Outside of your loans, grants, and overdrafts, the next available type of student money that you could consider borrowing from is a credit card. However as you are not earning money and will be studying for a few years, you need to find the best deal,
do not be tempted to apply for cards that offer a vast balance as you find yourself getting in more debt to try and meet the monthly repayments.
Students and credit cards can seem like a dangerous proposition. Still, they can be useful for buying travel tickets home and booking expenses for field trips, etc., but not, however, for massive spending sprees.
The banks that provide student credit cards are careful about the credit they make available – limits tend to be set between £300 and £500 because obviously, most students have little or no earnings.
If you manage your credit card well and make regular repayments, this will reflect positively on your future credit file, and it may make it easier for you to borrow once you are employed and are looking for a more substantial loan such as a mortgage, or a car.
There are only three financial providers offering money for students in the form of a credit card – NatWest and Royal Bank of Scotland (RBS) include a credit card as part of their student’s current account package.
Halifax is the other bank offering a student credit card, but their card and bank account have to be applied for separately.
Once you have your credit card, do not get tempted to go shopping and try to follow the following money tips for student credit cards:
Always try and clear your balance in full each month. If you pay your amount off in full, you won’t be charged any interest. If you don’t, the cost of borrowing can be high.
Never use your credit card to withdraw cash, as it will cost you to do so. You’ll be charged a withdrawal fee of 3.0%. Also, cash withdrawals attract a higher rate of interest than purchases of around 27.9%.
You will also start accruing interest from the day the withdrawal is delivered, so likewise, if you pay your bill off in full at the end of the month, investment can’t be avoided.
Student Money Worries
Going to university is a daunting yet exciting time, but financial worries can overshadow it. It’s not just the general costs of living expenses and books that students money goes on,
but before you even get to university, there are hefty fees to be paid, which is a lot of pressure on parents as well as the students. Most parents would love their children to go to university,
but the financial reality means that many families get into debt, raising money for students with other loans and credit cards.
Combining studying with independent living and finances is a real juggling act for students, and the finance part is not to be taken lightly as it is thought that the average student leaves university with debt between £10,000 – £15,000.
However, many students don’t seem to realize the actual cost of extending their education and underestimate their budgets, which can lead to spiraling debt, making student money worries part of everyday life on top of getting a degree.
There seems to be plenty of advertising and information when it comes to borrowing money with banks offering competitive loan rates and even freebies when you take out credit with them, but there doesn’t seem to be as much ‘eye-catching’ advice or tips for students when it comes to budgeting,
estimating and general student money worries. Because of this, many students look to solve their financial issues by assuming that someone else will help them e.g., the bank, family, or student loan companies. This may be an easy way to raise money in the first year of university,
but student money worries seem to progress as the course goes on, and as the ‘easy credit’ starts to dry up, leaving final year students with huge concern that could affect their degree results.
Managing your finance is all part of the university, but it doesn’t have to take over your studying. Unfortunately, rising costs and fees can mean that borrowing money is the only way to get through college for the majority of students,
but with a realistic approach and by opening up and talking about it, you could avoid taking out unnecessary loans resulting in better money management and fewer student money worries.
The NUS is a massive support to students, and it would be wise to contact them as soon as you are feeling the pressure, they can offer great money tips and help with realistic budgets that will stop the vicious circle of student money worries.