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Student credit cards

If you use it responsibly, a student credit card could help you manage your money while you’re at college or university. It’s also a way to start building up a good credit score. Read our guide on what you need to know before you apply.

If you use it responsibly, a student credit card could help you manage your money while you’re at college or university. It’s also a way to start building up a good credit score. Read our guide on what you need to know before you apply.

Written by
Sajni Shah
Consumer expert on money and utilities
Last Updated
7 JULY 2023
4 min read
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What is a student credit card?

Student credit cards are specifically designed for young people studying at university or college who aren’t working full-time and haven’t yet established a credit history.  

They’re a way of spreading the cost of purchases and other expenses by borrowing the money and paying it back over time.  

Credit cards for students work in the same way as normal credit cards, but they typically have no annual fee and a low credit limit to help you avoid taking on too much credit. 

Can a student get a credit card? 

Eligibility criteria for a student credit card will vary from provider to provider. But you’ll generally need to:

  • Be aged 18 or older 
  • Have been living in the UK for at least three years 
  • Have a student bank account with your chosen provider 
  • Prove you’re currently registered to take a course lasting for a minimum of two years. 

You might need to show that you’re bringing in a regular income that isn’t related to your student loan. This could be through a part-time job or a consistent amount paid into your student bank account by your parents. It could also help your application if you’re making regular payments for a mobile phone contract or another financial product. 

Your options may be limited because not many providers currently offer student credit cards, and you need to be an existing account holder with the provider to get one.  

How do student credit cards work?

Essentially, a student credit card is a way of borrowing money – perhaps for purchases or emergencies – and paying all or some of it off every month.

You’ll get a statement each month showing how much you owe – your balance. If you clear your balance completely, you won’t have to pay any interest on the amount you’ve borrowed.

If you can’t afford to do this, interest will be added to what you owe. The rate for this will be set by your credit card provider based on your financial circumstances.

  • Most credit cards for students come with a pre-determined limit, so you won’t be able to continue spending indefinitely.
  • You should never borrow more on a credit card than you can afford to pay back. Debt can soon mount up once interest charges start to accumulate.

How do I use my student credit card? 

You can use your credit card just as you would a debit card, including in-store for contactless and chip and PIN payments as well as online. Cards can also be used with Google Pay and Apple Pay. 

Student credit cards can be used abroad, but there will be charges for doing this. 

What are the advantages of a student credit card?

Advantages can include: 

  • Spreading the cost of purchases: you could buy something today, then repay the money over several months, but make sure you can afford to pay it back. If you can, you should pay off more than the minimum each month to clear any outstanding debt as quickly as possible.
  • Building your credit score: a student credit card can help improve your credit score if you keep up with your minimum monthly repayments. This could make it easier to get credit cards, loans and a mortgage in the future. You can also benefit from better interest rates.
  • Personal finance skills: learning how to manage a credit card account can teach you about the importance of staying within limits and paying bills on time.  

What are the disadvantages of a student credit card? 

Disadvantages can include: 

  • Debt risk: if you fail to keep up with your monthly repayments, you can land yourself in debt. It could also negatively impact your credit score and your ability to apply for credit in the future. So, if you think you’d struggle to keep a lid on your spending, it’s best to avoid getting a credit card.
  • High interest rates: if you don’t pay off the balance of your student credit card in full each month, then you can also find yourself paying high interest rates.
    Low credit limits: credit limits are often calculated based on income. This means that they can often be lower than average for students – so you might need to get more funds from elsewhere if you need to make a particularly large purchase.
  • Low credit limits: credit limits are often calculated based on income. This means that they can often be lower than average for students – so you might need to get more funds from elsewhere if you need to make a particularly large purchase.

What should I consider before applying for a credit card?

Before applying for any credit card, consider: 

  • Your credit score. It’s a good idea to check this before you make an application. As a student, you might not have built up much of a credit history yet, but if you’ve ever missed a bill payment or been in debt, this could affect your chances of being accepted.

    Use a credit card eligibility checker to avoid applying for cards that you may be declined for.
  • Check the annual percentage rate (APR) as this shows the cost of borrowing if you don’t pay off the balance in full each month. As you pay off the debt, the amount of interest you pay will also reduce.
  • Check penalty charges for going over your credit card limit or missing a payment.
  • Consider whether you believe you can use the credit card responsibly or whether you feel it may tempt you to spend more than you should.
  • Check whether there’s an annual fee. Most credit cards for students come without one but it’s best to find out.
  •  Check the charges for using your student credit card abroad. This is especially important if you’re a frequent traveller.

How do I apply for a student credit card? 

Student credit cards are typically only available if you have your your student current account with the same provider. You may not be able to apply if you have another credit card from that provider. You can usually apply through your provider’s website.

How to manage student credit card spending and repayments

Managing your student credit card spending and repayments effectively is vital if you’re to build a good credit score and avoid any unnecessary fees along the way. Here are some tips:

  • Pay your statement balance in full: if you do this before the deadline each month, you usually won’t have to pay any interest. If you can’t pay the full amount, be sure to repay at least the minimum.
  • Set up a Direct Debit: this is a way of making sure you don’t accidentally miss a payment. Just make sure you have enough cash in your bank account to cover it.
  • Don’t use your credit card to withdraw cash: if you use your card to withdraw cash at an ATM you’ll face daily interest on the amount you withdraw and a cash advance fee
  • Avoid going over your credit limit and aim to spend under it too: the closer you get to your limit, the higher the chances of your credit score taking a knock.
  • Buy big-ticket items on credit: under Section 75 of the Credit Consumer Act, you could get a full refund from your student credit card provider on single purchases over £100 if the item is damaged, doesn’t arrive or the firm goes into administration. But it’s important to note that there’s no guarantee you’ll get your money back. It depends on the circumstances and the terms and conditions of your credit card provider.

What will happen to my student credit card after I graduate?

Your provider might offer you a standard credit card with better interest rates and rewards. They can also upgrade your student bank account to a graduate account. 

But you don’t have to stick with your current provider. This may be a good time to compare your options. As a graduate, especially if you were diligent about managing your credit as a student, you might have access to attractive deals and offers from other providers out there.

Is there an alternative to a student credit card?

If you already have a student bank account, you could be entitled to a student overdraft. This might be a more suitable option than a credit card. An overdraft can be a safety net for emergencies or necessities, and if you use it sensibly it won’t negatively impact your credit score.

Many student accounts will offer interest-free overdrafts during the course of your studies. Assuming you stay within your authorised overdraft limit, you won’t have to pay any interest on that overdrawn balance until after you graduate.

Comparing student credit cards

Compare the Market doesn’t compare student credit cards specifically – but we can help you compare all the credit card options currently available to you. Give it a try now.

Compare the Market Limited acts as a credit broker, not a lender. To apply you must be a UK resident and aged 18 or over. Credit is subject to status and eligibility.

Looking for a credit card?

Compare credit cards quickly and easily. Use our eligibility checker to find a credit card deal that suits you – and find out if you’re likely to be approved without it affecting your credit score.

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Frequently asked questions

Can I get a student credit card with no credit history?

You should be able to. Student credit cards are designed for younger people who haven’t yet had experience of borrowing. If you use your card responsibly, you’ll start building a good credit score.

Do student loans affect your credit score?

Student loans don’t have any impact on your credit score. But they may be taken into account when you apply for a mortgage and the lender is deciding how much you can borrow.

Can I get a student credit card with bad credit?

If you have a bad credit score, it might still be possible to get a student credit card. But you’re likely to be offered higher interest rates and a lower spending limit.

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