SPEND RESPONSIBLY - Managing credit for students

Gain experience with credit

Having an established credit record can make the leap from college or university to the real world a lot easier. Without a credit history you may be seen as more of a risk to credit providers – including utilities like phone and electricity companies. So something as simple as turning on the lights in rented accommodation can be more difficult if you don’t have a credit history.

Bear in mind that saddling yourself with large debts at a young age can limit your ability to do all the things you want to achieve – like travel, before you settle down. Limit yourself to small amounts of credit that you can manage comfortably.

Use a credit card wisely

If you opt for a credit card, shop carefully. Choose a no-frills card with low fees and interest, and keep your credit card limit low.

Credit cards don’t give you more money - even though it may feel like it. But they do change is the way you pay. Using a credit card is like taking on a loan – one that is repayable with interest. Unless you pay off your card in full each month, you will be charged interest on the outstanding balance. This interest charge can add substantially to the cost of your purchases, and quickly lead to a debt blow-out.

As a student, you should aim to build up a strong credit repayment history - not a big debt. By sticking to just one card – rather than accumulating several, chances are you’ll achieve what lenders are looking for: A healthy record of on-time payments.