The best UK credit cards for university students

Jul 21, 2021

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Editor’s note: This story has been updated with new information.

University can be a new chapter in an adult’s life. You may be living away from home for the first time, perhaps have your first part-time or casual job and have some new expenses like tuition fees that you’ve not had before.

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It may also be the first time you’ve considered your own financial accountability and be looking at the path to financial independence. You may have no credit history, but be looking to starting building it. A credit card could help you achieve that if you manage your expenses responsibly and understand how credit works.

Related: 7 reasons you shouldn’t be scared of credit cards

We’re looking at the best credit cards for U.K. university students in 2021:

In This Post

Related: How credit and credit scores work

Barclaycard Forward Credit Card

If you have no credit history as you’ve never needed access to credit, you may be looking at the easiest and most cost-effective way to get your foot in the door. The Barclaycard Forward Credit Card has no annual fee and is designed for those who are just starting to build credit for the first time.

It comes with a credit limit as low as £50, which is useful for those not used to having access to credit. With a low credit limit, you can only make a few small purchases before you reach your credit limit and have to repay the balance before you can make any more purchases.

You’ll receive interest rate reductions of 3% in the first year and then 2% in the second year if you meet the same requirements as the cashback conditions. Keep in mind that there’s a 2.99% fee for foreign purchases, so try to use a no-fee card like a travel card for purchases in foreign currencies.

Representative APR: 33.9% with a purchase rate of 33.9% (variable) based on an assumed credit limit of £1,200.

You can apply for this card here.

University of Glasgow. (Photo courtesy of Getty Images)

Tesco Bank Foundation Credit Card

If you’re more interested in earning some points from your credit card while still building credit at the same time, the Tesco Bank Foundation Credit Card does both. There’s no annual fee and a low-income eligibility requirement of £5,000 per year.

Related: New to points and miles? Check out our beginner’s guide!

It can help you build credit with low credit limits and low monthly repayments. Thanks to its partnership with TransUnion, you’ll also have access to your credit score and can monitor this to understand how it can go up and down, and the difference between good and bad credit. If you manage your credit well, you may be eligible for credit limit increases.

But what is really great about this is that you will collect 1 Clubcard point for every £4 spent (£4 minimum) in Tesco and 1 Clubcard point for every £8 spent (£8 minimum) everywhere else. While this earning rate might not sound very high, Tesco Clubcard points are extremely valuable and useful — especially if you’re loyal to Virgin Atlantic, as it’s the exclusive airline partner of Tesco Clubcard.

Representative APR: 27.5% with a purchase rate of 27.5% (variable) based on an assumed credit limit of £1,200.

You can apply for this card here.

The Platinum Cashback Credit Card from American Express

We write a lot about American Express cards here at TPG U.K. because they tend to be the most rewarding in terms of the best welcome bonuses, the highest points earning and some fantastic travel benefits. However, some of the cards also carry substantial annual fees, particularly for the most premium cards.

The reason we are including an American Express card in this list is while it’s not specifically designed for building credit, the eligibility requirements are very low. For example, there is no minimum income required. And while it does have an annual fee, the fee is low and the cashback on offer is very generous.

The card offers a generous introductory cashback offer of 5% on purchases up to £125 total in the first three months of card membership. If you’re able to maximise the welcome bonus offer of 5% cashback, you can cover the annual fee several times over.

After the first three months, you’ll receive 1% cashback on up to £10,000 in purchases each year, with this rate increasing to 1.25% for total spend over £10,000, which is unlimited. Say you spend the £2,500 in the first three months and then a further £20,000 over the other nine months of your card membership year, you would receive £350 in total cashback (being £125 + £100 + £125). Now, most students will take out a loan for their university fees through the Student Loans Company and repay it at a later date if and when they earn enough money after graduation.

However if you are in the situation of wishing paying your tuition fees upfront (perhaps because you are already in the financial position to do so), see if they can be paid on American Express as it may be a great way to earn some real cashback (though most universities likely won’t accept Amex as a form of tuition payment).

That’s not a bad return for a £25 annual fee card.

You can read a full review of this card including its travel benefits and representative example here.

(Photo by ViewApart /Getty)

Bottom line

University can be a huge change to any adult’s life. Building credit may be the last thing on your mind as you grapple with exams, adulthood and potentially moving away from home. However, if you have been considering building credit and getting into rewards, these are our top picks for cards to consider.

Before you get to applying, the most important thing to understand is how credit works and how to best manage your expenses and credit usage responsibly.

Featured image courtesy of Getty Images.

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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