Everything you need to know about student credit cards
Key takeaways
Student credit cards often come with lower credit limits and higher interest rates than standard credit cards
Using a credit card responsibly and making repayments on time can help you build your credit history
Some cards offer perks such as cashback or rewards, and student credit cards often have no annual fee
You may still be able to get a credit card if you have a limited or poor credit history, although the cards available to you may have lower limits and higher interest rates
What is a student credit card?
A student credit card is a credit card aimed at students, including those who may have little credit history or a limited income.
Because students often have lower or less predictable incomes, providers may manage the additional lending risk by offering lower credit limits or charging higher interest rates than on some standard credit cards.
MoneySuperMarket data shows how much more expensive borrowing can be if you don’t clear your balance in full each month. The average representative APR for a student is 33.9%
As with other credit cards, the options available can include rewards or cashback, 0% purchase periods, cards designed for spending abroad and balance transfer offers. What you can get will depend on your circumstances and the lender’s eligibility criteria.
Am I eligible for a student credit card?
Being a student doesn’t necessarily stop you from getting a credit card. A lender will look at factors such as your income or regular money coming in, your existing financial commitments and your credit history before deciding whether to lend to you.
According to MoneySuperMarket data from the past three months, 34%
Eligibility rules vary between providers, but you’ll normally need to:
Be aged 18 or over
Be a UK resident
Meet the lender’s own income, affordability and student-status requirements
If you’re considering a credit card, make sure you can afford the repayments. Interest can build quickly if you regularly carry a balance rather than clearing it in full.
Personal Finance & Insurance Expert
Our expert says...
“Being a student often means juggling your finances and while you should always be wary of taking on more debt, used wisely a student credit card can offer advantages such as protection on purchases, loyalty points or rewards and a head start in building your credit rating for when you graduate.
"However, always be confident you have enough money available to clear your balance on time each month, or any benefits will be quickly wiped out.”
What do I need to consider before applying for a student credit card?
Make sure you can afford the repayments: Ideally, you should be confident you can repay what you spend in full each month. Otherwise, interest charges could quickly outweigh any rewards or other benefits.
Check your credit report: As a student, you may have a limited credit history simply because you haven’t borrowed before. Check that the information on your credit report is accurate and look at steps you can take to strengthen your credit history.
Think about which type of card suits you:
Rewards credit cards can give you cashback or points on eligible spending. Check where rewards can be earned and redeemed and whether any fees outweigh the benefits.
0% purchase credit cards can give you an introductory period when interest isn’t charged on purchases. You’ll still need to make at least the minimum repayment each month, and you should aim to clear the balance before the 0% period ends.
0% balance transfer cards can let you move existing card debt and repay it without interest for an introductory period. There may be a transfer fee, and you’ll still need to make the required monthly repayments.
Travel credit cards can be useful if you plan to spend abroad, as some charge low or no foreign transaction fees.
What are the most popular types of credit cards for students?
Of all the types of credit cards available through our site, it's credit builder credit cards that are the most popular with students, according to MoneySuperMarket data, making up 49%
This is largely due to their more generous acceptance criteria, which means that people with low or no credit scores are likely to be approved for a credit builder card, albeit with lower credit limits and higher APRs.
Card type | Percentage of MoneySuperMarket enquiries |
|---|---|
Credit Builder | 49% |
Purchase | 19% |
Reward | 8% |
Balance Transfer | 12% |
Balance Transfer and Purchase | 8% |
Travel | 4% |
Is a student credit card or a student overdraft better for me?
Students often benefit from overdrafts which charge no interest, so before applying for a credit card, it’s worth looking at your current account. If you’re looking for short-term borrowing, which you can afford to repay, an overdraft is likely to be a cheaper option.
However, you won’t benefit from the extra perks of a credit card - such as cashback or rewards - or the purchase protection offered. This is where a credit card trumps a student overdraft, but only if you can comfortably repay it. As soon as you start paying interest, any extra benefits are wiped out.
What are the pros and cons of a student credit card?
There are several reasons you may wish to get a student credit card.
Advantages
Interest-free period: Some providers offer an interest-free period for a limited time for purchases – normally a few months, giving you some time to pay off the balance. But make sure you know when this period ends so you pay off the outstanding amount, or interest charges will mount up.
Protection on purchases: Credit cards can give you additional legal protection under Section 75 of the Consumer Credit Act. If an individual item or service costs more than £100 and up to £30,000, the credit card provider may be jointly responsible with the retailer if there is a breach of contract or misrepresentation.
Build your credit score: Managing your student credit card repayments can help you build your credit score, particularly if you haven’t taken out credit before and have a limited borrowing history. This can make it easier to get credit in the future.
Rewards: Some providers offer rewards when you spend, including cashback, loyalty points or cheaper railcards. Used wisely, you can make a student credit card work financially for you.
No annual fee: Many credit cards aimed at students don’t charge an annual fee, but always check the card’s fees and terms before applying.
Spread the cost of purchases: You can pay for large purchases up front and spread the cost by paying back the money you borrowed in monthly repayments. However, unless your card is within its interest-free period, you will likely end up paying more in interest.
Higher chance of approval: While you are studying, you may find it’s easier to get a student credit card than a standard credit card.
Disadvantages
Potential high interest rates: Student credit cards can have higher interest rates than standard credit cards. It means you’ll end up paying more if you don’t clear your balance each month.
Lower credit limits: You’ll typically have a low credit limit on a student credit card. But this is a way to protect you from overspending and getting into debt.
Fees: As with regular credit cards, you will most likely be charged a fee if you use your student credit card to withdraw cash from a cash machine, if you make a late repayment, if you go over your credit limit or if you use your card abroad.
Applications leave a record on your credit report: Applying for a credit card normally involves a hard credit search, which other lenders can see. Several applications in a short period can make it harder to get credit. Using an eligibility checker first usually involves only a soft search and won’t affect your credit score.
Potential for overspending: A credit card can encourage you to spend more than you need to, or more than you have. This can result in getting into debt.
How to apply for a student credit card
Check your eligibility
Before applying, check the card provider’s eligibility criteria. You’ll normally need to be at least 18 and resident in the UK, while individual lenders may also have requirements around your student status, income and affordability.
Using a free eligibility checker can show you which cards you’re more likely to be accepted for without affecting your credit score. This can help you avoid making unnecessary applications.
Compare student credit card deals
Compare the APR, credit limit, fees and any introductory 0% periods or rewards. Remember that the deal you receive can depend on your individual circumstances, so focus on a card you can comfortably manage rather than rewards alone.
Apply
When applying, double-check that your personal and financial details are accurate. Depending on the provider, you may be asked for information such as:
Your full name, address and date of birth
Details of your university or course
Your income or other regular money coming in
Your existing financial commitments, such as rent, bills or other debts
Some applications can be decided quickly, while others may take longer if the lender needs to carry out additional checks.
Activate and use your new student credit card responsibly
Once your card arrives, activate it and consider setting up spending alerts and a Direct Debit so you don’t accidentally miss a repayment. If you can, pay the balance in full each month to avoid interest.
Frequently asked questions for student credit cards
How do I use my student credit card?
A student credit card can be used in the same way as a debit card – you’ll be able to pay for things in the usual way such as contactless, chip & PIN or online. As well as the physical card you may also link the credit card to pay through a device, such as a mobile phone.
The difference with credit cards, compared to a debit card, is that you are spending money you don’t yet have. This means it’s important to keep an eye on your spending (you’ll have a credit limit you can spend up to) and make sure you pay it off when instructed.
If you don’t pay it off in full by the given date every month, you’ll start to incur interest on the debt balance. Forget to pay anything or miss the minimum monthly repayment and you’re likely to be charged a fee. This is why it’s good to set up an alert as a reminder, or better still a direct debit to clear what you owe.
Can I get a student credit card without any income?
You don’t necessarily need a full-time job to get a credit card as a student, but lenders will need to be satisfied that you can afford the repayments.
What a provider accepts as income or regular money coming in varies. This could include earnings from part-time work or other regular financial support, depending on the lender.
Check the provider’s eligibility criteria before applying and use an eligibility checker where possible.
Can I get a student credit card with bad credit?
You may be accepted for a student credit card with a bad credit score or impaired credit history, but you’re likely to be given a lower credit limit and face higher interest rates. This is because the card provider will deem you as being of greater risk.
Credit card providers take into account your credit rating when they issue a card, and this helps them decide how much credit they are prepared to extend to you.
The good news is that there are ways you can increase your credit score. These include registering on the electoral roll, shutting down unused credit accounts and checking your current rating and fixing any errors.
Can I get a student credit card with no credit score?
If you have little or no credit history, you may still be able to get a credit card. However, you could be offered a lower credit limit or a higher interest rate because the lender has less information about how you have managed borrowing in the past.
You can start building your credit history by making repayments on time, keeping your credit report accurate and, if you’re eligible, registering to vote.
What are the alternatives to student credit cards?
An alternative to a student credit card would be a student bank account with an overdraft. Most student current accounts offer 0% interest and fee-free overdrafts.
How much you can borrow on your overdraft will depend on how far you are through your studies (what academic year) and your personal and financial circumstances.
What happens to my student credit card after I graduate?
You’ll still be able to use your student credit card once you graduate.
But if you’ve managed your student credit card well you may be able to get a credit card that offers a lower interest rate, 0% interest on purchases or balance transfers, cashback or rewards.
Once you have a job with a regular salary you’re likely to have a much wider choice of credit cards.
Can I get a student credit card with no credit score?
You may be accepted for a student credit card with no credit score, but you’re likely to be given a lower credit limit and face higher interest rates. This is because the card provider will deem you as being of greater risk.
Credit card providers take into account your credit rating when they issue a card, and this helps them decide how much credit they are prepared to extend to you.
The good news is that there are ways you can increase your credit score. These include registering on the electoral roll, shutting down unused credit accounts and checking your current rating and fixing any errors.
Compare student credit cards with MoneySuperMarket
You can use MoneySuperMarket’s eligibility checker to compare credit cards you’re likely to be accepted for. Tell us what you want to use the card for and provide a few details about yourself and your finances, including any regular income you receive.
Checking your eligibility won’t affect your credit score because it uses a soft search. If you decide to make a full application, the lender will normally carry out a hard credit search, which will appear on your credit report.
If you already have a student current account, it may also be worth checking whether your bank offers credit cards to eligible customers and comparing these with the other cards available to you.
MoneySuperMarket is a credit broker – this means we’ll show you products offered by lenders. We never take a fee from customers for this broking service. Instead, we are usually paid a fee by the lenders – though the size of that payment doesn’t affect how we show products to customers.
Author
Tim Heming
Personal Finance Expert
Tim Heming is a journalist and editor who has written about personal finance for national newspapers and consumer websites for 15 years. Tim enjoys providing no-nonsense information to help consumers...
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Alan Cairns
Senior Content Editor
Alan breaks down money, home, and energy topics into plain English to help you save money. Ask him about pound cost averaging or Balkonkraftwerk.
