But if you’re thinking of taking out a student credit card, here’s what to be aware of first.
When you take out a student credit card, you’ll be given a credit limit. This is the maximum you can spend and owe on the card. Your credit limit will depend on a number of factors, including the provider and your financial history.
It’s important to know your limit and not to go over it – as this could affect your credit score and mean you may have to pay extra fees and interest.
You don’t need us telling you to be sensible, but be honest with yourself about how you might use your student credit card. Whether it’s for uni supplies, food or a round of drinks, you may find it tempting to spend more once you have the card. So make a plan for when you will and won’t use it.
You’ll need to pay back anything you spend on a credit card – and you don’t want to build up an amount of debt you’ll struggle to get rid of.
One of the most important questions when taking out a student credit card: can you afford to make the repayments? If you miss one, you could lose certain benefits or have to pay a late fee and this could affect your credit score.
With some student credit cards, you may have to pay the full balance each month, while others may only need you to repay a minimum amount. Paying back more than the minimum amount can help bring your debt down quicker. It can also reduce the amount of interest you pay, so it’s always worth trying to repay as much as possible.
Explore: Tips for paying off your credit card
While you may not have much of a financial history yet, that doesn’t mean you can’t start building a good credit score for the future.
A student credit card, used responsibly and with all repayments made on time, can make you more attractive to potential future lenders.
If you plan on using a student credit card to pay for something costing between £100 and £30,000, you’ll be protected under Section 75 of the Consumer Credit Act. This can be useful if a company fails to provide the goods or services agreed, for example, or if the goods or services were misrepresented.
