Two universities make credit card education priority

By Ian Halstead

Many British students head off to college or university without understanding the basics of using credit cards. After all, if you've been living off the Bank of Mum and Dad for years, there's never been a pressing reason to think about managing your own finances, much less a credit card. But two universities are working to implement credit card education for incoming students, with hope that others will follow their lead.

Personal finance has never been on the pre-university education radar. Now, after years of campaigning by education watchdogs, politicians and consumer groups, the national curriculum includes personal finance. But while the Department of Education offers guidance on student loans, debts and repayments, it says not a word about credit

Fortunately, some higher education providers -- most notably the University of Birmingham and Birmingham City University (BCU) -- are beginning to take credit card awareness very seriously. Francesca Coxon, who manages the University of Birmingham's Student Funding Office, says youngsters managing their own finances for the first time need guidance, not least because they can take out credit cards without parental involvement.

"As a university, we have no standard advice on the use of credit cards. Every student has a welfare tutor, who they can discuss anything with, but I felt we should offer more detailed guidance on the issue," Coxon says. "I set up a series of workshops on issues around budgeting and what might be called 'financial health', but although they are usually well-attended by international students, trying to reach students from this country is quite tricky."

Coxon also won university finance to create an online game, Cash Clever, aiming to get crucial financial messages about credit cards, overdrafts and funding across in accessible fashion.

"It's only in its early stages, but feedback has been very positive and we hope it will gradually increase financial awareness among students," Coxon says.

However, Coxon is concerned that some freshers arrive with high levels of debt already on their cards.

"It is still a small percentage, but a very worrying trend, because it didn't happen until the last year or two," she admits. "I regularly visit colleges and universities in the United States. For various reasons, there is much more financial counselling for students there, and I think we could learn from that system."

Across town at BCU, student finance adviser Sharon Atkinson takes a proactive approach to credit card awareness by speaking to students and their families before the start of term to alert them how to choose and use credit cards.

"We find that once they arrive at university, banks bombard them with all sorts of offers, so they need to consider what to look for in advance," Atkinson says. "We never recommend a particular provider, but we do identify what we see as the best features to look for, especially a 0% overdraft."

Atkinson says she also reminds students that banks want them as long-term customers, so they should always try to negotiate additional benefits. She says more often than not, parents are appreciative that someone is taking the time to discuss credit with students before they start their studies.

"I like to think all the work we do before students come here helps reduce the potential for future problems," Atkinson says. "We aren't yet seeing more than a few students coming to us with major card issues, although of course, it may be that others deal direct with their providers, or through their families."

See related: Should kids and credit cards mix?, Your guide to student finance

Published: 29 August 2014