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Everything you need to know about a student credit card

A credit card is a card which allows you to buy goods on credit. You will be required to clear your debt before the end of the month, every month if not the ledner will charge you interest on the debt.

Credit cards can be good if you want to build credit and manage your finances better but if they are misused you could find yourself owing a lot of money to your credit card provider.

Here are a few things you should know and consider when choosing a student credit card

Student credit cards are a bit restrictive:

They tend to offer lower credit limits(usually around £500) and higher APRs are standard. Some may see these are prejudice terms and there might be some truth to that. Student credit cards also have higher minimum payments: these are the minimum you must pay back every month to ensure your credit card provider does not charge you an fees.

Note:

Although paying the minimum payment will prevent you from incurring any further charges you will still get charged interest on the difference between your minimum payment and what you owe per month. This could easily turn out to be very expensive for you and should be avoided at all cost.

Student credit cards help build your credit score:

Student credit cards help build your credit score as they reflect how often you repay your monthly credit card debt on your credit file. They also reflect your credit utilization( this is how often you use your credit to its maximum limit) and a low credit utilization will aid your credit score whilst utilizing our credit card every time to its limit will reflect negatively on your credit file.

Avoid the ATM:

Using your credit card at the ATM will incur you huge fees up to 3% and there are no interest free periods for using your credit card at the ATM. This is even made worse if you use your credit card at a foreign ATM as not only will you incur this charge you will also incur an exchange rate charge.

Credit cards have payment protection cover:

Due to the consumer credit act all goods purchased using a credit card which are over £100 are covered by the payment protection scheme. This means if goods are faulty or were not delivered, then your credit card provider must refund you. This cover does not apply to two seperate transactions not amounting to £100 separately, even if they were bought in the same store.

Finding the best student credit card:

To find the best student credit card you must compare all of them equally. A few things you should look at include

The APR
The interest free period
The rewards
The fees and charges applicable
The credit limit and monthly minimum payment

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Everything you need to know about a student credit card
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