Jump to main content of pageaccessibility informationSitemap
12 Jul 2020

News

Student Credit Cards – handle with extreme care!

Lisa Taylor, analyst at Moneyfacts.co.uk – the money search engine, comments:

“Most banks will offer you a student credit card, which in some cases will be a specific student card, while others will provide you with one of their standard cards.

 “While the spending limit you will be offered will usually be fairly low, (typically around £500), the interest rate charged will not be – in some cases almost 20%.

“While the limits may be small, even a few hundred pounds can prove a struggle to repay with no regular income. And if you find yourself with a balance you cannot repay in full, and can only afford the minimum repayments, this debt could still be with you long after you graduate.

“Take the example of a £500 credit card balance with an interest rate of 18.9%; assuming you are only able to afford the minimum repayment of 2.5% / min £5. This original £500 debt would take you 12 years to repay and cost £487.27 in interest, meaning you would repay virtually double what you originally borrowed.

“Even during your three years of study, this balance would cost you over £200 in interest charges and still leave a balance to repay of almost £340.

“Credit cards can be a great way to get the best online deals and can be ideal to use in emergencies or when travelling, but they should be handled with care. Don’t spend on your card what you can’t afford to repay. If you do you could be faced with a hefty interest bill and what will seem like a never ending debt.

Company / Student package

Credit Card
Limit / Rate

Abbey
The Abbey Account (Student)

£350
15.9% APR

Barclays Bank
Student Additions

£600
14.9% APR

Clydesdale Bank
Student Account

£500
Neg

Co-operative Bank
Student

Neg
18.9% APR

HSBC
Student Service

£500
15.9% Typical APR

Halifax
Student

Neg
17.95% APR

Lloyds TSB
Student

£250
19.9% Typical APR

NatWest
Student

£500
18.9% APR

Royal Bank of Scotland
Student Royalties

£500
18.9% APR

Smile
Student Account

Neg
18.9% APR

Yorkshire Bank
Student Account

£500
Neg

Moneyfacts.co.uk – the money search engine
13.8.07

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

“Students needing to borrow should always first look to their student overdraft, as all providers with the exceptions of Clydesdale and Yorkshire Bank will offer an interest free overdraft facility. If you are getting close to your overdraft limit, speak to your bank as they may be able to offer you either a permanent or temporary extension to your limit – if you don’t ask you don’t get. Don’t just bury your head in the sand and opt for the ‘plastic option’. Whilst it may help you in the short term, if you are on a tight budget, it could prove to be a millstone around your neck for some time to come.”

Moneyfacts Group
Moneyfacts is the UK’s leading independent provider of personal financial information and our data is used and trusted throughout the financial industry. 

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

Think carefully before securing other debts against your home, your home may be repossessed if you do not keep up repayments on your mortgage.

Go Direct.co.uk is a trading style for website purposes of Go Direct UK Ltd.

Go Financial Services is a trading style of Go Direct UK Ltd which is an appointed representative of Personal Touch Financial Services Ltd which is authorised and regulated by the Financial Conduct Authority. Registered in England & Wales Company 5703224. FCA Number 456600

We normally do not charge a fee for mortgage advice, however this is dependent on your circumstances. Our typical fee would be £500

Remortgages | Mortgage Repayment Guide Remortgage Guide | Life Insurance | Mortgage Protection Life Insurance | Decreasing Term Life Insurance | Accident Sickness Unemployment | Accident Sickness Unemployment Cover | Builds and contents quote | Conveyancing Online | Btl Mortgage | Mortgage Rates | Free Mortgage Advice | Online Mortgage Application | Shared ownership mortgages | Site Map