A Guide to the Best Student Credit Cards - 2017

A Guide to the Best Student Credit Cards - 2017
Written by Mark Grimley
Published on 20th September 2017
Updated on 19th January 2022
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Searching for a student credit card? Look no further - we’ve tracked down 7 of the best student credit cards in the UK. So what are the things you should know about student credit cards? We explain everything and find out why a non-student credit card might actually be a better option.

What you should know about student credit cards

What are the advantages of student credit cards? If you have no income except for student loan payments, it’s very unlikely that you’ll be approved for a regular credit card. Even if you’re successful in applying, you’ll probably be given a low limit and sky high interest rate. As such, a student credit card could be a better way to borrow money and build up your credit score. Although you’ll probably pay a higher APR than on a good credit card from the high street banks, this is more beneficial than applying for a standard credit card, being rejected and having this impact your credit score.. Unsuccessful applications for credit cards can lower your credit rating, especially if you apply for more than one at the same time.

Advantages of student credit cards

If you’re searching for a good cashback offer or treats to sweeten the deal, student credit cards probably aren’t the best place to look. These cards tend to be stripped back to the essentials, although one or two do offer cashback and others have up to 3 months of the 0% introductory rate.

If you use a credit card on purchases over £100, you’re covered by the Section 75 protection, so if anything goes wrong with the product, you can claim from the credit card provider.

Another big advantage of using a student credit card is building up your credit rating, which can help you get a better bank account, rent a flat or even apply for a mortgage after uni. It’s also important to remember that using a credit card can help you learn how to manage your money. However, you must make the minimum payment each month, or you could end up with a worse credit score, as well as being hit by late repayment fees.

If you want a card to help you with money management, you might be better off going for a prepaid credit card. With new providers like Monzo, you can get some fantastic tools to manage your money from your phone. If you have a prepaid card, it’s also easier to avoid getting into debt, as you can only spend the money you put on it.

Things to look out for when choosing your student credit card

There are three different types of credit card available for students from mainstream banks and building societies.

Type: Cards for existing customers of a bank.

Providers: Bank of Ireland, HSBC, Natwest, RBS, TSB, Ulster Bank

Summary: If you’ve got a bank account with any of these banks (and you’ve been with them a few months), then it might be worth taking a look at these credit cards. However, it’s worth bearing in mind that unless you have a good credit score, you might not be approved.

Type: Cards for students with a regular income from employment.

Providers: Halifax, Lloyds, TSB

Summary: If you’re earning a regular income from a second job, or you’re a part-time student with a part or full-time job, you may be eligible for these cards. However, even the banks suggest that you’ll probably get a better deal with their non-student, regular credit cards.

Type: Cards with low borrowing limits and strict credit checks.

Providers: Bank of Ireland

Summary: There is one mainstream bank in this category, which offers credit cards to students with a good credit record, even if they’re not a customer. However, you’ll have to produce 6 months of bank statements to support your application.

Student credit cards are generally for people with a good credit rating. Not sure what your credit score is? You can sign up and get it online for free - the video below will help point you in the right direction. If you’ve got a credit score of ‘fair’ or below, you might struggle to get a student credit card. Your best option could be borrowing money from family or a friend - you can read about alternative ways to borrow with bad credit in our jargon-free guide. It might also be worth looking into credit cards for people with poor credit, like the aquis credit card.

The best credit cards for students

Want to compare credit cards for students? We’ve reached out to the leading banks and building societies, to find the top deals. The Choose Wisely comparison table below shows you the best student credit cards 2017 in the UK:

Up to £1000
Need an income
Up to £500
Cashback from Visa Offers
Bank of Ireland
Up to £350
3 Months at 0%
No student cards
Need an income
Up to £500
56 Days at 0%
Up to £500
56 Days at 0%
NB: Some lenders did not provide a limit and/or APR. Details correct as of 13/9/17.

So it seems that the best student credit card for you will depend on who you bank with and whether you have an income. If you already have a student bank account with HSBC, Natwest, RBS, TSB, Bank of Ireland or Ulster Bank, then you may be eligible for your bank’s own credit card.

If you’re earning money alongside your course then technically you can also choose from student credit cards with Halifax, Lloyds and TSB. However, a Halifax rep recommended that students with an income should have a look at non-student credit cards, which offer better value. If you have a good credit rating, this is probably your best chance of getting a lower APR, higher limit and/or cashback offers.

A Barclaycard representative stated that applicants for a Barclaycard need to be employed and students wouldn’t be accepted.

Credit card jargon buster

How does a credit card work? The world of credit cards is so complex that it’s impossible to keep this article completely jargon-free. So we’ve written a handy jargon buster to help you out.

0% introductory purchase rate: During the 0% introductory period (which starts when you take out a card), you won’t be charged interest on any outstanding balance. You may still be required to make a minimum payment each month.

Balance transfer: Have you already got an outstanding balance on a credit card, or another form of debt, such as a loan? Balance transfer cards let you shift your debt onto this special type of credit card. However, even with 0% interest offers, you’ll usually be charged a fee for the transfer, so check how much this will cost you before applying.

Interest: This is calculated as a percentage of your outstanding balance per year and it’s usually charged monthly. In simple terms, 100% interest on a debt of £100, means that after a year the interest payments would reach £100*. In the real world, interest would usually be less than this. Each monthly repayment reduces your debt, which reduces the total on which you’re charged interest - 100% of £50 is less than 100% of £100. Confused? The Money Advice Service have written a handy article that could help.

Limit: Your borrowing limit is the maximum amount you can borrow from the credit card provider. This may be less than the advertised ‘Up to…’ amount, especially if you don’t have a perfect credit score.

Outstanding balance: The amount of money that you’re currently borrowing from the credit card provider, shown on your statement. Interest is usually charged on your outstanding balance each month.

Rep APR: The estimated cost of borrowing money \(interest + fees). In simple terms, 100% APR on a 1 year loan of £100 would mean you would need to repay £200 by the end of the year*. But for credit cards, you might pay no interest if you pay off your balance in full each month - check your terms and conditions.

* If the debt was not repaid, and no fees were charged for non-repayment.

Take care when using your credit card

Using a credit card is a great way to improve your credit score, but only if you pay it off in full and on time. You’ll be required to make monthly minimum repayments, which are a set amount of the outstanding balance. If you miss one of these repayments, you may be charged a fee and the error will show up on your credit file. Avoid spending any money on your credit card unless you are confident you can pay it off on time.

Credit cards are a great way to buy something big and pay it off slowly. They’re not suitable as a way of paying for nights out, rent or bills. If you feel like you need help with paying rent or bills, it’s a good idea to cut back on unnecessary expenses like alcohol, cigarettes or meals out. If you’ve cut back and are still struggling, speak to your student union, as a hardship fund may be available for students who are at risk of falling into debt. Already in debt and feel like you can’t get help? Speak to debt advice charities for free - a full list can be found in our guide to borrowing with bad credit.

Tips and tricks to make the most of your credit cards

OK, so you’ve sent off a successful application, but how do you manage your credit card? If you’re making the monthly minimum repayments and you’re past the 0% introductory period, you’ll be spending a large amount on interest each month. It’s better to pay off the full balance at the end of each month, if possible, to avoid getting hit by the cost of interest. If you keep up the repayments over time, you may be offered a larger credit limit.

Even the best interest-free credit card for students won’t give you a long 0% introductory period, but you can still get good value. To build up your credit score, you could pay for medium to large purchases with a credit card and then pay off the outstanding balance before the end of the month. There’s the added advantage that the Section 75 protection kicks in for purchases over £100. This protects you from fraud and helps you afford repairs, or avoid costs from a retailer going bust, cancellation of an order or non-delivery.

Find a student bank account

Looking for a bank account? Have a look at the Choose Wisely comparison table to get a great deal.

Mark Grimley
Written by
Mark Grimley
Head of Partnerships & Take Control Author at Choose Wisely

Mark joined Choose Wisely in 2015. He continues to work in close contact with the providers, brokers and journalists operating in the world of consumer credit.