Credit Cards for Students

University can be a fantastic adventure, full of new friends, epic outings, and memories to last a lifetime; however, there’s no denying that being a student can put a strain on your finances.
Course-related expenses, materials, transport, and general living costs can all add up.
Balancing a part-time job with your studies isn’t always possible, and even if it is, you might still find that your budget is stretched.

You might have wondered, ‘can I get a credit card if I’m a student?’. Perhaps you’ve considered searching for credit cards for students in the UK but are not sure where to start.
The thimbl guide to the best credit cards for students aims to answer some of those important questions you might have.

What’s the difference between a ‘standard’ credit card and a student credit card?

Student credit cards work in the same way as ‘standard’ credit cards, although some of the key features may be adapted for the specific needs of the customer. For example, student credit cards are likely to come with a lower starting credit limit to help you maintain good spending habits.

What is a credit limit?

A credit limit is the total amount of money that you’re able to borrow on your credit card. You should never spend more money than you need to or can afford to repay.

Who can get a student credit card?

Each credit card provider will have their own eligibility criteria that must be met before an application is made.
While requirements will vary between providers, you will need to:

• Be over the age of 18;
• Be a UK resident. Some providers may ask you to supply three years’ worth of address history; and
• Have some form of regular income.

Depending on the provider and product, you may also need to:

• Have an existing student bank account with a student credit card provider; and
• Prove that you’re a student.

Will my student loan count as income when applying for a student credit card?

This depends on the individual credit card provider. Some will consider your student loan as income, while others will not. You can always double check this with the credit card provider before you apply for a student credit card.

Which credit card is best for students in the UK?

What could be a good credit card for one person might not suit someone else.
Before you decide to apply for a student credit card, you should take the time to research all the options that might be available to you.

When searching for the best student credit cards in the UK, you may want to compare the different representative annual percentage rates (representative APR) of several credit cards as a starting point.
The APR reflects the annual cost of borrowing for that particular product. 51% of accepted applicants will be offered the advertised representative APR or lower. The APR you’re offered depends on various factors, including your credit score and personal financial situation.

How will a credit card affect my credit score?

When used responsibly, a credit card could help you establish and build your credit score.
You’ll need to make sure that you make at least the minimum repayment amount due on your balance each month. If improving your credit score is your goal, you should aim to stay well within your credit limit and keep your credit card utilisation as low as possible.

On the other hand, making late repayments on your credit card, or missing them altogether, will cause your credit score to decline. This could affect your chances of approval should you need to apply for credit again in the future.
In addition to this, you may also be charged late fees.

Credit checks for student credit cards

When you apply for a credit card, the provider will carry out a hard search on your financial history.
A hard search will remain on your credit file for up to 12 months. Undergoing multiple hard searches within a short period of time could have a negative effect on your credit score.

Some providers offer applicants the chance to check their eligibility for a credit card before making an application. An eligibility check will show you your chance of approval with no impact to your credit score.*
You should bear in mind that being pre-approved for a credit card does not guarantee acceptance.

What is credit card utilisation?

Your credit card utilisation is the amount of money you’ve borrowed shown as a percentage of your credit limit.
Let’s say your credit limit is £1,000 and the outstanding balance on your credit card account is £200. In this case, your credit utilisation would be 20%.

Is it hard to get a credit card as a student?

If you’re a student and you’ve never paid bills or borrowed credit before, it’s likely that you won’t have any credit history. This is often referred to as having a ‘thin’ credit file.
Ordinarily, a ‘thin’ credit file could reduce your chances of being approved for credit. With no indication of how you’ve managed credit in the past, providers may view your application as riskier.

However, student credit card providers will understand why an applicant may have a thin credit file and therefore could be willing to consider your application.

How does a student credit card work?

1. If you pass the provider’s affordability checks, they’ll send you a credit card agreement. You should read through this carefully and make sure you’re happy with the terms and conditions before you decide whether to sign and return. If you choose to go ahead, your lender will tell you when you can expect your student credit card to arrive, and you’ll be given instructions on how to activate it.

2. Use your student credit card to make small, affordable purchases if and when you need to. At the end of each month, you’ll be sent a credit card statement. Depending on your account settings, your statement could be sent in the post, by email, or via your online banking app.

3. Repay at least the minimum amount due on your balance each month. Where possible, you should try to make more than the minimum repayment amount. If you pay your balance in full and on time every month, you won’t be charged interest.

4. It’s important to make your repayments on time each month. Making late repayments or missing them altogether will damage your credit score. If you’re worried that you might forget, you could set yourself a calendar reminder or set up a Direct Debit.

Things to ask yourself before you apply for a student credit card

• Can I afford to repay any transactions I make using a credit card?
• Have I considered how I’d make my repayments if my financial circumstances were to change?
• Do I fully understand the implications of falling behind on or missing a repayment?
• Am I familiar with the process of how interest is charged, as well as the steps I can take to reduce the amount of interest I accrue?
• Is a credit card the best choice for me at this time?

What happens if I can no longer afford my credit card repayments?

If you’re struggling to make the monthly repayments on your credit card, you should contact your provider as soon as you can. They will be able to talk you through any options that may be available to you to help reduce some of the pressure.

Are you worried about money?

We understand how absorbing money worries can be, but it’s important to remember that help is available, whatever you’re facing.
Free, confidential money and debt management advice can be accessed through charities and organisations such as StepChange, MoneyHelper, Citizens Advice, and National Debtline.

Your university may also have a designated department for offering financial advice to students - ask your Student Support team to point you in the right direction.

*A soft search will only be visible on your credit file to you and the company that carried out the search and will not affect your credit score. A hard search will remain visible on your credit file for up to 12 months, and undergoing multiple hard searches within a short space of time could damage your credit score.