Getting a credit card when you are a student can make it easy to spend money you haven’t got. However, a credit card can be useful in an emergency and help you start building a credit history. Find out more about the pros and cons with our guide.
What is a student credit card?
Student credit cards work in the same way as other credit cards, but are more likely to accept students studying full time.
Every credit card provider has different rules on whom they will lend to. Many will turn down your application if your income is not high enough or you have no credit history, but student credit cards are more lenient.
The pros and cons of student credit cards
Can you get a student credit card?
When you apply for a credit card the provider will check:
You live in the UK
You are at least 18 years old
You do not hold another student credit card with another bank
You have a UK bank account
You have not had previous debt problems like bankruptcy
You are studying or about to start studying a suitable course
A suitable course will usually be an undergraduate course of at least two years at a college or university in the UK. You may need to prove that you have been accepted onto the course.
Some providers only offer deals to existing customers and some cards are only available if you open a student bank account with them as well.
Do you need an income to get a student credit card?
To get a student credit card you will have to demonstrate that you have some income. This can come from: :
If you apply for a standard credit card, most lenders will expect you to have a regular income from work.
How to get a student credit card
Compare every credit card that will consider applications from students
Use a free eligibility checker to find out what cards you are likely to be accepted for. Making a real application leaves a trace on your credit file that could affect your credit score and future credit applications. An eligibility checker makes a 'soft' check that doesn't appear on your record to other lenders, so it's a much better idea.
Double check you meet the card's eligibility terms
Check the credit limit is high enough for your needs
You can then take out the card you choose. Here is how to apply
If your application is declined, avoid applying for more credit cards immediately because it can harm your credit history.
Instead, wait at least six months, during which you should take steps to improve your credit score. You can read more about how to improve to your credit here.
Getting your first credit card
How much do student credit cards cost?
All credit cards charge interest on what you borrow if you don't pay off your balance every month.
Student credit cards often charge higher interest rates than other credit cards, making them more expensive. Credit cards also charge you if you miss a payment or break any other terms of the card and some have annual fees. Here's how to understand credit card charges and avoid them
What can go wrong?
Credit cards can make it very easy for cash-strapped students to get into debt.
This is why it is really important that you don’t spend more than you can realistically afford to repay on your credit card.
If you don’t pay your bill in full each month interest will be charged. This can quickly cause your debt to spiral, especially if you only make the minimum repayment.
Should you go over your credit limit (the maximum you can put on your card) or miss a payment, fees will be added to your debt and you will alsodamage your credit history.
What happens after you graduate?
You can usually keep your student credit card after graduating or leaving your course.
However, you may be able to get a card with better benefits like cashback, rewards or interest free purchases once you start work.
If you have managed your student credit card well, you should have built up a good credit history and be in a better position to borrow than those that haven’t had a credit card before.
What are the alternatives to student credit cards?
There are other ways to borrow or access money in an emergency:
Interest-free overdrafts: they can be a cheaper way to borrow and are offered with most student current accounts.
As a secondary cardholder on a parent's credit card: This would give you a card to use in an emergency. Your parent would be in charge of paying the bill and managing the account, so they would have to trust you not to overspend. Here are more student finances tips and our student budget planner has some tips on staying on top of your finances.
Grants and student loans: These can be some of the cheapest ways to fund your education. Check what is available using GOV.UK, the Student Loans Company and The Student Room.
FAQs
Used sensibly a student credit card can provide peace of mind and help you start building that all important credit record. Getting a credit card when you are a student can make it easy to spend money you haven't got. However, a credit card can be useful in an emergency and help you start building a credit history.
Is getting a student credit card a good idea? ›
Getting a student credit card can be one of the best ways to build your credit. For example, unlike student loans, if you manage your credit card right by paying it off in full each month, you won't ever have to pay any interest. It's a free way to build your credit.
Should you have a credit card as a student? ›
“Being a student often means juggling your finances and while you should always be wary of taking on more debt, used wisely a student credit card can offer plenty of advantages such as protection on purchases, loyalty points or rewards and a head start in building your credit rating for when you graduate.
Is it a good idea to get a credit card UK? ›
a credit card can be a stepping stone to a better credit rating. By using your card responsibly, you demonstrate to lenders your ability to manage credit. For those with less-than-stellar credit histories, credit builder credit cards are specifically designed to help improve your score.
What are the disadvantages of a student credit card? ›
Disadvantages of a Student Credit Card
- Low Cash Back Earn Rates. ...
- Generally Only for Students. ...
- Credit History Might Be Needed to Apply. ...
- Lower Credit Limits. ...
- Higher Interest Rates. ...
- Potential for Mismanagement. ...
- Might Encourage Unnecessary Spending. ...
- Fees and Penalties.
While it's easier to qualify for a student card over traditional credit cards, the trade-off is that they tend to come with lower credit limits. Lower limits protect card issuers, since those without much of a credit history are viewed as a higher risk for defaulting on or not paying back what they borrow.
Do student credit cards build credit faster? ›
No, student credit cards do not build credit faster than any other type of credit card. Most credit cards, including student cards, report to at least one of the three major credit bureaus monthly, so making payments on time and otherwise using your card responsibly will improve your credit score over time.
What are 5 disadvantages of a credit card? ›
5 Disadvantages of Credit Cards
- High-Interest Rates. If you carry a balance on your card, the interest rate can be as high as 30% or more. ...
- Potential for Overspending. It's easy to get caught up in the moment when using a credit card instead of cash or a debit card. ...
- High Annual Fees. ...
- Hidden Costs. ...
- Credit Card Debt.
To apply for a credit card in the UK (including Northern Ireland) you need to be over 18 and living here. Other factors affect your eligibility too. To check if your application is likely to be accepted, use a tool that won't affect your credit score like our credit card eligibility checker.
Is there a downside to getting a credit card? ›
High credit card interest rates — and how quickly they can result in mounting debt balances — are a downside of credit cards. But if you pay off your balance in full and on time, you can reap benefits like rewards and a strong credit score.
A credit card can make it easy to overspend. If you use your card, you must pay for what you buy. You don't get a break because you are a teenager. If you spend more money than you are able to repay, you can ruin your credit score, also known as a credit rating.
What happens if I don't use my student credit card? ›
Issuers will likely let you leave it open indefinitely. The main benefits of keeping your card the same are: Your credit score will likely not be negatively impacted if you continue paying at least the minimum payment on time each month.
Should a student have a debit or credit card? ›
College students may find a debit card useful as they become financially independent. Unlike a credit card, which can accumulate debt and often charges annual fees, a debit card can keep you more accountable financially. The downside of a debit card, however, is that there are some fees to be aware of.
Why is it risky for a college student to have a credit card? ›
Risks of a Student Credit Card
Like all forms of debt, student credit cards have drawbacks. They tend to have high annual percentage rates (APR), so if you spend more than you can afford to pay off by your due date, you'll be hit with interest charges.
When can having a credit card be a good thing for a student? ›
A credit card can be a life-saver when you go off to college and you suddenly need a doctor, a new car battery, a contact lens, or when you need a ride home late at night and have no cash on you, for example.
Is it a good idea for high school students to have a credit card? ›
While many parents may worry that their teens aren't responsible enough to handle credit cards, giving them one can help enhance young adults' financial responsibility and positively impact their credit scores long term.
Should I get my child a credit card for college? ›
Parents might be apprehensive about giving their college student access to a credit card, but if they don't, it could cause problems down the line. Those who delay building a strong credit history may have trouble qualifying for credit cards and loans or even renting an apartment later on.
