Are you preparing for university in September? If so, it's time to start thinking about your finances. University is a great experience for many reasons, including furthering your education, propelling your social life, and learning to navigate life.
Students are often targeted with financial products, from insurance to current accounts, and there are lots of deals on offer.
One of those is a student credit card which if the credit card is used correctly can be handy for collecting rewards and cashback, and also one to fall back on in emergencies.
In this article, you'll learn all about student credit cards, including how they work, and who they are for, and we've also picked out six of our our best student credit cards to get you started.
| Card Name | Score | Details |
|---|---|---|
| 1. HSBC Student Credit Card | ★★★★★ | Learn more |
| 2. TSB Student Credit Card | ★★★★★ | Learn more |
| 3. Aqua Advance Student Travel Credit Card | ★★★★★ | Learn more |
| 4. Vanquis Bank Classic Credit Card | ★★★★★ | Learn more |
| 5. Capital One Classic Credit Card | ★★★★★ | Learn more |
| 6. Barclaycard Forward Card | ★★★★★ | Learn more |
What is a student credit card?
A student credit card has the same concept as a regular credit card. However, it's designed to cater for your needs as a student. Student credit cards tend to have low credit limits and charge higher interest rates than regular ones.
The idea is to help you budget and build your credit rating for future financial applications, like buying a house, without the risk of getting deep into debt.
Applying for a credit card is a serious commitment, so you must know all the ins and outs before filling out any applications. We've compiled a list of the advantages and disadvantages of having a student credit card here:
| Advantages | Disadvantages |
|---|---|
| ✔️ Protection on purchases: a student credit card has the same level of purchase protection as regular credit cards on purchases worth between £100 and £30,000 | ❌️ Lower credit limit: student credit cards usually have much smaller credit limits than normal credit cards |
| ✔️ Building credit: using a student credit card and repaying the balance on time is a great way to start building credit | ❌️ Potential high-interest rates: most student credit cards have a higher APR rate than regular credit cards—usually around 39.9%. However, if you keep up with the minimum monthly repayment and pay back your credit card balance in time, you won't be charged interest. |
| ✔️ Credit card rewards: depending on which student credit card you choose, you could earn extra rewards for using your new credit card | ❌️ Fees: there will be fees for cash withdrawals from your credit card |
| ✔️ Spread the cost of purchases: in need of a large purchase? A student credit card allows you to pay for large purchases and spreads the cost making it more manageable | ❌️ Marks on your credit score: a rejected application can leave a mark on your credit report. However, most credit card companies have an eligibility checker you can do before filling out an application to avoid any impact on your credit file. |
| ✔️ No annual fees: most student credit cards have no annual fees | |
| ✔️ Interest-free period: some credit card providers offer introductory interest-free periods |
Some student credit cards come with multiple features that allow you to take advantage of credit building whilst being rewarded for purchases. It's all about looking for the best student credit card that suits your needs and offers you the best deal.
What do you need to open a student credit card?
Each company will have its own rules and requirements for applicants, but most will share some standard criteria.
Like any credit account, there's a criteria you'll have to meet:
- Be aged 18 or over
- Resident in the UK
- Studying at a UK university
Some companies will require a credit history too, whereas some will accept you if you've never used credit before.
If you're applying online or in-branch for a student credit card, ensure you have the following documents ready:
- Proof of identification
- Proof of study
- Proof of address
It's also important to know that some credit card companies require you to have a student current account with them before you can apply for a student credit card. However, other options are available if you have an existing account with a different bank.
How do we choose the best student credit cards?
Before we dive into our top student credit cards, let's explore how we decided on the top picks.
These are some of the factors we considered:
- Interest-free periods: you must get the most out of your credit card, so we looked at ones that offered an interest-free period
- APR rates: although they're usually high for student credit cards, we found ones that offered great APR rates
- Credit limit: we've found a range of cards with various credit limits. However, your limit is usually dependent on your credit file.
- Annual fees: all the cards we've recommended have zero annual fees
- Features: we looked at cards that offered more than one feature. Some allow you to use them for everyday purchases and while out of the UK, if you study abroad, for example.
- Customer service: if any issues occur, it's good to know you’re supported and can contact a customer service team whenever needed
- Eligibility: we've included cards that are great for students with poor credit history and ones suited for students with no credit history
Best Student Credit Cards in the UK
With all of the above factors in mind, here's our pick of the best six student credit cards:
1. HSBC student credit card
If you've already got an HSBC student bank account, you may be eligible for an HSBC student credit card. This card offers personalized cashback through the Visa Offers program, so you can earn cashback while using your credit card.
HSBC Student Credit Card
Credit Limit
Representative % APR (variable)
18.9% APR
-
Interest-free period up to 56 days each billing period for cleared balances.
-
Credit limit up to £500 (subject to status).
-
No annual fee.
Representative Example – If you spend £500 at a purchase interest rate of 18.9% p.a. (variable) your representative APR will be 18.9% APR (variable). Your APR and credit limit may vary depending on your circumstances.
Advantages
✔️ Control your credit card with online banking and banking via the HSBC Mobile Banking app
✔️ You can use your credit card abroad in all regions supported by the Visa and Mastercard networks
✔️ You’ll receive personalized cashback offers
Disadvantages
❌️ You must already have a student bank account with HSBC to be eligible
❌️ A lower credit limit than other student credit cards
2. TSB student credit card
With the TSB student credit card, you may be able to get a higher credit limit than with other student cards, although you will need a current account with the bank to apply.
TSB Student Credit Card
Credit Limit
Minimum £500
Representative % APR (variable)
21.9% APR
-
Interest-free period up to 56 days on purchases each billing period for cleared balances.
-
Credit limit £500 to £1,000 (subject to status).
-
No annual account fees.
Representative Example – If you spend £1,000 at a purchase interest rate of 21.95% p.a. (variable) your representative APR will be 21.9% APR (variable). Your APR and credit limit may vary depending on your circumstances.
Advantages
✔️ Available to those with a poor credit history
✔️ Relatively higher credit limits in comparison to other student credit cards
✔️ You can add your credit card to your Apple Pay and Google Pay
Disadvantages
❌️ You need to have a current account with TSB to be eligible for this credit card
❌️ No rewards
3. Aqua Advance student travel credit card
The Aqua Advance credit card is ideal for students studying abroad at University as there are no fees on international transactions. This card is also suitable for building your credit report as it accepts applications with a poor credit record.
Aqua Advance Student Travel Credit Card
Credit Limit
Minimum £250
Representative % APR (variable)
34.9% APR
-
No interest-free period, however, if you stay within your credit limit, you can reduce your interest rate by 5% annually for three years.
-
Credit limit £250 to subject to status.
-
No extra fees on what you spend abroad.
Representative Example – If you spend £1,200 at a purchase interest rate of 34.9% p.a. (variable) your representative APR will be 34.9% APR (variable). Your APR and credit limit may vary depending on your circumstances.
Advantages
✔️ Reduce your interest rates by 5% each year
✔️ It helps increase your credit rating
✔️ Ideal for use abroad as there are no foreign transaction fees
Disadvantages
❌️ Higher interest rates than other student credit cards
❌️ No rewards
4. Vanquis Bank classic credit card
The Vanquis Bank classic credit card is ideal for students with little to no credit history. It's ideal for first-time credit card holders as it helps you build your credit report and rewards you for paying back your balances with credit limit increases every five months.
Vanquis Bank Classic Credit Card
Credit Limit
Minimum £250
Representative % APR (variable)
39.9% APR
-
Interest-free period up to 56 days on purchases each billing period for cleared balances.
-
Credit limit £250 to £600 (subject to status).
-
No annual fee.
Representative Example – If you spend £250 at a purchase interest rate of 39.9% p.a. (variable) your representative APR will be 39.9% APR (variable). Your APR and credit limit may vary depending on your circumstances.
Advantages
✔️ You can increase your credit limit by using and paying off your credit card on time
✔️ Express Check eligibility checker
✔️ Applicants with no credit history can apply
Disadvantages
❌️ Higher interest rates than other student credit cards
❌️ No rewards
5. Capital One classic credit card
Although the Capital One Classic credit card has no student-specific features, it's ideal for applicants with some credit history. If you're a second or third-year student who has built some form of credit history through overdraft usage and direct debits, this could be a good option.
Capital One Classic Credit Card
Credit Limit
Minimum £200
Representative % APR (variable)
34.9% APR
-
For people with bad credit or building credit.
-
Credit limit £200 to £1,500.
-
Interest-free period up to 56 days on purchases each billing period for cleared balances.
Representative Example – If you spend £1,200 at a purchase interest rate of 34.94% p.a. (variable) your representative APR will be 34.9% APR (variable). Your APR and credit limit may vary depending on your circumstances.
Advantages
✔️ You can check your eligibility before applying to avoid unnecessary marks on your credit rating
✔️ You can still be considered even if you've had any defaults in your credit history
✔️ No income is required, but you do need to make repayments on time
Disadvantages
❌️ Applicants with no credit history may be rejected
❌️ No rewards
6. Barclaycard Forward card
The Barclaycard Forward credit card is ideal for students with part-time jobs looking to build their credit history. This student credit card is ideal if you need financial help at university. Each applicant's credit limit is personalized.
Barclaycard Forward Card
Credit Limit
Minimum £50
Representative % APR (variable)
33.9% APR
-
0% interest on purchases for 3 months (from the date you open your account).
-
Credit limit £50 to £1,200.
-
No annual fees.
Representative Example – If you spend £1,200 at a purchase interest rate of 33.9% p.a. (variable) your representative APR will be 33.9% APR (variable). Your APR and credit limit may vary depending on your circumstances.
Advantages
✔️ Ideal for part-time workers
✔️ Interest-free purchases for the first three months
✔️ Free Apple subscriptions for up to five months
Disadvantages
❌️ You must earn at least £3,000 annually to be eligible
Tips for using your student credit card
Having a credit card is a big responsibility. Although it can be exciting to purchase anything (within reason) at any time you want, you should remember a few things:
- Student discounts: buying things on credit is great, but remember to use your student discounts when shopping
- Open a student current account: student bank accounts usually have great benefits like an interest-free overdraft and linked credit cards
- Consider a savings account: having a savings account is good practice for anyone as it allows you to put any extra cash aside for future use
- Avoid cash withdrawals: withdrawal fees can be heavy, so avoid taking cash out on your credit card
- Minimum repayments: to avoid interest charges and continue to build credit, you need to make the minimum payment on your credit card every month (but we recommend paying more than this).
How do credit cards work?
A credit card is a financial tool that allows you to borrow money from a credit card provider to make purchases. There are many benefits to having a credit card, from building credit to having an emergency backup for unexpected expenses.
As a student, you may only need one type of credit card, but it’s always a good idea to see what other cards are available.
Here are some of the most popular types of credit cards:
- 0% Purchase cards: ideal for spreading the cost of purchases and some credit card companies offer an interest-free introductory period
- Travel credit cards: designed for spending abroad, travel cards reduce the cost of using a card abroad
- Credit builder cards: if you want to build your credit record, you can apply for a card that helps you create a good credit rating
- Reward cards: cards where you can earn rewards like cashback, shopping discounts, and travel miles
- 0% Balance transfer cards: these allow you to transfer an existing credit card balance to a card with 0% interest for a set time
- Money transfer cards: similar to a balance transfer card, these cards can help reduce debt and allow you to transfer money to a direct debit card to pay back overdrafts
When you apply for a credit card, you'll sign a credit agreement. This will state that you agree to make repayments and will also give you details about interest charges. You must read all the fine print and terms and conditions. It's also important to know that some cards offer lower credit limits than others, and eligibility changes depending on credit card type.
Final thoughts
A student credit card is a great way to start building your future. You may not buy a house until later in life, but building a positive credit file can begin as early as eighteen.
Before you commit to opening a credit card account, you must make the right decision. Consider the following:
- Other options: are there other options that may be easier to pay back or have better interest rates? Opening a student account with overdraft options may be better for your needs as the credit limit is sometimes higher than a student credit card.
- Financial needs: can you afford to make repayments on time, and if you can't, do you have any backup options to help you? Only apply for a credit card if you can repay the borrowed balance
- Reason: consider why you want a credit card. If you want to take control of your budgeting and create a good credit rating, a credit card can help you, but if you can't afford to repay the money, it could be costly and negatively harm your credit score
- Quick access to cash: there are better options than a credit card for cash withdrawals as you may end up paying a high fee; consider personal loans if you require a cash advance.
At CompareBanks, we empower you to take control of your finances. You can compare all the banks and financial institutions in the UK in one place to help you find the right student credit card.
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