Banking 101

We heart piggy banks – but they’re just not that comfy in your back pocket. Money Manual takes a look at cash, credit and all things student banking

If you’re going to uni, you’re gonna need a bank account — and if you’re going to avoid stress, sleepless nights and sobbing in front of your bank manager, you’ll want to learn how to work it like a pro.

Some banks offer current accounts — for day-to-day banking — for anyone aged 11 and up, but what you can do with them, and what they can do for you, changes once you hit ‘student’ status (usually someone studying for a degree or equivalent in full-time higher or further education).

Student bank accounts are designed to help you through your studies

Student bank accounts are designed to help you through your studies: you’ll likely get a debit card (for access to your own money) and an overdraft facility (for access to the bank’s).

You may be eating special- offer beans now but, as future breadwinners, banks go all out to get your student dollar. While freebies like cash, gig tickets and car insurance are designed to be enticing, if you don’t manage your account well you may end up paying more in penalty charges than they’re worth.

Don’t just plump for whichever bank is on campus either: you can withdraw cash for free from most ATMs (avoid those corner-shop machines that charge you for the privilege) and most accounts can be managed online.


This is the deal-maker for student accounts, as you’ll likely have times when you need emergency cash (we’re talking an urgent trip home, say, not getting a boob job or Beats headphones). If your account comes with a £500 overdraft, you can spend your existing balance plus up to £500 of the bank’s money. Any money you pay into your account once you’ve dipped into your overdraft pays off your negative balance first. Shop around for a 0% interest overdraft without fees.

Overdrafts are borrowed money: you may need to pass a credit check to get one (see below) and, like any debt, if you don’t keep on top of things, it can get harder and harder to pay back.

You’ll make interest on any money you keep in the bank, such as in a savings account. With the economy in more trouble than Lindsay Lohan in a Wetherspoon, interest rates are pants-poor — but if you think you can keep a positive balance, look for accounts with higher interest rates.

Paying For It

Cheques: Being phased out but can be useful for paying deposits or bills. You’ll need to keep enough money in your account until the payment clears (which could take a couple of days) or risk penalty charges for bounced (unpaid) cheques.

Contactless Cards: Rather than entering your pin, you wave your card in front of a machine (“these are not the droids you are looking for”) — usually limited to around £20 per spend.

Mobile Payments: There are apps out there that let you use a smartphone like a contactless credit card — you usually have to pre-load the app with money as a security feature and, for spends above a certain amount, you might need to enter a password, too.

Be Savvy; Stay Safe

Never share your pin with anyone — even with the bank — and always shield the keypad when you use a card machine or ATM. If you pay online, check the site is secure (look for the padlock in the address bar) and consider using a service like PayPal (, which uses a password rather than your card details to pay for stuff.

If you pay online, check the site is secure & consider using a service like PayPal

Check your statements carefully and tell your bank if anything seems unusual; definitely tell them asap if your cards are lost or stolen so they can put a block on them.

Don’t be completely seduced by the latest technology — while they make life easier, they also make spending easier, too. If you want to keep a closer eye on your finances, cash is king.

Credit Scoring

Every time you apply for credit — a store card, bank account, credit card, even a mobile phone contract — the lender will run a credit check on you. This is a comparison of your financial history against their ideal checklist. If you don’t meet their criteria, you may be turned down.

1. Each seller’s credit check is based on their own credit scoring system. If you don’t pass with one, you may pass with another (although avoid making lots of applications in a short space of time as this forms part of the criteria).

2. The credit check is all about risk — do you look like a reliable payer?

3. If you’re new to bank accounts and credit, you may not yet have enough credit history to pass these checks.

4. A Student Loan won’t affect your credit rating. You can check your credit history for free at

Managing your accounts well and building up a good rating in the meantime will help — see for more ways to patch up your rating.