State Farm Student Visa Credit Card Review

Students who are trying to establish credit for the first time might be attracted to the State Farm Student Visa. The card may especially be a good fit for students with thin or damaged credit files.

The rewards program doesn’t dazzle. Still, it’s nice to have the chance to earn some rewards while building your credit history. When you consider the card’s $0 annual fee and Visa student discounts, the State Farm Student Visa becomes a more appealing choice.

• Earn a rewards rate of 0.5 points per dollar spent on most eligible purchases
• Earn a rewards rate of 3 points per dollar spent on eligible insurance premiums (up to $4,000 per year)
• Entry-level credit card might work well for students with poor credit, limited credit, or no credit at all
• Annual fee:
• Visa student discounts
• $0 liability for fraudulent transactions

Earning Rewards

The State Farm Student Visa credit card lets you earn rewards on most purchases, as long as your account is in open and in good standing. Depending on the type of purchase, you may earn rewards at one of two levels:

• Earn 3 points for every dollar you spend on eligible insurance premium payments of up to $4,000 per year (3X rewards).
• Earn 1 point for every $2 you spend on every other eligible purchase (0.5X rewards).

According to the State Farm Loyalty Rewards Calculator, points have an estimated value of $0.01 each.

The State Farm Student Visa card also has an interesting feature when it comes to rewards. You can earn 1 point for every $2 you spend on interest charges. (Note: You need to pay at least your full minimum payment by the due date to be eligible for this award.)

Be careful. Earning rewards on interest fees isn’t as exciting as it might seem. The appeal of extra rewards shouldn’t make you decide to carry a balance on your credit card. If you revolve a balance and rack up $50 in interest charges one month, you’ll only receive 25 points in return (0.5X rewards). The interest you pay will far outweigh the value of any rewards you earn. It’s not even close.

You won’t earn rewards for balance transfers, cash advances, convenience checks, or any fees (aside from interest) that you pay to the card issuer. Yet this is to be expected with many other rewards cards as well.

Redeeming Rewards

You can redeem the points you earn through the State Farm Loyalty Rewards Program at any time. The card issuer doesn’t require a minimum redemption. However, you may need a minimum number of points for certain redemption options.

Possible ways to redeem rewards include the following:

• State Farm Products
• Gift Cards
• Merchandise
• Travel
• Charitable Donations

Redeeming your points for State Farm Products can be a wise use of your rewards for a couple of reasons. You can apply points as a statement credit on your credit card or toward a loan you carry with State Farm Bank (e.g., auto loan, mortgage, etc.). Points may be used to cover eligible State Farm insurance premiums as well. You can even apply rewards toward your State Farm Bank account balance, effectively converting your rewards into cash back.

When you redeem points for eligible State Farm products, you might receive a redemption premium. The premium could make your rewards worth up to 50% more. However, you’ll need to cash in 100,000+ points at a time to qualify for the maximum redemption premium.

Rewards Potential

Few rewards cards offer bonus categories for insurance premiums. In this spending category, it’s hard to beat the rewards you can earn with a State Farm Student Visa credit card.

According to The College Investor, the average cost of auto insurance for college students is around $3,816 per year in the United States. If you use a State Farm Student Visa to pay for the $3,816 in premium costs, you could earn 11,448 in State Farm Loyalty Rewards.

Now, let’s assume you use the card for another $12,000 in eligible purchases throughout the year. At a 0.5X rewards rate, you would earn another 6,000 points. All total, the $15,816 in spending would net you 17,448 points. The State Farm Loyalty Rewards Calculator values those 17,448 points at around $175.

An extra $175 in free rewards is nice. Yet if you work hard to improve your credit, you might eventually qualify for a card that offers double or quadruple the rewards-earning potential on everyday spending. Nonetheless, the 3X rewards category for insurance premiums would still make the State Farm Student Visa worth keeping around—especially with no annual fee.

It’s worth noting that State Farm reserves the right to cancel its Loyalty Rewards Program at any time without notice. But, if cancellation of the program should occur, you’ll have 60 days from the date of cancelation to redeem any points you earned.

The State Farm Student Visa does not offer any 0% introductory rates on balance transfers or new purchases. That isn’t uncommon for entry-level credit cards.

The annual percentage rate for purchases is variable based on creditworthiness.

• Visa Student Discounts: Enjoy exclusive savings on travel, dining, shopping, entertainment, and many other offers.
• Extended Grace Period: Per the CARD Act, the grace period on a credit card must last at least 21 days. The State Farm Student Visa schedules your due date at least 24 days after your billing cycle closes.
• Rental Car Collision Coverage: Limitations apply, but the benefit isn’t commonly available with student credit cards.
• Works with Apple Pay

See your cardholder agreement for current rates and fees.

What we like

• No annual fee
• Earn rewards while building your credit
• 3 points per dollar spent on up to $4,000 in eligible insurance premium payments each year (0.5 points per dollar spent after that)
• Loyalty Reward points worth an extra 25% to 50% when you apply 25,000+ points toward eligible State Farm products

What could be better

• The rewards aren’t great (1 point for every $2 spent — or 0.5 points per dollar spent) on most everyday purchases
• You must be enrolled in a post-secondary education program to open an account
• Online credit card applications only available for existing State Farm customers (others must apply over the phone or with a local State Farm)
• 3% foreign transaction fee
• 3% balance transfer fee ($10 minimum)

The isn’t a bad option for students with limited or less-than-perfect credit. When you open a credit card and manage it well, it might help you to establish better credit for the future.

Remember to keep the card’s limited reward offerings in perspective. Many credit cards designed to help you establish or rebuild credit offer no rewards at all.

The card is comparable to the Capital One Platinum Secured Credit Card in its qualification requirements. But, unlike the Capital One offering, the State Farm Student Visa requires no security deposit.

The Discover it® Student Cash Back is also somewhat similar. It offers 5% cash back on everyday purchases at different places each quarter like grocery stores, restaurants, gas stations and more, up to the quarterly maximum once activated. Plus, automatically earn unlimited 1% cash back on all other purchases. The State Farm Student Visa is reported to have achievable qualification criteria if your credit needs a bit more work.

The card works best for students who want the opportunity to establish credit. If you’re not a student or if your credit is already in fair to good shape, you may want to consider other options.

On the plus side, the APR range for the State Farm Student Visa is similar to other entry-level accounts. Of course, you can avoid interest altogether if you pay your full statement balance each month.

Many student credit cards require fair to good credit rating to qualify for a new account. But the State Farm Student Visa is reportedly a bit more forgiving in its application process. If you’re worried that you won’t qualify for a student credit card with stricter approval criteria, this account might be a good fit.