Students and credit cards - suggestions?

[AMumInScotland]

DS had a prepaid card, but now he's 19 it would be useful for him to be able to have a credit card as an extra thing to cover unexpected expenses etc.

He put in an application for a Student Card from Halifax but got turned down.

Does anyone have experience of a student getting a credit card, or could suggest where might be more likely to give him one? It doens't matter if it quite a low credit limit, as the plan is for it to be really used for the occasional emergency (though he might keep it 'ticking over' with other things during the month, then pay it off)

TIA.

Is his student account through Halifax? It is normally easiest to add a credit card account to your normal student account, as otherwise it is very difficult as a student without a regular income to get a card.

Yes, he has an account with then (well, Bank or Scotland, but its all the same thing) and his student money goes in there. He's had the account for years too.

Credit cards are dreadful things! The longer he can do without one, the better!

Ironically, he may have been turned down because he's too sensible. Credit card companies ideally want their customers to be late payers; they want people who will get into debt and not pay it off every month, and so pay them interest. They make their profit from people who will struggle a bit, and they're not so interested in the regular payers, who actually cost them money.

Would they give him one if you acted as a guarantor for him?

DD2 actually refused a credit card when she opened her student account a few years ago. She thought it would be to tempting to buy stuff she couldn't afford. She still. hasn't got one.

Both my DCs have credit cards with a low limit £200 I think. They were offered them when they opened their student accounts. We encouraged them to take them out as if used sensibly it helps build up their credit history/rating They linked them to their debit account so that they were paid off each month so as not to incur any interest.
So I think they are useful to have as a student.

My thinking is actually opposite to you goinggetstough I think it's not a good idea to have a credit card as a student. I know with DD2 she would have just used it to buy things that she didn't really need. She had to be really firm with the bank and kept telling them she did not need one. She has been fine with out it and has managed with her debit card.

mumee I think it is a personal thing and totally depends on the DC concerned. Mine are both very careful with their money, used the cards rarely and will hopefully benefit from enhancing their credit rating in the future.

I think it is definitely a good idea to start building up a credit history as you will need it if you want to take out a mortgage.

I agree that credit cards are not good, especially for teenagers. I am lucky because we taught ours finance from an early age and thank God they now feel as we do. Nobody in our house has ever had one.
If you are going to encourage it make sure your dc understand all the cons such as increased interest rates, interest added each month and also if not paid the extra interest and any penalty. Make sure they know about reading small print too.

I don't get the fear about credit cards. We buy everything on ours and pay the balance in full at the end of the month. We have extra protection on our purchases if they are faulty, if the card is used fraudulently we get a refund and we get reward points so get John Lewis vouchers twice a year. I think it is better to teach kids to use credit cards sensibly than to discourage them.

AMum - it is odd that he's been declined - usually a credit card is part and parcel of a student account these days. Mine have their's through Natwest.

I do think it depends on the young person whether a credit card is suitable. All 3 of mine have them; ds1 is a bloody nightmare - spends, forgets to pay etc, ds2 only uses his in an emergency and then panics about it and pays it off the minute he has any cash and dd has never used hers (TopShop card gets a hammering though ) They all have £500 limit I think.

I haven't looked into this yet - what is the difference between a student bank account and my son's normal account? Are the rates better?

Both my DC had Barclaycards. I think it is important that they learnt to manage money, so I sat them down and had the talk and they both managed well. Money management is a really important life skill.

I was very recently a student, and going by the conversations about debt in the student bar, I would NOT allow my DD to have a credit card at 19.

I don't understand why a teenager would need a credit card to learn how to manage money. Surely it would be better to learn by doing everyday tasks such as handling their own food shopping and paying their own phone and other utility bills.

Sometimes even the most sensible teenager can be peer pressured into spending outside of their intended budget.

They don't need a credit card to manage money but they do need it for internet purchases, Amazon (for which I wouldn't use my bank card because of limited securit protection). They also need it for emergencies - a defrauded bank account, a ticket home in an emergency, etc., travel abroad and lost/stolen TC's, etc

They don't need a credit card to manage money but they do need it for internet purchases, Amazon (for which I wouldn't use my bank card because of limited securit protection). They also need it for emergencies - a defrauded bank account, a ticket home in an emergency, etc., travel abroad and lost/stolen TC's, etc

I have never had a credit card but none of these issues have affected me. I have lost cards before and needed emergency cash but never had a problem sorting that out. I have an Amazon account and had them accidentally charge me for something and their customer service was great and they sorted it immediately. I also use Paypal and there are plenty of secure ways to pay online now.

I left home very early and have worked from a very young age and not having a credit card never impacted on my ability to manage my monetary life.

Amazon

Each to their own, its just that from my experience of dealing with students and teenagers (I'm a mature student) credit cards are the gateway to debt.

Obviously it depends on the person, but I do also think credit cards teach teenagers that you can spend before you have. Even if paying in full by direct debit each month, you are still learning that you can spend before legitimately paying. Plus it can happen that you overspend without realising and the funds in your account don't end up covering your credit card bill.

Honestly I am really not being judgy, I just don't think they are a good idea from my experience with young people.

But surely you should know how to manage money before having a credit card and not the other way around?

Thanks for the various comments. DS's bank account isn't a student account - he had a bank account with a card from age 13 and just continued with that, changing it to an "adult" one after he turned 18, so that may be part of the issue. We're taking a look at Experian to see if there is some advice on there - he has recently moved address which we think may be part of the issue, since he has no history in the new place yet.

I take the point about money management - but he has found it tricky to make online payments in some places particularly from abroad with either a debit card or a prepaid credit card and the prepaid card are changing their terms and conditions to be a pain in the bum, so a credit card would be useful to him. The alternative is that he has to come to us to do things for him, which I don't think helps him to develop his own independence either.

I've trained him from an early age to understand things like interest rates and the necessity of not buying things you can't afford.

Personally (and as the parent of 3 young adults aged 19,20 and 21) I WOULDN'T be going down the credit card route.

What true emergency can a student have that demands a credit card (assuming they aren't backpacking around the world and are actually at Uni) I have two at University and yes they have had lost cards/ got stranded problems and we have managed without a credit card. I'm sure some are sensible and do keep them from emergencies.. but the majority won't and it's another way to get into debt when the student loan won't stretch.

As an adult I don't have one..and got a mortgage with no problems. They are NOT an essential tool to getting decent credit and let's be honest ..house buying is usually some way in the future for most Uni students.. get them into a job before flinging credit at them!

I'd start by telling him to get an ordinary student account first and see how he manages his overdraft!!!

I got offered one every year with my student account and declined. I don't have one now (at 24) and neither does DP who is 32. I don't need one. If I don't have the money available in my account, I just don't buy it. Bad idea imo.

Don't do it.

It's so easy to get sucked in and end up with more best than you can handle. I'm currently paying off about £8000 of credit cards, overdraft and payday loans. The latter should not be an option for your son, thankfully.