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Credit Cards
> Student Credit Cards - UK Guide
In a nutshell
Credit cards offered to students either as a single product or as part of a bank account package.
Best Credit Card For
Anybody that is in a higher education situation.
Credit Amount
The limit you'll be given for any student credit card will vary from card provider to card provider. You'll probably also find that they will check your incoming money and your credit history before they come to decision on how high your limit will be. In many cases you'll find that student limits will be lower than those given for standard credit cards, although some card companies don't differentiate in this way.
Advantages
As a student your income will probably not come in on a regular basis in the way that a salary does for example. So, you can use a student credit card to cover you for those periods when cash is tight or when you are waiting for your next student loan etc. This can give you more freedom to manage your finances over the time you'll be studying. Many specialist student credit card providers will also offer incentives to get you to take out a card with them. These can include discounts, cash back offers and other benefits. You may also find that the interest rates you'll be charged for a student credit card may be at the lower end of the scale in general credit card terms - card providers want student business for the long haul so may offer concessions here.
What to look out for
Student credit cards may seem to offer a good solution to your cash flow problems whilst you're studying but you must always remember that you're building debt up whenever you use them and don't pay them off in full. Many students use their cards to cover periods when cash is tight but then fail to pay off their borrowings when they have some money. In this scenario you'll simply be adding interest on to your debt which could leave you owing a lot of money once you graduate. For many young people the time when they go into higher education is the first time they'll really have to manage their own finances. It's easy to use a student credit card to excess during this learning curve and to forget that it's not really your money you're spending - you're simply borrowing it from your credit card provider and it will all need to be repaid - with interest - every month. If you find yourself in serious trouble with a student credit card then you may be unable to pay off anything at all every month. In the worst case scenario you could find that your card provider takes legal action against you to recover their money. At the very least this will impair your credit rating which could make it more difficult and more costly to raise any kind of finance in the future. And, if you can't or don't make a minimum payment every month when you're supposed to you'll have to pay extra penalty fines and you may, again, find that you've blotted your credit rating copybook at the same time.
Alternatives
A standard low interest rate credit card is another option you can look at here.
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