Applying for a (Nationwide) credit card as a student

[dekaff]

DS (20) is in his final year at a London uni. He lived out in year 1&2 but is living at home this year, rent-free. He had a well paid summer internship, and has a casual job, so his own earnings for this year will be £5k+. His credit report is clean, but has no history. He doesn't have a mobile phone contract as he uses PAYG. He has a student account with Nationwide but hasn't applied to use the overdraft facility.

He would like to get a credit card in order to build his credit history. Nationwide did a soft check and said he would not be eligible, but it's not clear why. He has used MSE's eligibility calculator which soft-checks eligibility for credit-builder cards and it only gave him 2 options: Marbles and Aqua. Before resorting to one of those, he'd like to explore why Nationwide aren't approving him because he'd prefer to have his credit card with the same provider as his current account so he can use the same app to manage both.

If your student DC has managed to get a credit card, how did they answer the following questions on the application form?:

• Employment Status - did they say 'Student' or 'Part time' (both are true but only one can be chosen).

• Annual income - did they include the tuition part of their student finance in this even though it goes straight to the uni to pay fees?

• Other household income - if living at home, did they include parent income or just their own? And if you give them a monthly allowance did they include that as income?

No young person gets their first credit card with a high street lender really- you have to work up to that.

He has no credit history, he needs to build
one. That means getting a card with one of these like Capital One who have a crazy % and accept anyone, use it very cleverly so you never pay any interest as it’s always paid straight off. Once you’ve built up your history and score you can then move on to the more high street banks.

DS was given one with a £500 limit when he opened his student account with HSBC. I think he only used it once and they didn't renew it when it expired.

He only applied for a credit card from his current bank a couple of years ago as I suggested he got one as a back up for booking foreign travel. It only gets used once a year. He's never had a phone contract - we paid whilst he was a student and contract was on our phone bill. This has continued even though he's now working (it's SIM only so wasn't worth the bother of switching).
He's just been approved for a mortgage on his own, so not sure how much his virtually unused credit card and lack of other credit contracts actually affect a credit score.

Yes, that's what he has been looking into. Though, according to MSE, only Marbles and Aqua will accept him.

Another option is to apply for the Nationwide student account overdraft, but if he never uses it then it's unlikely to have a positive effect on his credit score.

Capital One (online) do a credit card students can get. DS got one in his 1st year at uni, if I remember correctly he put the amount of maintenance loan / part time wages in as income and they gave him a £500 limit.

He has used it solely to pay for petrol (easier at pay at the pump machines) and he pays it off every month just to try and build up a credit rating.

My children all got the basic Tesco one on their eighteenth birthdays- it has a really low credit limit that builds.

The MSE website said my DS wouldn't qualify for that one. 🤷‍♀️ Did your children have any credit history before then, e.g. phone plans in their name?

No, nothing!

DD has a high street bank credit card as she has regular income from a legacy. She is 19 but none of her friends are able to get one. She is the one who books holidays for her friendship group then they pay her back as she is the only one who can do it in one chunk. It isn’t usual to be able to get a major credit card without regular employment or other notable income.

I had to prove to my bank I had passed my probation to get my first credit card, I was 22, that was though 30 years ago!

@Mrsttcno1

My student son got his first credit card with Nationwide
However he has banked with them and had regular earnings going into his current account since he was 16 and also has a savings account

My D1 couldn't get a credit card with Nationwide either, despite having had an account with them since birth, with payments going in every month. She tried applying for one at a couple of the online banks with no luck either. In the end I got a Santander card for myself and added her as a secondary card holder. I wanted her to have one for emergencies.

When my DD2 wanted a credit card as a student she could only get a £250 credit limit and had to go with one of the specialist lenders - I think it may have been Aqua? Her BF who was in his early 20s and had been working from 18 had very limited options too, so I think age may be more of an issue than whether or not they are a student, even when they have a regular income. Both of them had accounts with major banks that had been used without issue for years. They wanted the cards partly for travel (car hire companies often require credit cards for guarantees) and partly to build a credit record.

Ds(20) applied for and got a nationwide credit card a couple of months ago for the same reason, to build credit score. Applied for and accepted same day.

His student account is with them and I thought he was eligible because he earned around £7k the previous 12 months, but I've just looked and it does say £5k. Perhaps it was because he has a PT job and they can see he is earning consistently every month.

Thanks @NoTouch . My DS has always had casual jobs, so earned more in the holidays than in term time, and from different sources, including a summer internship, casual hospitality and freelance sports coaching, so perhaps the lack of consistency is the issue.