When you start in higher education, especially if like most students you are moving away from home for the first time, you will be in a unique financial position. Finally you will be starting to write your own financial history, and the way you approach it can make a big difference to the way your life will work once you graduate.
The best way to start getting a good credit rating is to get a credit card and begin using it well, but most students are fairly short on cash so it isn’t too hard to make mistakes which could follow you for years.
Proof of Enrolment
To start with, to successfully apply for a student credit card is not necessarily as easy as it sounds. Just being a student will not guarantee you will be accepted, but there are things you can do to make sure your application is successful.
Most banks will need proof that you are a student, which means that you have to be in full-time education, usually enrolled in a course at least 2 years long. A student card may be enough, but speak to your admissions department and they should be able to give you a letter that will suffice.
The next thing you should do to successfully apply for a student credit card is make sure you shop around. Many credit card companies and almost all banks offer a student card, but a lot of campuses have one bank nearby or on-site, and their offer tends to be the one that many students opt for.
Unless you shop around for the best deal then although this may be a convenient and easy option, it may not be the best card for your needs.
Especially look at all the perks and rewards the cards are offering, especially those relating to travel, as most people travel more during their student years than they do in later years. If you think this will be the case make sure you check what the implications are of using your card abroad, such as exchange rates and fees.
Guarantors
Because the banks know that students are unlikely to have much money, but they are prepared to gamble that you will be higher than average earners after graduation, they will be trying hard to get you as a customer for the future, so you are in a buyer’s market.
It is unlikely that you will have to prove any income, although if you do have a steady job while you are at college your application will be easier. Some banks might ask for a parent to act as guarantor so you can successfully apply for a student credit card, but this is not always the case.
Don’t opt for a card with the highest possible limit, especially if it is your first card. Make sure that you don’t ever miss a payment, even if you have to beg your parents for help to do this.
Your first credit card will have a major influence on later financial circumstances. Many banks use student credit cards as a way to ‚Äòvet’ future customers, so treat it like a test.
