Student credit cards

Starting college or university could also be when you start managing your money for the first time. This guide looks at how student credit cards work and the pros and cons of having one.

What is a student credit card?

Student credit cards are often offered by banks and building societies with student accounts. You usually need to have an account with them first. Good credit cards for students can include cards that aren’t marketed as ‘student’ cards. You’re likely to have little or no income and probably won’t have much of a credit history. So, you can also look at credit builder cards.

How do student credit cards work?

Student credit cards and credit builder cards work like other credit cards. Whenever you pay for something, you’re borrowing the money. The total you owe is called the ‘balance’. There’s a maximum spend, called the ‘credit limit’.

You must make a ‘minimum payment’ every month to pay towards what you’ve borrowed. If you don’t pay back the total, you’ll usually be charged ‘interest’. It’s best to pay in full to avoid that – and show you’re not borrowing more than you can afford. Some credit builder credit cards offer 0% interest for a few months initially.

What are the eligibility criteria for student credit cards?

To get a student credit card you’ll need to be over 18, have lived in the UK for several years and be able to prove you’re registered on a course. You’ll usually need to have a current account with the provider – possibly for a specific period first. They might want to see you’re getting a regular income apart from your student loan such as from a part-time job or family.

Providers won’t expect you to have much of a credit history, but if you’ve been making regular payments like mobile phone bills, that could help. For credit builder cards, eligibility criteria are similar, but you probably won’t have to prove you’re a student or have a specific bank account.

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Which is the best student credit card for me?

The best credit cards for students depend on individual circumstances. It makes sense to look for a card with a lower APR (the overall cost including the interest rate) or an interest-free period.

Some cards offer appealing perks and rewards – but if you’re not paying your bill in full every month those ‘freebies’ will cost you. Some cards have a higher credit limit – if you anticipate making some big purchases, that could help. But higher limits go along with higher interest rates, so will prove expensive if you can’t pay off the full amount in time. You might prefer a lower limit to keep a check on your spending.

How do I apply for a student credit card?

You can usually apply online. But you might be able to get help face-to-face. Don’t make lots of applications within a short time as that can affect your credit score. Use our eligibility checker to work out your chances of qualifying.

We're a credit broker, not a lender^†

What are the pros and cons of student credit cards?

Student credit cards and credit builder cards can:

• Allow you to build a credit history. Don’t spend too much as a proportion of your credit limit and pay off the bill each month and you should develop a good credit score. Managing the card responsibly will stand you in good stead if you want a mortgage or other type of loan in future.
• Give you protection on anything that costs over £100. The law on credit means card issuers refund you when there’s a problem. ‘Section 75’ requires them to repay you if something’s not delivered or a seller goes bust.
• Help you budget. The monthly credit limit acts as a built-in spending cap. The risk of paying interest can bring discipline. That should mean you plan and monitor your finances – great habits for the future.
• Help with unexpected costs. Credit cards can be useful if there’s an emergency. But, unless you have a 0% deal, remember there’ll be interest to pay if you can’t afford to pay the money back when it’s due.
• Offer a cheap way to borrow. If you pay your bill in full every month, there’s no cost involved. And with cards offering an interest-free period, you’ll have longer to repay what you owe. Otherwise, borrowing on a credit card can be expensive.
• Provide useful perks. Provided you pay off what you owe every month, cashback and other rewards can be worth having.

But there are cons too. These include:

• Debt can spiral out of control. Paying less than the full amount or missing a payment can prove very expensive and will negatively impact your credit score.
• Extra fees can add up. Don’t use the card to withdraw cash as there are extra fees and interest. And be careful how you use the card when travelling abroad.

What are the alternatives to student credit cards?

Student bank accounts have generous interest-free overdraft limits. So, you can withdraw or spend more money than you have in your account without paying extra. You need to keep within the limit though. This activity will also build up your credit history.

Some retailers offer ‘buy now pay later’ services, but it’s important to make your repayments on time to avoid hefty charges.

If budgeting is important to you, a prepaid card could work best. If you really need to borrow money, you could consider personal loans.

We're a credit broker, not a lender^†

Can I get a student credit card with a bad credit score?

The low credit limits and higher interest rates that come with student credit cards and credit builder cards, are because you have no credit history or a low credit score.

Does my student loan affect my credit score?

Student loans don’t appear on your credit file or affect your credit score. But if you ever want to take out a mortgage, lenders might take it into account.

We're a credit broker, not a lender^†

What happens to my student credit card after I graduate?

Your student credit card should still work but you might want to switch. A higher credit limit could be useful, for example. But only if you have an income to match.

How do I compare student credit cards?

With Experian, you can compare credit cards. You can see your eligibility rating to check your chances of approval before you apply. We don’t provide credit – we’re a broker. So, we can help you find and compare different offers all in one place.