Student Credit Cards

Credit cards allow users to make purchases using borrowed money, which must then be paid back within a set time (depending on the provider) to avoid being charged interest.

There are several different types of cards available to students in the UK with each offering their own unique benefit. These include:

  • Introductory interest free rate on purchases - Some cards offer a period of 0% interest on purchases, meaning users won’t be charged interest until the period runs out.
  • Low standard interest rate - By opting for a low interest rate, users will be charged less interest on their balance. This is a preferable option for those that may not want to pay the balance off in full each month.
  • Cashback - If the balance is paid off in full each month, users don’t have to worry about the interest rate. They can receive a percentage of what they spend back in the form of cashback.

Applying for a credit card

Obtaining a credit card is usually a simple process as banks will try their hardest to increase their business and see students as an easy target. Some banks will even accept people who don’t have an income.

Are they suitable for Students?

Credit cards are undoubtedly useful for things such as online purchases. But the problem for students is that they can easily find themselves over-relying on credit cards while away from home, and as they usually charge a high rate of interest students can quickly find themselves in debt – in addition to their student loan debt.

Credit cards should definitely be avoided by those that have no means of repaying the money. Failing to make repayments can lead to a bad credit rating, which would have devastating effects on a graduate’s ability to obtain finance in the future. Therefore it is important for students to think carefully whether a credit card is a necessity or whether the option of a prepaid card would be more suitable.

Prepaid cards

A prepaid credit card works in the same way as prepay mobile phone – the card must be topped up with credit in advance.

A prepaid credit card is a good option for those who have been refused credit, or want to avoid repayments, but still want the functionality and benefits of a credit card.

However, the pros and cons of a prepaid card (listed below) should still be considered by students before deciding whether they are needed or not.

The Advantages

  • No interest charges
  • No late payment fees
  • No risk of getting into debt
  • Convenience and benefits of a credit card

The Disadvantages

  • Cost around £10 to join the scheme
  • Include a monthly charge of about £5
  • A transaction fee may apply


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