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Wednesday, 21 September 2011

Before opening student accounts, it is expedient to define what the account is all about. A student account is a special account for students in higher institutions, that is, colleges, universities, nursing school, etc. this account allow students to pay money in and out. It also comes with some additional benefits that are not applicable to other types of account such as free overdraft.

With student bank account, you can get a debit card to make purchase from shops and even online stores without having to pay in cash. This account allows you to get overdraft from the company with little or no charges. An overdraft facility offers you the opportunity of spending more than you actually have in your account, although, there is a limit to the amount you can withdraw as overdraft. This overdraft usually comes with free interest rate through the time of being in school.

You have to bear in mind that banks are not Santa Claus; therefore, whatever you borrow from them during your academic sessions will be paid back in full. As a result of this, you must put a check on yourself in regard to overdraft. In most cases, when you stay within the limit of the agreed overdraft maximum, you would not be required to pay any interest fee. But if you go beyond the agreed sum, you might have to pay through your nose because the interest rate is usually big as penalty. You can be asked to pay up to thirty pounds as interest on every of your transaction.

Hence, you have to put all the cost implication into consideration before going beyond your limit. Before you can open the student accounts, you would need to provide some document to prove that you are indeed who you said you are. the documents needed to open the account include birth certificate, passport and visa (for international students), driving license, current UK photo card and UCAS confirmation letter with a conditional or unconditional offer from your school. Like earlier mentioned, banks are not there to give you free money. They know you can become their loyal customer for life if you are treated well. And as a result of this, they can go to any extent to ensure they satisfy you during your school days. You have to be cautious however not to get too attached to the freebies you get from the bank because it can land you in deep waters if you are not careful.

Just like the name suggests, credit cards are cards issued by a bank that provide consumers with credit. This credit gives the individual the opportunity to buy services and products in advance without having the money available upfront. In a way, it follows the ‘buy now, pay later’ mantra. Yes, you will have to pay an added interest fee if you do not clear your credit card statement balance at the end of each month. However, for those responsible spenders who do not rely on a credit card as a means to supplement their monthly income and for those who either clear the balance in full or meet the minimum repayment amounts, a credit card can be a very useful financial tool to have at your disposable. 


So, what can you use credit cards for? Well, to pay for anything you want - but if you are using it to pay for some items such as electricity bills or insurance, alarm bells will start to ring. If you are using a card to pay for essential things such as bills and food, you could end up getting into a lot of debt. As a general rule, these cards should be used for one-off expensive payments and are not intended for everyday use. If you think you are using the card in this way, you would be better off having a look at your overall finances and addressing the situation as soon as possible. 

Taking this into account, what could you use your credit card for?

  • A holiday: If you have been dreaming of that holiday in the sun for a very long time, a credit card could help bring it a bit closer. You could pay for the holiday upfront and then make the repayments each month. In addition, if something was to go wrong such as the holiday company going into administration, you would be more like to get your money back if you have paid by credit card.

  • Online purchases: Most online retailers are reliable and trusted companies, although there are some people who may set up websites simply to extort money from innocent victims. If your goods or services are not to an acceptable standard, do not arrive or are faulty, then a credit card gives you the peace of mind that you will be able to get your money back.

  • Everyday items: Some companies such as Tesco offer their credit card customers incentives such as additional Clubcard points when they use their card to buy their weekly groceries and household items.

  • Expensive items: If you need something right away but do not have the money available now, you could use the card to purchase it and then pay it off. Additionally, if you need to buy an item such as a new washing machine, many credit card providers offer something called a ‘buyer protection scheme’. This means that if you buy a faulty item, the provider will investigate the matter and you could end up getting your money back.