Student Credit Cards - UK-Money.com

The Sweet Shop of Student Credit Cards

There is no getting away from the fact that students can expect to graduate £12,000 in debt. As the majority of students have to take out student loans and turn to credit cards for help, this is hardly surprising.

Student credit cards differ from ordinary credit cards. Normally, to be eligible for a credit card you have to have a regular source of income, which being a student is nigh on impossible! Credit card companies that offer student credit cards will let you borrow without any regular source of income. They are taking an increased risk in doing this as you can’t verify your ability to repay the debt, but there are plenty of companies out there willing to do it!

It’s like shopping in a sweet shop when it comes to taking out a student credit card. If your bank isn’t continually soliciting you to take out their great card, its other credit card providers preying on what they believe to be the foolish and lazy part of society! And on top of offering you a line of credit, they will tempt you with tasty offers like free music vouchers, book vouchers or discounts from certain high street shops. It’s all too mouth droolingly good to stop and think about the consequences before you apply.

That’s not to say that all student credit card issuers are ogres and you should avoid them at all costs! Just keep the following advice in mind when you think that you may have to turn to a student credit card for help.

1. You must look at your finances carefully and decide if you can take on the extra financial responsibility of a student credit card.

2. Make sure that you only use it in emergencies and don’t use it like a debit card to buy your weekly shopping or build up a tab on a bar. If you can’t resist that temptation don’t take it out!

3. Look at the APR on the card. This may be hidden in the small print! Interest rates may be high as a result of taking on the risk of offering credit to a client that has no regular source of income. If it is extortionate, don’t take it out!

4. If you can’t afford to keep up the repayments you will impair your credit history which will affect your future. You may find it difficult to apply for a mortgage or take out a credit card after you graduate.

5. If you cannot find the right student credit card for you, shop around. There are credit cards available that have low minimum requirements for income, with respectable interest rates.