Student Credit Cards
Don’t start your new college year with a boom or bust attitude. Living by a budget is the smartest lesson of all and using a credit card can help you to do this.
More from Types of Credit Cards
7 January 2009
Student Credit Cards
There is no point in splurging on a card and buying stuff you think you need without making a financial plan.”
Learning by degrees
A recent survey conducted by the National Union of Students (NUS) and HSBC released in August 2008, has found that prospective students tend to underestimate their spending, compared to current students.
The average weekly underestimate was just below £20 which blow a major hole in the month’s budget.
Financial products such as a student credit card can help with juggling and managing finances but it could be tempting to open one up and use it without thinking about it.
There is no point in splurging on a card and buying stuff you think you need without making a financial plan. This may cost you more in interest payments in the long term, especially if you can’t pay for your purchases quickly enough.
It all sounds a bit grim especially as starting a new college or a new term should be an exciting time. But by taking control of your finances from the start you can concentrate on the more interesting aspects of student life.
All sorts of perks come with student credit cards but the most sensible thing to do is to look at the market, work out what your needs are and see what card best fits your profile.
What to look out for
Low interest rates, and/or 0% on purchases and balances.
No annual fee.
The types of rewards or incentives that are being offered – are they relevant to you?
An understanding by your credit card provider that you are a student and what your needs are; e.g. ease of use, and easy to understand terms and conditions.
Card security.
A competitive interest rate, if you on a 0% period and when it expires.
How do I get a card without a regular income?
Student credit cards have been designed for students on the understanding that there is no regular income. However in some cases, the APR can be higher to make up for this and it is essential to shop around to gain the best rate of interest.
You may also consider regular credit cards such as cashback cards or life of the balance cards that have a low interest rate. Make a call to a provider who is offering a good interest rate about whether you could be accepted for one of these alternatives.
If you are going to use a credit card, shop around for the best offers, such as a limited period of 0% on spending. Once you have identified which credit card is best, you can identify what you need to facilitate your student life and then budget accordingly.
The perks
Card providers often offer free book or record tokens, discounts in shops and even travel discounts when you open up an account. These can be useful but, boring though it is, weigh up the value of these discounts against the value of a good interest rate.
A card offering both is a good bet!
Your NUS student card also offers discounts so check the details on this to make sure you can advantage of all that is on offer.
See also prepaid credit cards
