Student credit cards are offered by many banks and credit organizations and they are specifically aimed at young people with no steady income or previous credit history. Very often they come with introductory offers and special rewards like free CDs and discount shopping at selected retailers.

Other advantages of using a student credit card include interest-free period on purchases, rewards like free flights and consumer protection under Section 75 of Consumer Credit Act. (for more details see How Credit Cards Work).

On the other hand, student credit cards tend to have higher-than-average typical APRs of up to 19.9%, the real deal offered to you sometimes being even worse. Cash withdrawal attracts both interest rate and a fee which makes this operation hugely expensive. Failing to make at least a minimum monthly payment will also attract high penalties.
Be wary of taking out a payment protection insurance (PPI) on a student credit card – apart from being a huge additional cost, it is also a waste of money as small print conditions often deprive students of the right to claim an insurance reward anyway.

Credit limits on such cards are usually under £500 and remember that if a credit card is usuful for making purchases, it is not a good way of borrowing money, especially if you are on a tught budget and still struggle to master the art of living to your means and making your own accounts.

Natwest, Egg, Citi Bank and many others all offer special student cards but sometimes the word “student” on the credit card does not mean extra benefits but extra costs for the client (student) to guarantee against the risks of non-payment and is nothing more than a marketing strategy.

Here is a table of some student cards available in the UK:

(click to enlarge)

If you use your credit card sensibly, it will help you to build up a good credit history which facilitates fututre applications for loans and mortgages. But it is extremely important to pay your balance in full and every month since interests on the outstanding debt get accumulated very quickly as student cards usually have much higher APRs than standard credit cards. Another thing is that if you might qualify for a mainstream start-up credit cards with lower APR then it is probably better to take this one.