Credit Card for 18yo student

artyboy

CliveOfIndia said:

artyboy said:

would getting a credit card and using it/paying it be in any way effective in providing a more positive credit file?

Yes.  To be blunt    

Using a credit card regularly and always paying back in full, every month, without fail, is probably one of the easiest ways to start building up a solid credit history.  It just needs a bit of common sense to use it properly.  Whatever limit you're given, never look upon it as a sudden pot of available free money.  Only buy stuff that you know you'll be able to repay in full when the next statement drops through the letter-box.

A credit card can be a very useful tool, but it just needs a little bit of discipline.  Some youngsters are extremely financially-savvy, others less so.  It's when you start buying things and think "Oh, that's OK, I'll pay it off in a few months" that things can start to become a problem.

Thanks. She is disciplined to the point of obsession. She is already very well set financially, but still wants to have a job to boost the 'house fund'. I'm extremely confident that the overdraft that came with her student account will never come close to being used. Yes we have helped her, but she is well able to help herself.

Interestingly that also leads to a lack of desire to have a credit card on her part because she sees it as debt, and debt is bad. So I've clearly done a reasonable job teaching her financial prudence, now I just have to teach her that playing the system can also be important!

CliveOfIndia

artyboy said:

I'm extremely confident that the overdraft that came with her student account will never come close to being used.

That's a very good start.  Having an overdraft available but not using it is seen as a positive on your credit history.  Very occasional use is not too bad (if a tad expensive), but constant use of an overdraft is viewed very negatively by lenders.  So if she has it available but never uses it, that's an excellent footing.

artyboy said:

Interestingly that also leads to a lack of desire to have a credit card on her part because she sees it as debt, and debt is bad. So I've clearly done a reasonable job teaching her financial prudence, now I just have to teach her that playing the system can also be important!

That's a very interesting point.  My eldest offspring has no desire to get a credit card for exactly the reasons you state.  I've mentioned to him that it'll help when the time comes for mortgage applications, but he's adamant he doesn't want to get into debt.  As you say, a laudable standpoint, but there's an interesting discussion to be had as to "debt" vs "well-managed credit card debt", if you see what I mean.

Marchitiello

Emmia said:

JamTomorrow said:

My Son has just turned 18 and would like to start to build his credit score.

he is a FT student with limited income.  Credit card will be paid in full via add each month.  I’d doesn’t need the credit for anything other than to build his credit score.

No Fx loading would be beneficial as he is in Europe this summer.  His current bank account is with Nationwide.

any recommendations for suitable credit cards?

Honestly, as he's a student with limited income I'd steer well clear of a credit card - he's got lots of time to build a score, no need to rush.

If he really wants to build, he could consider a mobile phone contract.

I have got my first credit card as a FT student, limited credit limit, I think £4-500, and has served me well getting my first Amex 3 years later on my final year at Uni (when Amex were difficult to get), and still have both, with fairly large limits.

if the boy is sound and aware of what it means to manage money (e.g save to be able to buy something nice), then a credit card should be only a way to facilitate payments. I am planning to help my son do the same when he turns 18 in a few years. 

Edit to add:

there should be many banks offering student accounts , and some have connected Student Credit Cards which would be easier to get. When I was at uni I already had multiple student accounts and multiple student  credit cards.

HSBC offers one for their Student Account Customers 

WillPS

Marchitiello said:

Emmia said:

JamTomorrow said:

My Son has just turned 18 and would like to start to build his credit score.

he is a FT student with limited income.  Credit card will be paid in full via add each month.  I’d doesn’t need the credit for anything other than to build his credit score.

No Fx loading would be beneficial as he is in Europe this summer.  His current bank account is with Nationwide.

any recommendations for suitable credit cards?

Honestly, as he's a student with limited income I'd steer well clear of a credit card - he's got lots of time to build a score, no need to rush.

If he really wants to build, he could consider a mobile phone contract.

I have got my first credit card as a FT student, limited credit limit, I think £4-500, and has served me well getting my first Amex 3 years later on my final year at Uni (when Amex were difficult to get), and still have both, with fairly large limits.

if the boy is sound and aware of what it means to manage money (e.g save to be able to buy something nice), then a credit card should be only a way to facilitate payments. I am planning to help my son do the same when he turns 18 in a few years. 

Same. At the time I think it was more-or-less packaged with the Natwest student account, might have been a tick in a box during the application. £500 limit. Didn't always clear it but the damage was limited by virtue of the low limit, and as a student with a part time job and no parental stipend it made the difference between eating and not sometimes.

I'd be looking at TSB or HSBC if was in the same situation nowadays.

Jami74

artyboy said:

Well I suppose it depends how many years of good, reasonably well padded history is useful ahead of making any more significant credit applications (as you might once you start working following graduation). 

Mine are both currently studying and working and have a very sensible attitude to money, but it'll be a few years of full time work before they'll be anywhere close to having a mortgage deposit unfortunately.

I never had a credit card until my 40's and while I never made a mortgage application either I never had any problems getting loans or finance the few times I applied. I then got the first credit card I applied for with a starting limit of over £2k. Obviously I am biased based on my own experiences but when they are 25 I can't imagine their credit history and ability to get credit will be worse if they got their first credit card at 22 instead of at 18. Therefore, I've suggested to mine that they hold off until they have their full time jobs. In fact their credit score (I know, I know!) will probably be quite low because they've discovered bank switching incentives.

WillPS

Jami74 said:

artyboy said:

Well I suppose it depends how many years of good, reasonably well padded history is useful ahead of making any more significant credit applications (as you might once you start working following graduation). 

Mine are both currently studying and working and have a very sensible attitude to money, but it'll be a few years of full time work before they'll be anywhere close to having a mortgage deposit unfortunately.

I never had a credit card until my 40's and while I never made a mortgage application either I never had any problems getting loans or finance the few times I applied. I then got the first credit card I applied for with a starting limit of over £2k. Obviously I am biased based on my own experiences but when they are 25 I can't imagine their credit history and ability to get credit will be worse if they got their first credit card at 22 instead of at 18. Therefore, I've suggested to mine that they hold off until they have their full time jobs. In fact their credit score (I know, I know!) will probably be quite low because they've discovered bank switching incentives.

Things were different before the late 00s financial crisis.

I remember I went in to my branch of Natwest not long after I turned 18, having held a Solo/teenage account with them since I was 12. I can't remember what it was regarding but I was pulled aside and offered a 4-figure overdraft if I upgraded to an adult/gold account - at the time my only income was about £35/week from a Saturday job. Crazy.

Emmia

WillPS said:

Jami74 said:

artyboy said:

Well I suppose it depends how many years of good, reasonably well padded history is useful ahead of making any more significant credit applications (as you might once you start working following graduation). 

Mine are both currently studying and working and have a very sensible attitude to money, but it'll be a few years of full time work before they'll be anywhere close to having a mortgage deposit unfortunately.

I never had a credit card until my 40's and while I never made a mortgage application either I never had any problems getting loans or finance the few times I applied. I then got the first credit card I applied for with a starting limit of over £2k. Obviously I am biased based on my own experiences but when they are 25 I can't imagine their credit history and ability to get credit will be worse if they got their first credit card at 22 instead of at 18. Therefore, I've suggested to mine that they hold off until they have their full time jobs. In fact their credit score (I know, I know!) will probably be quite low because they've discovered bank switching incentives.

Things were different before the late 00s financial crisis.

I remember I went in to my branch of Natwest not long after I turned 18, having held a Solo/teenage account with them since I was 12. I can't remember what it was regarding but I was pulled aside and offered a 4-figure overdraft if I upgraded to an adult/gold account - at the time my only income was about £35/week from a Saturday job. Crazy.

Natwest, the bank that pre financial crisis offered me a mortgage at a level, where the repayments would have meant I couldn't afford train travel to work... let alone bills, groceries...

The answer to this was to not pay into my CS pension! (Although I'm still not sure I'd have had enough income even then)

Oddly I didn't do that, which meant I waited several more years to buy - I can see that someone might have borrowed like that though.