Student Credit Card

superlukeyboy

Apologies if this is in the wrong section, however I'm a student so thought it would be best suited here for other alike.

I'm looking at getting a credit card to keep me ticking over till pay day at the end of the month. It's not something I've ever really wanted to do but having had a little look around the site it appears that there are more to credit cards than just massive debts accumulating!

Anyway, I was wondering if any companies did credit cards aimed at students? Perhaps with longer time limits before charging on what you've paid for etc? I'm just trying to find the best card for me but to be honest am finding it all pretty confusing.

Thanks

FreheitOverture

Natwest tried to flog me one when I was in there last.

Personally I would avoid them at all costs. No point spending money you dont have

superlukeyboy

okay thanks, i'll look into it.

but with credit cards don't you get protection as well as other benefits if you use your credit over your debit card?

DrScotsman

Can I just get this right, you're a student. You have a job, you should have a student loan and you should have a student bank account with an interest free overdraft.

If you don't have an interest free overdraft, then you almost definitely don't even have a student bank account! These are invaluable, see Martin's guide.

If you do have one and you're still struggling, then it sounds like you're spending more than you earn and probably ought to read the articles on this site about how to curb that. Borrowing to maintain your lifestyle is bad borrowing, although if it's interest free borrowing then you have lots of time to reverse it before you do any damage. Of course that doesn't mean you shouldn't get a credit card if you'll never pay interest on it, so read on:

There are student credit cards, although I'm not sure if it's a good idea to try to get one from a bank other than your own. However you say you're already confused and with my bank, they seem to use student credit cards as a way to confuse people MORE (see my rant here.) Also the only benefits they have over normal credit cards are random freebies and a higher probability of acceptance - not that you shouldn't consider these of course. They may offer differences in the interest free period (e.g. Natwest is 56 days, Halifax is 59), but I'd hardly choose a card for this.

superlukeyboy wrote: »

but with credit cards don't you get protection as well as other benefits if you use your credit over your debit card?

Well yes, but I presume FreheitOverture either meant just avoid using them as a loan for more than the interest free period, or he thinks you might be tempted to splash on it. I like to believe people aren't tempted so easily, so by all means get a credit card just for the protection.

Your first port of call should probably be the bank you have your student account with. However if it's a Mastercard, it'll only give you section 75 protection (strong protection on purchases between £100 and £30000). If it's a VISA, it'll give you that and Visa Chargeback (not as strong protection on all purchases). So if you're obsessed about protection like me, Capital One Classic is amazing. It's a VISA, it gives you some ID fraud protection, it gives you 2 free credit reports a year, and the interest rate is terrible so you'll almost definitely get accepted. Don't even think of ever using this card for borrowing though.

superlukeyboy

Thanks very much DrScotsman, that was really helpful.
I don't really have a steady job, more like a lot of casual work but I do have a student bank account which I've managed to max out the overdraft on. It's definitely been my lifestyle which has put me in this position but I can say that there's no way I'm ending up in this position again! Been an absolute nightmare so I have no desire to get stuck again, the lifestyle change has begun and it's certainly doing me better!
studentbeans.com also recommends the Capital One Classic so for you to confirm that has made my mind up for me, I think I will be getting one of those today. Thanks again

The_One_Who

Try your own bank, since they'll usually give you one with very few questions asked. The interest rates will be horrendous, but if you set up a direct debit to pay of the full balance at the end of every month then you'll never pay any interest.

Credit cards are excellent as long as you use them sensibly.

DrScotsman

No problem superlukeyboy. What Martin says is right, students are educated into debt but never about debt, so I feel all students are owed a lot more advice than they get.

Sorry if I'm telling you something you already know (and what The One Who mentioned as I was typing up this post), but about the Capital One card: You'll get the card with a sticker on it telling you a number to phone up to activate it (most credit cards have this). Among other things, they'll ask you if you want to set up a direct debit to pay off the card - for the minimum amount. Be perfectly clear and say you want to set one up for the FULL amount - unfortunately you cannot do this online so you are relying on the person at the call centre, which with Natwest was a mistake for me, as they did not change this from minimum to full for me.

If you tell them to do full and they ignore you, although with a fight you will probably get any lost money back, it's easier to prevent this from happening by checking on your first billing date the full amount has been taken (with online banking, mini ATM statements, etc.). Sorry if I sound paranoid, these are just precautions; there's a 95% chance you'll be okay.

MrsManda

You can get student credit cards alongside most student current accounts.
They usually have a slightly higher APR but you should be able to get one with little or no previous credit rating.
Please make sure you can pay it off in full every month, that way you don't pay any interest nor do u get into piles of debt. A direct debit for the full amount is the best way to do this. It'll give you a credit rating which will useful when you leave uni and want a mortgage (as an example). Use it for buying things online/big items (providing you can afford them without resorting to credit) as you get some protection if the company goes bust.

MadeInTheDark

As others have said, make sure you pay it off in full each month & see whats on offer primarily at the bank you have your student account with.

I took HSBC up on their offer for a credit card to go with my student account, it was a mistake in my case. Althought the limit was only something like £250 a month I still managed to get into considerable debt by only paying the minimum amount each month, whilst the bill and interest piled up.

The temptation of just having the card caused me to use it for non-essential things. Psychologically, I used it for the sake of it, because it was there, and I blocked out from my mind the growing bill, very silly. I had enough debt with my overdraft and student loan so adding a credit card into the mix was dangerous. I guess I had no self control! But I don't think that students are the best people for credit cards, things can easily go wrong.

I paid off the debt, it ate into much of my wages chopped up and cancelled the card. I'm now a reformed (and poor) masters student living within my means which isn''t as fun but I don't have to worry about the wolf at the door!

If you're going to get a credit card, get one with a low limit and only use it if you're 100% confident that you can pay the bill at the end of the month, once your paypacket comes through. You've really got to be responsible with a credit card, if you can be, then great, but don't make the mistakes I did!;)

rb10

superlukeyboy wrote: »

I'm looking at getting a credit card to keep me ticking over till pay day at the end of the month. It's not something I've ever really wanted to do but having had a little look around the site it appears that there are more to credit cards than just massive debts accumulating!

I don't know that a credit card is what you are after. From what you say, it sounds like you are currently spending roughly the same amount as you earn each month. The problem is that you are spending it before you are paid, e.g., say your salary was paid on the last day of each month, you are in effect spending your March salary during March.

You would find it works better if you can switch this around. So your salary goes in the bank on 31st March, then spend it during April. That way you don't rely on credit cards, a much safer way to be.

To get from where you are now to the state of spending after you are paid will take a while. Try to reduce your monthly spend over the next few months, so that you can catch up with yourself.

Fire_Fox

superlukeyboy wrote: »

Thanks very much DrScotsman, that was really helpful.
I don't really have a steady job, more like a lot of casual work but I do have a student bank account which I've managed to max out the overdraft on. It's definitely been my lifestyle which has put me in this position but I can say that there's no way I'm ending up in this position again! Been an absolute nightmare so I have no desire to get stuck again, the lifestyle change has begun and it's certainly doing me better!
studentbeans.com also recommends the Capital One Classic so for you to confirm that has made my mind up for me, I think I will be getting one of those today. Thanks again

What happens if you don't get any casual work one month? Or you are ill, or busy with your studies? How will you pay off the credit card? Do you know exactly where your money is being spent now you have sorted yourself out a bit? If you are trying to get back on a level in financial terms, I can't see what you would be whacking on the plastic that needs protection?