Best student credit cards 2017

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By in Student Banking. Updated .

Credit cards don't have to be a fast-track to doom and debt. Use them to work for you and you'll reap the benefits. Here's how to be fantastic with plastic.best credit cards Credit: frankieleon – Flickr

Quite simply, a credit card is a tool for delaying payment for the stuff you buy. The credit card company lends you the money, and you pay them back at a later date, typically with additional interest. As with most loans, the amount of interest you pay increases depending on how long you take to repay.

But, pick the best credit card and it could be 0% for several weeks or even months, and this can help with budgeting. There are other key benefits too, as we'll explore below, without neglecting the pitfalls.

4 reasons to get a credit card

funny egg poacherCredit: Tim Simpson – Flickr

We're not yolking – credit cards have their benefits. Here are just four:

  1. They can improve your credit score if you manage them well. You'll need a decent credit history to get financial products – such as a mortgage – later on. The better your score, the better the deals you'll be offered.
  2. Pay for items costing over £100 with a credit card and Section 75 protection means the credit card company will refund you if something goes wrong. You can even just pay a deposit by credit card to be eligible to claim for things like repairs, a retailer going bust, non-delivery, cancellation and fraud.
  3. Learning how to run a credit card account properly teaches you vital money management skills that could see you better off in the future, too.
  4. As with student bank accounts, credit cards often come dripping with cashback and rewards. As long as you've got a sound repayment plan, you could be quids in.

They can also be handy when you run out of money and still have essential costs to cover, but we'd always say use your 0% overdraft first: you'll have longer to pay back your borrowings while avoiding interest charges and fees.

Credit cards can be useful, but they're not for everyone. Don't even think about applying if you struggle to manage your personal finances, want to use it as an extra source of income, or think you can borrow your way out of debt. Only use a credit card when you can manage the repayments.

7 things to watch out for

shocking student credit card statementCredit: Jason Rogers – Flickr

  1. Never spend more than you can repay within the 0% interest period.
  2. Check your credit history before you apply and, if you need to, take steps to improve your score.
  3. Don't make multiple applications too close together, as that can affect your chances of being accepted. Pick one card that delivers what you need and that you believe you'd be accepted for.
  4. Check the annual interest rate (the APR): this indicates how much extra you'll be charged if you don't pay your balance off in full each month.
  5. Make sure you understand the terms of any promo deals, including minimum spending or repayments.
  6. Check all the penalty charges associated with using the card, including going over your credit limit, spending abroad or withdrawing from ATMs (then avoid these things!)
  7. Check your monthly statements! As well as spotting potential fraud, you can see at a glance whether you're on budget, any rewards or interest you're accumulating, and when you need to pay.

Should I get a standard or student credit card?

coke or pepsiCredit: Kreg Steppe – Flickr
Credit cards designed for students don't usually offer great rewards, but you may have more chance of getting one. They come with smaller credit limits (minimising your chances of stacking up lots of debt) but tend to have higher APRs, so can be costly if you don't clear your balance in full.

Standard cards open up your options in a couple of ways. If you're ultra-disciplined, a 0% purchase card gives you a window of interest-free spending. You do all your regular shopping on a 0% card while letting your own funds build up in a savings account (earning you a bit extra in interest).

It's important to still only buy what you have the cash for, and to keep that money safe until you need it to clear your balance. The aim of the game is to always repay in full before the interest kicks in – make sure you plan ahead.

If you like the idea of rewards, a cashback or points card can earn you anything from money back to air miles and store vouchers, and can be worth it if you're loyal to one store or supermarket. Again, rewards are only valuable if you're scrupulous about clearing your balance in full each month: any extra charges, penalties (or fees for paying by credit card) could wipe-out any gains otherwise.

Best credit cards for students

Whether you're accepted for a student or standard card depends on a number of factors (such as your credit score), so you'll need to check out the small print for yourself.

Some banks also won't offer a student credit card as an option until you've had a student account with them for a few months, so there may be some waiting involved.

We run through the best offers for students below, but there's one that stands out above the rest right now.

Student credit card comparison

BankAPRLimitPositivesNegatives
NatWest18.9%£500- Online/ mobile banking
- Text alerts for due dates & remaining credit
- Must have Natwest student account
Halifax19.9%£1,000- Online/ mobile banking
- Account updates quickly when you pay money in
- Free text alerts
- Online fraud protection
- High APR
Lloyds19.9%Variable- Students with good credit may get a bigger limit- £500 minimum credit limit
- High APR
RBS18.9%£500- Online/ mobile banking
- Text alerts for due dates & remaining credit
- Must have RBS student account
HSBC18.9%£500- Online banking
- Worldwide assistance and emergency cash
- Online Fraud Protection
- Must have HSBC student account
- Can't hold a student account anywhere else
TSB19.9%£1,000- Online/ mobile banking
- 1% cashback on first £500 spent
- Must have TSB student account
- High APR

We've provided ballpark figures here, but who gets what credit limit and criteria is down to the bank. Check the terms for yourself!

10 ways to use a credit card properly

Tip jar with funny captionCredit: Nan Palmero – Flickr

  1. Don't treat credit cards like a backdoor loan – only use them to buy things you can afford and have the cash for.
  2. Always try to pay your statement balance in full each month. Only ever making the minimum payment is a false economy: it'll take longer to clear your balance and your purchases will end up costing more.
  3. Use the direct debit trick to never miss payment. Set up a DD from your current account to automatically pay the balance (or any other amount) owed on your credit card. Make sure you've got enough cash (or interest-free overdraft) in your current account, though!
  4. If you can't clear the balance in full, do still pay what you can. Missing minimum repayments could affect your credit score and hit you with penalty charges, too.
  5. Buy high-value items on a credit card to get Section 75 protection against the retailer going bust, or your item not being as expected. Think holidays, tickets, gadgets or eBay. You'll need to pay directly with your credit card to get S75 protection (eg. not via PayPal).
  6. Going after rewards points, cashback or air miles? It could be worth using your credit card for everything to build up better bonuses, while your Student Loan, salary or other income sits tight in your savings account brewing extra interest. Just make sure you've still got the cash to cover your spending.
  7. Never withdraw cash on a credit card. You could be charged a higher interest rate than on purchases and/or a handling fee. Either way, it's going to cost you – so don't do it. If you want to transfer cash available from your credit limit into your current or savings account, ask if the card company offers a money transfer service instead. Check the terms carefully, though.
  8. Don't spend more than your credit limit or you'll face penalty fees. Worth keeping an eye on towards the end of the month in particular.
  9. The jury's out on whether getting – but not using – a credit card will do anything useful for your credit score. Tucking it away and forgetting about it isn't great for fraud prevention, either.
  10. You only need one credit card. More than that and it just gets stressful.

The key to happy credit is knowing how it works, and using it responsibly. Only take on what you can cope with and – always – what you can afford to repay. Got questions, concerns or tips? Leave us a comment below and we'll see you right!

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19 Responses to “Best student credit cards 2017”

  1. Celeste

    19. Sep, 2016

    I really wish they had better options for students with bad credit.

    Reply
  2. Sunay Chauhan

    27. Jul, 2016

    Sainbsburys will not issue a card if you are a student and dont have a regular income. They also dont consider student loan and grants as income.

    Reply
  3. Davey

    18. Jun, 2016

    Could one just get a credit card with no intention of using it, but with the sole purpose of boosting the credit report?

    I would like the idea of being able to increase my credit rating, but have little probability of actually needing/wanting to use it.

    Any response is much appreciated.

    Reply
  4. Annie

    14. May, 2016

    Hi, I was wondering if student loans count as “annual income” when applying for a credit card? My credit score is low so I want to get one to improve it and have been offered something by my current bank, but am confused on the application process. Thanks

    Reply
    • Jake Butler

      16. May, 2016

      Hi Annie, as far as I know you cannot include them but I would suggest asking what the credit card company that you are applying for suggests.

      Reply
  5. Aisyaa

    25. Feb, 2016

    Hi
    Is the” 0%interest on purchases for 19 months” of the Sainsbury’s Nectar Purchase Credit Card means that if I manage to pay all the balance within 19months, I wont be charged any interest? For example, if I use £500 in the first month, and I manage to pay it within 12 months, I just need to pay £500? (Given I only use my credit card once).

    Aisyaa

    Reply
    • Jake Butler

      25. Feb, 2016

      Hi Aisyaa, that’s correct although some cards may have a minimum repayment amount.

      Reply
  6. Lindsay

    27. Dec, 2015

    Hi,
    I’m a 2nd year student and I graduate at the end of third year and will be working freelance when I do. Currently, I do not have a part-time job and my only income is from SAAS. I would like to create a credit history but most credit cards want you to be earning an annual income and don’t seem to accept bursaries etc. Is it better to wait until I have graduated?
    Thanks,
    Lindsay

    Reply
    • Jake Butler

      30. Dec, 2015

      Many students can take out credit cards but you may have to start on one that doesn’t need such a high credit score.

      Reply
  7. Dan Cotter

    27. Nov, 2015

    Hi,

    I’m on a year abroard, and I’m running low on funds, I’m running low on money I need for rent just for the next month. I can pay it all off in January when my loans come in, but I can’t seem to approved for any credit cards? DO you have any advice, I know payday loans are a nono, but I can 100% pay it off January – so if I take one out in Dec would it be bad? If so what should I do?

    Reply
    • Jake Butler

      30. Nov, 2015

      There are other options out there. Have a look for low credit rating credit cards (they do exist). Alternatively you could talk to your bank about an arranged overdraft or small loan. I would stress that you try every possible avenue before turning to payday loans!

      Reply
  8. Meg

    11. Sep, 2015

    with the 56 days at 0%. Does that mean you have 56 days to pay off the whole debt or just the monthly minimum charge?

    Reply
    • Jake Butler

      17. Sep, 2015

      This means you have to pay off the whole debt. If you pay off the monthly minimum you will be charged interest on the outstanding balance.

      Reply
  9. diana

    16. Aug, 2015

    Hey I need help of choosing a best student card, I’m 16 and starting college soon I need money to start building my life up, pay for my college stuff and for my football trainings, because i hate it now that my mum has to pay for everything as she has her own things she needs to pay for. I’m getting a part time job and really need help to chose the right card I wont be spending alot only up to £40 a month and thats all for the travelling,food plus training. Could anyone help me please? Thankyou

    Reply
  10. Danielle

    12. May, 2015

    Hi,

    Basically in 1st year of uni, I got into an overdraft because of my rent and I don’t get much student finance. I now have 2 jobs, and I was wondering if its safe to take out a credit card to pay my overdraft off, and just set up a direct debit for the money to be taken out every month. The only reason I was thinking of doing this is because my its coming up to my final year and I’m getting worried I won’t be able to pay it off in time

    Thanks,

    Danielle

    Reply
    • Jake Butler

      18. May, 2015

      Hi Danielle, I would only suggest getting a credit card if you are 100% sure you can pay off the balance. It may also be the case that your credit card has higher interest than your overdraft.

      Reply
  11. Jim

    08. Apr, 2015

    hey,

    is there a way I can use multiple credit cards and then transfer the limits to an isa. and use a secondary source of income in in another bank account to get eaten up by the monthly 0% repayments for these cards.

    all the best

    Jim

    Reply
    • Jake Butler

      13. Apr, 2015

      Yes you can do this. Although it’s worth noting that applying for multiple credit cards may affect your credit rating.

      Reply

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