How do credit cards for students work?
Student credit cards can help you smooth out your finances by allowing you to delay payments on the things you buy for a certain amount of time.
Just like with a normal credit card, you can spend money up to a pre-arranged credit limit. As long as you pay the full balance off by the due date each month, you won’t pay interest on what you’ve borrowed.
As a student, you tend to not have an established credit history, which makes it harder for banks to tell how good, or not so good, you are with your money. You’ll also notice that the terms and conditions often aren’t as favourable as a credit card for, say, someone who’s in full-time employment and has a good credit history.
However, when used properly student credit cards can be a cheap, or even cost-free way to borrow money and add a bit more flexibility to your finances.
Check your eligibility for a Vanquis Bank credit card today and see how we can help you start building your credit.
What are the benefits of student credit cards?
Most of the major banks and many other providers now offer a credit card for students. These usually have benefits like;
- a low credit limit to keep things under control, usually around £500.
- great flexibility, with up to 56 days to pay off what you owe before you begin paying interest.
- a great way to build your credit history while studying, which will really help when you look for your own place later.
- rewards and perks, which might include and special offers. While these are nice, they’re not the most important thing – focus on the terms and conditions instead!
Finally, if you stay within your credit limit and regularly pay off what you owe before the interest kicks in, credit cards for students can help you develop good financial habits.
Things to look out for with a student credit card
Just like with a regular credit card, you want as low an APR as possible when you apply for a student credit card. This is the annual percentage rate that you’ll be charged on any balance you haven’t repaid in full by the due date.
Even if you’re planning to be squeaky clean and never have an unpaid balance outstanding, remember that finances can be unpredictable – especially when you’re a student! The lower the APR, the easier it’ll be to repay any interest you do incur.
Also bear in mind how long the period is for interest-free credit on purchases. This is usually 56 days from when the purchase was made, but it may vary from provider to provider.
Some student credit cards have a companion app that sends you regular reminders about your due date and how much you have to pay. These can be a life-saver if you’re the forgetful type!
It’s also a good idea to check your credit score before making an application. As a student you may not have one yet, but if you’ve ever defaulted on a loan or missed a mobile phone bill it may hurt your chances of being accepted.
Tips on managing your finances as a student
Managing your money is an important part of student life. It all starts with setting a budget for the semester – your loan plus any savings or income you have, minus tuition fees, rent, mobile phone bills and any other regular essential outgoings. What’s left over has to last you for food, transport and fun for the rest of the semester!
Use our budgeting tools to find out more about making 30-day and annual planners to ensure you’re staying within your means. Don’t forget that as a student, you’re entitled to a bunch of discounts and deals – feel free to make the most of these, but only buy what you need.
Don’t just assume you need a student credit card. Remember, they’re not free money –instead, think of them as a convenient way to shuffle money around. If you’re unable to repay what you owe, you could get into more debt and it could damage your credit score.
Start building your credit with a Vanquis Visa credit card
If you’re interested in applying for a student credit card, check your eligibility online to see if you’re applicable for a Vanquis Bank credit card . We may be able to give you a decision within 60 seconds, so you can start building your credit today .
Frequently asked questions
Do student loans affect my credit score?
No. Taking out a government-funded student loan is treated differently to a standard bank loan.
Are student loans credit-based?
Normally, student loans are not subject to a credit check. The Student Loans Company, the non-profit organisation that operates the service, doesn’t base its decision on income or credit ratings. This is also the case if you’re an older student taking out an Advanced Learner Loan.
Can I pay student loans with a credit card?
You can make repayments toward your student loan with a credit card, but it’s not a very good way of paying it back – to begin with, there’s a 1.5% surcharge for doing it. In general, it’s better to pay normally, with money you own or with a debit card, rather than with credit.
Which student credit card should I get?
This depends on your circumstances and how you’ll be using it. Take the time to research and compare a few different options from the major banks, paying attention to the APRs and any penalty clauses. It’s a good idea to go with a name you trust, too – not all credit cards have your best interests in mind!
Can I withdraw cash using my student credit card?
Yes, but most cards will charge you, and you'll likely have to pay a higher rate of interest for withdrawing cash – make sure you check the terms and conditions to find out how much this is likely to cost overall. In general, it should be avoided, since you’re withdrawing money you don’t really have (and paying extra for the privilege!).
Can students get a credit card without a job?
Yes, the income criteria for student credit cards are usually more relaxed seeing as you are in full time education, than for mainstream cards. Since these products are designed for students, they don’t normally have an income requirement.
If you do have a job, it may be best to look into a non-student credit card, which may offer better conditions – see our guide to applying for first-time credit.