Best first credit card for 2nd year student

monkeyman613

Hi all,

I'm wondering what are the best options for me as a 2nd year student looking to open a credit card and build up a credit history/score?

Any help and advice is greatly appreciated!

Many thanks,

Emmia

I'd avoid a credit card at uni if possible it risks more debt - loads of time to build your score when you graduate.

If you must get one, I'd try the bank you usually bank with - but the golden rule with all cards is to pay off in full every month.

Nasqueron

Emmia said:

I'd avoid a credit card at uni if possible it risks more debt - loads of time to build your score when you graduate.

If you must get one, I'd try the bank you usually bank with - but the golden rule with all cards is to pay off in full every month.

Student cards likely to be a low limit anyway. It is worth having, if they can get one with only student loan income, assuming not working - pay shopping, pay off in full every month as they would have to do with a debit card. Better to have 2-3 years of solid credit history in the bank than none, for example, if they need a car on finance for a job 

CliveOfIndia

monkeyman613 said:

open a credit card and build up a credit history/score

Just to clarify what your aim should be - yes, building up a good credit history is unquestionably a good idea.  The score (at least, the score you see on your CRA report) has no value whatsoever.  It's merely a marketing gimmick and is not used - nor even seen - by any lender.

Your history is what a lender will be interested in.  They want to see a pattern of responsibly borrowing and repayment.  To this end, use the card for routine, budgeted spending (simply buying your weekly food shopping will do), and always repay the full balance every month, on time, without fail.

The previous posters have raised some very good points.  On the one hand, a credit card is a very simple - and completely free - way to start building up a positive history.  On the flip side, you do need to be disciplined.  It's all to easy to see it as a pot of free money and buy stuff you can't afford.  I'll reiterate my earlier point - you absolutely MUST repay in full every month.  Otherwise you'll be charged a hefty rate of interest, as well as tarnishing, to some extent, your credit history.  And given that is your primary aim, it's counter-productive to say the least

In terms of getting a card, your options are either a sub-prime card or else your own bank.  The sub-prime cards tend to market themselves at those with little existing history.  They tend to offer lower credit limits and high rates of interest, neither of which should matter to you unduly.  A low limit is no bad thing (especially if you have limited income), and the interest rate is irrelevant - because you'll always be repaying the card in full every month, won't you?  (Do you see a theme going on here?)

Your own bank can sometimes be an option - in the absence of any credit history being recorded on the CRAs, they can at least see how you've managed your finances in recent years.

retiredbanker1

OP - No mention of income (Student loan, monies from mam and dad etc do not count) so your chances are slim indeed.

lr1277

If you haven't done so, get yourself a pay monthly mobile SIM for your phone. This willl get you started on your credit file journey. Not a PAYG contract. Getting yourself such a SIM will give you the start on the credit file that credit card proivders like to see. If you do get a new pay monthly phone contract, have it for 2-3 months, so that it shows on your credit file before making the credit card application. As an aside, my previous phone contract with Virgin did not show on my MSE Credit Club report. But when my contract changed to O2, then this showed up on my credit report. So you could check if any new phone contract shows on your credit report.

If your current bank doesn't offer a student credit card, you could look on the site finder.com.

In google I entered:

finder student credit card

The resulting page lists a couple of student specific cards i.e. HSBC and TSB. Not sure if you need to have your student account with them to get the card but you can investigate further. There are also 2 other cards listed for people with a poor credit history.

Don't make more than 2 credit card applications before leaving the matter for 6 months otherwise you will look desperate for credit and credit card providers don't like that.

Edited to add: before making an applications use the card site's own elgibility checker. Ths should be more accurate than a generic eligibility checker. This might prevent a hard check which will be seen on your credit file.

inthezeroroom

Just don’t. It’s a myth that you need a credit card in order to get further finance in the future (which you also don’t need). Use money you have to pay for stuff, and yes that includes cars. Don’t have money? Then you can’t afford it. Seriously, if someone had told me this as a second-year student then the last 30 years would have been so much better. 

CliveOfIndia

inthezeroroom said:

Just don’t. It’s a myth that you need a credit card in order to get further finance in the future (which you also don’t need). Use money you have to pay for stuff, and yes that includes cars. Don’t have money? Then you can’t afford it. Seriously, if someone had told me this as a second-year student then the last 30 years would have been so much better. 

It's true that some people are not disciplined enough to use a credit card sensibly, and can run up unmanageable debts.  But used correctly, a credit card can be a very useful tool.  It gives you a certain level of protection when buying most goods, it is a requirement of many hotel and car hire companies that a credit card is used for payment.  You can even earn rewards for using it.

You're right, a credit card isn't the only way to build up a credit history - but it's one of the simplest ways.

inthezeroroom said:

to get further finance in the future (which you also don’t need).

Well, you do need it if you want to get a mobile phone contract, or a mortgage.  "Credit" doesn't only mean a loan for a car - there are many situations where access to credit is useful.  Again, I'm not disagreeing with you - it's possible to manage without access to credit, and arguably this is a good strategy for some people.  But as long as you understand how it works, and are disciplined enough to not use it to buy things you can't actually afford, then it's a useful tool.

Nasqueron

inthezeroroom said:

Just don’t. It’s a myth that you need a credit card in order to get further finance in the future (which you also don’t need). Use money you have to pay for stuff, and yes that includes cars. Don’t have money? Then you can’t afford it. Seriously, if someone had told me this as a second-year student then the last 30 years would have been so much better. 

You don't need it sure but it really helps and gives you the advantage of things like S75 protection and, with a better credit history, cashback cards etc. Taking finance for a car or as above, a house, is perfectly normal and reasonable, there is no reason to buy a clapped out junk car that will cost a fortune in ongoing repairs if a car can be had on finance, where it is affordable, particularly with warranty etc. Are you going to buy a tent to live in because you can't afford a house in cash? 

WillPS

OP should be free to make their own choices - it's so easy these days to stumble upon credit I don't see a potential problem with making an informed choice to take a credit facility to achieve a greater life goal (like having a better credit record and having better access to credit products when needed). Credit cards are a powerful tool and I'm not sure I subscribe to the notion you should only get one if you really need it - OP themselves can judge if they think it'd be useful or a risk and that should be sufficient.

The tricky part will be finding an issuer who'll accept.

TSB and HSBC offer student credit cards, but you need a student current account with them (and to have held it 3 months in the case of TSB).

Other than those, you're probably looking at the low credit sorts. A simply eligibility check via MSE or Compare the market should give a rough idea of what you might be able to achieve. Couple these with the eligibility checkers on the providers websites themselves before applying.

enthusiasticsaver

I recommend you do not get a credit card in Uni unless you can be very disciplined about using it.  Building up a credit score is not something you need to think about now.