Bank accounts and credit cards
There are a wide variety of financial products on the market. Terms and conditions can change at any time so always double check before signing up for any products or services, and always read the small print before signing anything.
It is important that you regularly check your statements - whether you use online banking or receive statements in the post. This can help you keep track of you money as well as enable you to spot any fraudulent activity.
Bank accounts
- Before you open a bank account, think carefully about what you want from your account and how much money will be going through the account. What you can get for £50 today might cost you more later on. Understand the long-term costs for any account that charges bank fees, and be clear on the interest rates you will be charged if you use your overdraft.
- An alternative to high street banks are credit unions - which offer a range of savings accounts and loan products.
Research your options
Consumer watchdog Which has compared some of the most popular student accounts. See the results of the Which student account comparison.
You can compare the latest offers on student bank accounts online using websites such as:
UKCISA offers useful advice on UK bank accounts for international students.
Interest
Interest is the fee you pay to borrow money from a lender. Every bank will charge you interest if your overdraft is unauthorised, or you exceed the agreed overdraft limit.
If you are planning on accessing an overdraft you should go with the bank that offers a zero per cent interest rate for the longest time.
If you want to know more about how interest works, how to avoid it and how to repay it, visit the Money Saving Expert website
Banks on campus
Eastbourne: There is a branch of Natwest in nearby Meads and all the major banks have branches in central Eastbourne.
Falmer: There are branches of Barclays Bank and HSBC within walking distance on the University of Sussex campus.
Grand Parade: All the major banks have branches within walking distance in Brighton city centre.
Moulsecoomb: Cockroft building hosts both Barclays and Santander.
Hastings: Barclays is within walking distance of the campus.
Credit Cards
While you are a student you may have the opportunity to get a credit card. While credit cards can be an expensive way to borrow money, they can also be very useful if used responsibly.
Before using a credit card it’s important to know exactly how much you are going to end up paying. Most credit cards will charge you interest.
Applying for a credit card
Applying for a card is simple and you can apply in a bank branch, by telephone, online or by post. When applying you will be asked to provide information about where you live, how much you earn and whether you have any other cards or credit. The finance company will then do a credit check and if your application is successful they will decide on your credit limit (the amount of money you can borrow). Depending on your circumstances this could be anything from £500 to £10,000 or even more.
To entice new customers, credit card companies sometimes offer incentives such as a 0% interest rate on balance transfers or new purchases for a limited period, free airmiles or gift vouchers. However, when choosing a card it is important to consider things such as what the interest rate will be when the introductory period ends and exactly how you want to use the card.
As well as putting a limit on your spending, the card provider will also set a minimum monthly repayment on your borrowing. This is usually the greater of £5 or 5% of the outstanding balance on the card, but may be lower. Try to avoid only paying back the minimum amount as you will be charged interest on the balance and your debt can quickly grow.
Balance transfers
If you already have a credit card debt you may be able to save money by transferring the balance to another card. Fees for transferring a balance are generally around 2.5% of the total debt being transferred, capped at around £50, but card providers sometimes offer interest-free periods on balance transfers. Therefore, if you have quite a large balance, transferring it to a 0% card could give you a chance to clear the debt without accruing more interest. For smaller debts that can be repaid within a few months it may not be worth switching.
Interest
Interest rates vary from card to card and according to how you use your credit - for example, the card provider may charge different interest rates for cash withdrawals, purchases and balance transfers. Rates can vary from under 10% to as much as 29% APR.
Withdrawing cash from an ATM or using a credit card cheque is usually the most expensive way of borrowing; as well as being charged a higher interest rate there often be a fee of at least 1.5% of the amount you take out. Most providers also charge this kind of transaction fee if you use your credit card overseas.
As well as charging different rates, providers calculate interest from different times so it can be difficult to compare costs fairly.
The APR tells you how much your borrowing will cost over the course of a year, as a proportion of the amount you have borrowed. It includes any upfront fees charged by the lender, spread over the period for which you are borrowing the money. So if you are borrowing £100 at an APR of 9% you will pay £9 in interest and charges over the first year.
Default fees
As well as transaction fees and interest, you may end up paying a fee if you miss a monthly repayment. Most banks charge around £12. Banks tend to insist on cardholders making monthly repayments by direct debit, which greatly reduces the chances of a payment being missed.
Store cards
Many shops offer cards which can be used to pay for goods over a period of time. These cards work in the same way as credit cards, but the interest rates charged are often higher. In addition, they can usually only be used to buy goods from that chain of shops.
Store cards often offer incentives such as a discount on your first purchase or a free gift to encourage you to open an account. Remember, unless you plan to pay off the full balance straight away, they can often work out to be twice as expensive as credit cards.
