We look at the top credit cards available to students, and better alternatives if you need to borrow money.
Being short of cash is part and parcel of student life.
A credit card can provide extra breathing space if you’re waiting for your student loan to come in, or on a paycheque.
However, a student credit card isn’t the best way to borrow – and used wrongly could end up becoming seriously expensive.
In this article, we look at the best student credit cards, how to use them, and other ways to borrow.
The best student bank accounts 2018/19
Why can’t I get any credit card?
The bad news is you’re unlikely to be eligible for any of the flashy platinum, interest-free, cashback or travel cards you see advertised.
That’s because these cards are restricted to those with a good credit rating.
A credit rating gives lenders an idea of how trustworthy you are. If you’re 18 you’re unlikely to have much of a credit history at all, meaning it’s much more difficult to borrow at all.
Getting a student credit card and paying it off in full every month is a good way to build your credit rating so you qualify for better cards in the future.
There are other ways to improve your credit rating: find out more here.
Student finance: how to make your maintenance loan last longer
A credit card isn't the best way to borrow
The best way to borrow money as a student is by using the interest-free overdraft on your student bank account.
If you haven’t got a specialised student bank account – which is different from any accounts you had as a child – you should get one now.
With some accounts, you could borrow as much as £3,000 without paying any interest. In comparison a credit card interest rate is around 18.9% and you are likely to be limited to borrowing £1,000 or less.
Some bank accounts also have perks including Amazon gift cards, free 16-25 rail cards and cashback. Furthermore, most banks only offer student credit cards to holders of their student bank accounts.
You can find our guide to the best student bank account here
Always pay it off
A student credit card can help you build your credit rating, as well as providing an emergency source of funds if you use up your overdraft.
You should always pay off the balance in full every month, which helps your credit rating and means you won’t ever pay those expensive interest rates.
When applying, you can set up a direct debit to pay off the full balance. Alternately, set up a diary reminder so you remember to pay it off each month.
Never use your credit card to withdraw cash – this wrecks your credit rating – and avoid using it abroad (with the exception of Tandem’s card – see below).
The one useful area to use credit cards is for purchases over £100. You’ll receive a special type of protection in case things go wrong – find out more here.
Student-specific cards
You’re most likely to be approved for these cards, although they don’t have much in the way of perks.
Note that all are restricted to holders of student bank accounts at the banks that offer them, and usually require you to have held the account for a few months.
|
Credit Card |
APR |
Credit limit |
Notes |
|
TSB Student Mastercard |
19.9% |
£1,000 |
You must have a regular income and be a TSB student account holder |
|
18.9% |
£500 |
For HSBC student account holders only |
|
|
18.9% |
£500 |
For Natwest student account holders only |
|
| RBS Student Mastercard | 18.9% | £500 | For RBS student account holders only |
Although TSB’s card offers a higher credit limit, the requirement to have a regular income (other than your student loan) makes it more difficult to get.
Student loans: tuition fees, maintenance, grants and repayment plans explained
Best options if you’ve got an income
If you’ve got a part-time job than your options multiply.
Bear in mind that many of these cards are ‘credit builder’ cards and the interest rates on them can be very high – sometimes even twice the rates for the cards above. You may be offered a higher rate than advertised.
That’s why it’s crucial you pay them back every month.
|
Credit Card |
APR |
Credit limit |
Notes |
|
24.9% |
At least £150 |
You must have an income of £6,000+ before tax |
|
|
27.5% |
At least £250 |
You must have an income of £5,000+ before tax |
|
|
24.7% |
At least £250 |
APR could be as high as 63.9% |
The Tandem Journey card is great for travelling as it offers fee-free spending and cash withdrawals abroad, which could save you a surprising amount.
Tesco’s Foundation card allows you to earn Clubcard points for almost all transactions, which can then be redeemed at Tesco and elsewhere.
Postgraduate student loans UK: how much, how to apply and when you'll repay
Improve your credit score
Holding a credit card and regularly paying it off is a great way to improve your credit score, but there are others.
Some are free, such as registering to vote: we've put together a full guide here.
Check your credit report periodically to see if your credit rating is improved. Once it has, you should be able to apply successfully for the more competitive cards out there.
Some credit builder cards offer free access to credit score services, including Barclaycard Initial and Tesco Bank's Foundation Card.
Alternately, ClearScore is a free service which gives you your credit rating, provides personalised product offers and coaches you on how to improve your credit rating.