Credit cards

Credit cards allow you to make purchases using borrowed money. You have about 45 days to pay the money back otherwise you are charged interest.

There are several different types of cards, each offering a unique benefit over the others, which is why it’s important for you as a student to think about how you are going to use your card before signing up to the first one that comes your way.

Here are some of the different card types you can get as a student:

Introductory interest free rate on purchases
Some cards offer a period of 0% interest on your purchases, so you can shop now and won’t be charged interest until the period runs out. But be careful as you don’t want to end up with a big credit card debt in six months’ time.

Low standard interest rate
By opting for a low interest rate you will be charged less interest on your balance. This is a preferable option if you think you won’t pay the balance off in full each month.

Cashback
If you pay the balance off in full each month, you don’t have to worry about the interest rate. You can get cashback, which gives you a percentage of what you spend back.

Some banks will let you have a credit card even if you don’t have an income.

It’s tempting to live on credit when you are a student but try to resist. Credit cards usually charge a high rate of interest and you don’t want to graduate with thousands of pounds of debt.

Credit cards are never a good idea if you have no means of repaying the money. Once you have one, the temptation to use them can be too much to resist, especially when money is tight. But they are undoubtedly useful for things such as online purchases, which is where a prepaid card might be more handy. Find out more about prepaid cards and whether it can work for you.