Best first credit card for 2nd year student

WillPS

inthezeroroom said:

WillPS said:

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.

OP should be free to make their own choices – absolutely.

However, I disagree that having a better credit record and better access to credit products is a greater life goal. The only purpose of a credit history is to enable further debt. And so if we take debt off the table entirely (making exception for a mortgage) then we won't have a credit history and won't need one. Not for a new car because we've got a paid-for car on the drive. Not for emergencies because we've got money in the bank for those, right?

I also disagree that credit cards are a powerful tool. Do you mean spending power? As in the power to spend money you don't have? I'm struggling to think of cases where that is helpful. Cash in a savings account is way more powerful.

Can you not see that you're applying a values judgment here which the OP hasn't asked for?

No, I didn't mean spending power. I mean the power to deal with things and them not cause day to day pain. Maybe OP has a pet and insurance, but needs to cover off the posibility of a sudden vet bill which they know they can claim back. Maybe the OP regularly needs to make a large-ish deposit - I remember once when I was a student my partner and I went on holiday, we'd booked a hotel and on check in they wanted to take a refundable card deposit. Needless to say that dropped our available balance (between us!) to essentially nil. I was kicking myself for not bringing my student credit card with me.

I think people presume that you can just endlessly use bank of mum & dad as a student; well I certainly couldn't, my parents were skint - so when I did want to borrow money from them at best I could have it for a few days before they'd need it again themselves. I wanted to be independent from them and for me a credit card was a tool which would allow me to absorb the slight shocks life often brought.

Nasqueron

born_again said:

Nasqueron said:

I also wouldn't place any value in the idea that "most people" do anything based on a forum where people come for advice when they need help, as, the reality is, anyone who makes money from cards or uses S75 successfully etc wouldn't necessarily ever feel the need to register and post.

As someone working in this area. S75 is one of the most over hyped benefits of a CC & really is rarely used, as there are chargebacks to reclaim funds. 👍

Which they won't have using cash

Also banks use chargeback logically because they don't have to pay for it unlike S75. It may be less common, it's still a significant potential benefit which you lose with using a debit card for the same purpose

Nasqueron

enthusiasticsaver said:

Nasqueron said:

enthusiasticsaver said:

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. 

Building up a credit score is of course not something you ever need to think about.

Building up a credit history is no bad thing - being on the property ladder 2-3 years earlier might save money, better car deals etc

Yes,  when they have a job and are earning.  We have seen way too many young people on DFW who are using credit cards before they have learnt how to budget and manage money and before long are thousands of pounds in debt.  My own two daughters worked part time through Uni and sixth form but did not apply for credit cards for several years after leaving Uni and getting established on careers.  They eventually got credit cards in their early 20s and had no issue getting mortgages or car finance. I would recommend learning to manage money first before applying for any credit.  

Sure and to add my own anecdote to the mix, I got a CC from my bank at 18 while a student, with 0.25% cashback which I have held ever since, it's earned me money, helped me learn finance (which my parent also taught me, saving and buying only what you can afford). Poor financial education is the fault of the parents, not simply from having a credit card, particularly a low limit one that a student could typically get - mine started at £350!

People learning to budget is a life skill, a CC is not suitable for everyone sure but it's not a bad thing to have

Nasqueron

inthezeroroom said:

Nasqueron said:

Cash in a savings account, losing money from inflation isn't as powerful as your credit card company paying for a new kitchen because you used a credit card

Why not just be clear - you are advising against a powerful and beneficial payment tool because you personally don't like credit and don't think anyone else should use it? It's not good MSE advice 

Section 75 aside (and that is a good example of it working BTW), the only power is power to spend money you don't have, and the 'benefits' such as cashback and points are rubbish. 

I haven't exactly been unclear. However, it's not that I think other people shouldn't use credit but that they don't need to. Advising someone (especially someone with low/no income) to take out credit is not good advice, full stop.

You are perfectly free to dislike credit but making demonstrably factually incorrect statements e.g. on the benefits of cashback / points does not help the OP to make a decision.

It is not being clear to falsely state that credit cards do not have benefits as part of your post in advising against credit - it would be clear to state you are advising against credit simply because you personally do not like credit.

Nobody necessarily needs credit if you live in a tent, have an old scrap banger car and live using cash (or effectively doing so) but many many people use it to their benefit and any debate on the subject should be driven by facts not opinion, particularly when the opinion can be shown to be wrong.

enthusiasticsaver

Nasqueron said:

enthusiasticsaver said:

Nasqueron said:

enthusiasticsaver said:

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. 

Building up a credit score is of course not something you ever need to think about.

Building up a credit history is no bad thing - being on the property ladder 2-3 years earlier might save money, better car deals etc

Yes,  when they have a job and are earning.  We have seen way too many young people on DFW who are using credit cards before they have learnt how to budget and manage money and before long are thousands of pounds in debt.  My own two daughters worked part time through Uni and sixth form but did not apply for credit cards for several years after leaving Uni and getting established on careers.  They eventually got credit cards in their early 20s and had no issue getting mortgages or car finance. I would recommend learning to manage money first before applying for any credit.  

Sure and to add my own anecdote to the mix, I got a CC from my bank at 18 while a student, with 0.25% cashback which I have held ever since, it's earned me money, helped me learn finance (which my parent also taught me, saving and buying only what you can afford). Poor financial education is the fault of the parents, not simply from having a credit card, particularly a low limit one that a student could typically get - mine started at £350!

People learning to budget is a life skill, a CC is not suitable for everyone sure but it's not a bad thing to have

Financial education is one thing.  Financial discipline is something else.  You can have one without the other.  

Nasqueron

enthusiasticsaver said:

Nasqueron said:

enthusiasticsaver said:

Nasqueron said:

enthusiasticsaver said:

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. 

Building up a credit score is of course not something you ever need to think about.

Building up a credit history is no bad thing - being on the property ladder 2-3 years earlier might save money, better car deals etc

Yes,  when they have a job and are earning.  We have seen way too many young people on DFW who are using credit cards before they have learnt how to budget and manage money and before long are thousands of pounds in debt.  My own two daughters worked part time through Uni and sixth form but did not apply for credit cards for several years after leaving Uni and getting established on careers.  They eventually got credit cards in their early 20s and had no issue getting mortgages or car finance. I would recommend learning to manage money first before applying for any credit.  

Sure and to add my own anecdote to the mix, I got a CC from my bank at 18 while a student, with 0.25% cashback which I have held ever since, it's earned me money, helped me learn finance (which my parent also taught me, saving and buying only what you can afford). Poor financial education is the fault of the parents, not simply from having a credit card, particularly a low limit one that a student could typically get - mine started at £350!

People learning to budget is a life skill, a CC is not suitable for everyone sure but it's not a bad thing to have

Financial education is one thing.  Financial discipline is something else.  You can have one without the other.  

Sure but someone can do that with say car finance, overdraft etc

The general point is that a CC is not a bad thing - you and I clearly agree that a CC is fine, just we disagree on when to take it out, which I have no problems with, I completely get your reasoning. My more general issue here is the idea any credit is bad and nobody should ever take it out except maybe a mortgage - and the more specific, false, claim that a CC is worthless as the benefits are poor etc. I got £67.18 last year from cashback on one card just from paying for stuff like shopping, petrol, car service etc etc - now given I was spending maybe £6000-£700 a year (I have the Lloyds one with is 0.25% to £4k then 0.5%), it's a decent enough freebie that I wouldn't have got with cash (though a Chase debit card might have got more albeit I can have the money in savings for a month more with a CC!). I think if I was using them, an Amex card for miles or the 5% initial bonus etc would not be terrible either

WillPS

Incredibly condescending to reply to a young person seeking advice on a financial product with essentially 'have you thought about growing up a bit first'. Shameful really.

inthezeroroom

Nasqueron said:

You are perfectly free to dislike credit but making demonstrably factually incorrect statements e.g. on the benefits of cashback / points does not help the OP to make a decision.

It is not being clear to falsely state that credit cards do not have benefits as part of your post in advising against credit - it would be clear to state you are advising against credit simply because you personally do not like credit.

Nobody necessarily needs credit if you live in a tent, have an old scrap banger car and live using cash (or effectively doing so) but many many people use it to their benefit and any debate on the subject should be driven by facts not opinion, particularly when the opinion can be shown to be wrong.

OK, so now the OP can see that with a cashback card they could earn a whole £2.50 for every £1,000 they spend. I don’t think it’s factually incorrect to state that that is rubbish.

WillPS

inthezeroroom said:

Nasqueron said:

You are perfectly free to dislike credit but making demonstrably factually incorrect statements e.g. on the benefits of cashback / points does not help the OP to make a decision.

It is not being clear to falsely state that credit cards do not have benefits as part of your post in advising against credit - it would be clear to state you are advising against credit simply because you personally do not like credit.

Nobody necessarily needs credit if you live in a tent, have an old scrap banger car and live using cash (or effectively doing so) but many many people use it to their benefit and any debate on the subject should be driven by facts not opinion, particularly when the opinion can be shown to be wrong.

OK, so now the OP can see that with a cashback card they could earn a whole £2.50 for every £1,000 they spend. I don’t think it’s factually incorrect to state that that is rubbish.

The limit of cashback achievable isn't 0.25%, in fact Santander will offer an effective rate of 1.6% for 12 months.

artyboy

inthezeroroom said:

Nasqueron said:

You are perfectly free to dislike credit but making demonstrably factually incorrect statements e.g. on the benefits of cashback / points does not help the OP to make a decision.

It is not being clear to falsely state that credit cards do not have benefits as part of your post in advising against credit - it would be clear to state you are advising against credit simply because you personally do not like credit.

Nobody necessarily needs credit if you live in a tent, have an old scrap banger car and live using cash (or effectively doing so) but many many people use it to their benefit and any debate on the subject should be driven by facts not opinion, particularly when the opinion can be shown to be wrong.

OK, so now the OP can see that with a cashback card they could earn a whole £2.50 for every £1,000 they spend. I don’t think it’s factually incorrect to state that that is rubbish.

Well, my cashback came to over £1000 last year - yes there were some big purchases, but all affordable, and if I can get free money (plus a few additional protections) as a result of being financially disciplined, then why not.

This incidentally, is the view of someone who was utterly financially reckless as a student 30 years ago, and has also had to rebuild over time - but can still see the value in credit facilities, if used carefully.

If that's not your view then fine, but perhaps the rather preach-y approach you have taken isn't helpful to this thread.