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Student credit cards

Written by Jafar Hassan, Content editor

28 March 2018

If you're at university, it may be worth getting a credit card to help with your day-to-day finances – find out if a credit card is right for you

Student credit cards

Student credit cards can be useful while you're at university, but they aren't the right choice for everyone.

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We weigh up the pros and cons to help you decide if a student credit card is the right choice for you.

Advantages of credit cards for students

A student credit card can be a good way of paying for things while you're at university – you can get up to 56 days to pay off whatever you spend on it before you have to pay any interest.

Also, credit cards for students have a low credit limit (usually around £500) so that you can't get into too much debt.

Some student credit cards come with exclusive discounts which can help you to save money while you're studying.

By using a credit card instead of a debit card, you get protection under Section 75 of the Consumer Credit Act, which means if you pay for something costing over £100 on your credit card and something goes wrong, the credit card provider will be able to give you a refund.

Additionally, if you use it the right way, a student credit card can help you to get into good payment habits, and build up a good credit rating for when you leave university.

Disadvantages of student credit cards

There are numerous advantages, but there are some things to consider before applying for a credit card.

After the initial interest-free period, you'll have to pay off a set minimum amount and start paying interest on the rest of your balance too – which can get expensive.

Student credit cards don't come with the 0% deals on purchases or balance transfers you get with standard credit cards, so they're not a good idea for borrowing in the longer term.

Moreover, the monthly minimum repayments on student credit cards are usually higher than those of standard credit cards.

Alternatives to a student credit card

If you're looking for ways to borrow money to fund yourself while you're at university, then a student loan should always be your first port of call.

Another way of borrowing money is with a student bank account. The biggest benefit of a student account is that most come with an interest-free overdraft.

The interest free amount usually increases for each year of your degree. After you graduate, you have to start paying interest on some or all of whatever you've borrowed, but they're still a great cost-effective way to borrow while you're at university.

If you want the convenience of a credit card, then a prepaid card could be a good alternative. You can compare prepaid cards with Uswitch.

Prepaid cards work like credit cards, except you pre-load money onto the card (a bit like topping up a pay as you go mobile phone), so they're a great way to pay for things in shops and online and there's no way you can get into debt.

Compare credit builder cards

Find a credit card designed to help you improve your credit rating.

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