What is a student credit card?
A student credit card can give students the chance to build credit while they’re in college, university or studying.
Student credit cards can typically have higher interest rates and lower credit limits, because they’re often seen as higher-risk borrowers. However, if used properly, student credit cards could help people start their credit journey earlier; letting them access a range of improved-interest credit options and even boost their chances of accessing high-quality car loans, mortgages and phone contracts in the future.
Am I eligible for a student credit card?
To apply for credit in the UK, in most circumstances you will need to either be living, working or studying in the UK. Students might not always be in regular employment as they focus on studies. However, this doesn’t always mean applying for a credit card is off-limits. Some students may have some type of income which would allow them to manage a credit card and afford repayments. Student credit cards are also often designed so prospective student card holders don’t need to have a regular income from an employer.
There are credit cards designed for students who do not have a credit history. Different lenders have different eligibility criteria that you will have to meet. To qualify, in most circumstances you’ll need to be:
- Aged at least 18 years old
- A UK resident
- Studying a course at a UK university or college
Managing finances can be an important part of student life. If you can’t make your credit card repayments, you could get into debt, which might damage your credit score. Therefore, you should use your student credit card carefully – this includes making at least the minimum payment on time and avoiding going over your credit limit.
How do student credit cards work?
A student credit card can help you manage your finances, if it’s used responsibly, by allowing you to buy goods and services now and pay for them over time.
Just like with a regular credit card, you can use your student credit card to spend money up to a pre-arranged credit limit. If you pay the full statement balance each month, before the due date, you won’t pay interest on your purchase transactions.
As a student, you might not have an established credit history. This can make it harder for banks to tell whether you’re good at managing your money. Because of this, interest rates are often higher and credit limits are lower on credit cards for students. This is compared with cards offered to those in full-time employment or those with a good credit history.
Student credit cards could be a flexible way to manage your finances, if used in the right way.
Vanquis doesn’t currently offer a specific credit card for students. However, you can find out if you’re eligible for our standard Vanquis Credit Builder Credit Card today.
Representative 30.9% APR (variable)
What are the benefits of student credit cards?
Some major banks and many other providers offer a credit card specially designed for students. These often could have helpful benefits like:
- A low credit limit of usually around £500, designed to help you borrow safely.
- Good flexibility, with up to 56 days interest free on purchase transactions.
- A helpful way to build your credit history while studying. This is essential for any future borrowing; like mortgages, regular credit cards, or loans.
- Rewards, perks and special offers; like rail cards, airport lounge access and discounts on a range of products. Although these benefits are a bonus, credit cards should still be used responsibly.
Finally, credit cards for students can help you develop good financial habits. This is especially true if you stay within your credit limit, regularly pay at least your minimum payment on time, or pay off what you owe before interest is charged.
Finding the right student credit card
Just like with a regular credit card, it can be helpful to apply for a student credit card with the lowest APR (Annual Percentage Rate) possible. APR is the rate of interest you’ll be charged on any purchase balance you haven’t repaid in full by the date it’s due (this may vary if your balance is made up of other transactions; like cash transactions or balance transfers).
Even if you plan never to have an unpaid balance outstanding, try to keep in mind that finances can be unpredictable, especially when you’re a student. The lower the APR, the more manageable it can be to repay any interest you do get charged.
Also keep in mind how many days of interest-free credit you get on any purchases you make. This can be usually up to 56 days from when you made the purchase. It may vary from provider to provider and depends on when the purchase transaction was made.
Some student credit cards come with a mobile phone app that sends you regular reminders about your repayment date, as well as how much you need to pay. These reminders can be helpful when trying to keep on top of your finances.
It can be a good idea to check your credit score before you make an application. As a student, you may not have a credit score yet, but if you’ve ever defaulted on a loan or missed a bill, this could impact your chances of being accepted.
Can a student get a regular credit card?
Yes, it is possible for a student to get a regular credit card, but it might be more difficult than getting a card for students.
Regular credit cards often have more stringent credit checks, when evaluating a person's income and credit history, to determine a suitable rate of interest and credit limit. Because students don’t always have extensive credit histories or substantial income, getting approved on a regular credit card (that typically has lower rates of interest and higher credit limits than student cards) could prove difficult.
Tips to consider when managing your finances as a student
Managing your money can be an important part of student life, and it all starts with setting a budget for the term. Your budget could consider your loan and any savings or income you have, minus your tuition fees, rent, mobile phone bills and any other regular essential outgoings for example. The amount left over might then need to cover your food, transport and other expenses for the rest of term.
Any borrowing you agree to, including a student credit card, needs to be managed responsibly. If you can’t repay what you owe, you could get into more debt, and this could damage your credit score.
FAQs
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?
Student loans aren’t subject to a credit check and do not appear on your credit file. The non-profit organisation that operates the service in the UK is called The Student Loans Company, and it doesn’t base its decision on income or credit ratings. This is also true if you’re an older student taking out an Advanced Learner Loan.
Which student credit card should I get?
This depends on your situation and how you’ll be using the card. Take the time to research and compare a few different options from the major banks. Pay special attention to the APR and any penalty clauses.
Can I withdraw cash using my student credit card?
Whilst it is possible to withdraw cash from most credit cards, this could negatively impact your credit score. Lenders are likely to inform the credit reference agencies that you have used a credit card to withdraw cash, which could reflect poorly on your credit file. It often comes with an additional fee and a higher rate of interest, so it might be worth checking your Ts & Cs and considering other options first.
Can students get a credit card without an income?
Yes. Compared to mainstream credit cards, the income criteria for student credit cards are usually more relaxed because you’re in full-time education. These products don’t normally need you to have an income, because they’re designed specifically for students. If you do have an income, you might want to consider looking into a non-student credit card. You might find this could offer better terms and conditions. For help with this, see our guide to applying for first-time credit.
Can I get a student credit card with bad credit?
Although you can get a student credit card if you have bad credit, it’s important to note that you may be subject to higher interest rates and lower credit limits because of your financial situation.
Although hard or soft credit checks will usually reveal if you’re eligible, be sure to read the terms and conditions when it comes to using the card. Before signing up to a card you have been offered, it might be worth making sure you’re comfortable with the repayments.
What happens to your student credit card after graduation?
If you’re responsibly enjoying the benefits of your student credit card, and want to keep it when you graduate, many reputable banks and lenders may automatically move your student credit card onto a normal credit card. Often with the same, or similar, credit limit and interest rate. However, in most cases, that will be your decision to make.
This lets you continue to responsibly use your credit, while building your score, without worrying about having to apply again or having your line of credit come to an end.
