One QuicksilverOne Rewards card offers unlimited 1.5% cash back on every purchase. Unlike the other cards in our review, this one has a 0% introductory APR period for purchases. The trade-off is a $39 annual fee.
Students who don’t mind the fee may get a bit more mileage out of this card in terms of the cash back. The regular variable APR for purchases is more than the APR for the Journey® Student Rewards from Capital One®, however. Your best bet with this one is to pay your balance in full each month to avoid the interest charges.
Capital One Student Cards
|Capital One Journey Student Rewards||Earn up to 1.25% cash back on all spending and get a higher credit limit with 5 consecutive on-time payments.|
Capital One Cards to Build/Improve Credit
|Credit Card||Poor/Bad Credit|
|Capital One Platinum||Designed for people without good credit to help rebuild credit with no annual fee or security deposit.|
|Capital One® Secured MasterCard®||A secured credit card with an extremely low initial deposit requirement to help rebuild credit immediately.|
For Students to Earn Simple Cash Back and Build Credit
The Journey® Student Rewards from Capital One® pairs cash back with the potential to achieve a higher credit score. This card may not be the best for students who have no credit at all or prefer points or miles to cash rewards. Ultimately, we’d recommend this one for students with established credit who want to earn simple cash back with no annual fee.