Getting the Right Student Credit Card

 

Student credit cards offer UK students a great way to ensure they are protected from sudden calls on their already stretched finances (especially when compared to the prohibitively high interest rates incurred by short term/payday loans). Cards suitable for students are offered by a number of UK credit card issuers, and thus getting the right one for you will take a little research.

All student credit cards have slight variations, but they are common in certain key respects. In terms of the credit score required to acquire one, there is an understanding on the part of the credit card issuers that the student credit card is likely to be amongst the first credit that the individual applying will have, so they are unlikely to have built much, if anything, of a credit score. Of course, when credit card issuers take a risk on a customer (risk being understood in terms of the track record an individual has/or hasn't of well managing credit) they reflect that risk in the interest rates they apply to products, therefore student credit cards tend to have higher interest rates than you might expect from some other credit card products. Student credit cards also reflect the additional risk of bad debt and default an issuer might expect through the level of indebtedness they will allow an individual to put themselves at, so credit limits are kept sensibly low to reduce exposure.

Using Student Credit Cards

Because of the high interest rates student credit cards charge, it is unwise to use them for prolonged borrowing, especially given that students can access credit in a number of ways that are comparably cheap versus products available to other consumers in the open market. Student credit cards are best used to help defend against sudden financial shocks (those expenses which couldn't be planned for), and times when you know you have the funds available to cover the balance in full, but wish to benefit from the additional purchase protection a credit card offers compared to other payment methods.

If you aren't in full time education, or have already built a credit score, you might find you are better off looking outside the student credit card space. In fact, there are many great deals and offers not available to student credit card holders that you might benefit from, so be sure to do your homework and look at all the UK credit cards to get the right product for your circumstances.