Plastic - Pros and Cons...
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Debit cards:Debit cards are linked to your bank account and when you buy anything, the cost is deducted from your account right away. With some debit cards your transaction will be refused if you do not have sufficient funds in your account. Other cards will allow you to complete the transaction but you will be charged a fee and interest on the overdraft. Of course, as a student you will probably have an interest free overdraft facility and you will only be charged if you go beyond the agreed limit. Debit cards can be used over the phone and for online transactions. You will be asked for certain details, which are printed, on the card. You can also use a debit card to withdraw cash from an ATM machine and get ‘cash back’ when making a purchase in a shop. A debit card normally, also serves as a cheque guarantee card, which means the bank will guarantee your cheques up to a certain limit (usually £100). Pre-paid Debit cards: That is not to say they are free! There are charges and these vary quite a lot depending on the provider. Generally you will be charged an application fee, a monthly fee, a fee to withdraw money and a fee to load up the card. If you use your card a couple of times a week the total monthly cost may vary from around £4 per month to as much as £16 per month! It may be however, that the more expensive cards will give you more options such as places to reload, online account management, a 24 hour reload service and free replacement of lost cards. Prepaid debit cards can be a good choice for students particularly for those reliant on parents for financial support. Rather than the hassle of sending cheques in the post parents can simply transfer money onto your prepaid debit card. This can usually be done online as a direct transfer from a bank account or using a credit or debit card. As an alternative to prepaid debit card you can buy visa, prepaid vouchers which have all the same attributes as a prepaid debit card but are in voucher format. These are ‘Internet safe’ and may be purchased here. Credit Card:Where students are concerned, credit cards usually come with an attached health warning! A credit card is not linked to a bank account and relies heavily on the self-discipline of the user. If you are the sort of student who spends their entire grant in the first few weeks of term then a credit card is not for you! If you apply for a credit card you will be subject to a credit check. Generally, students have not had the chance to build a good credit history and therefore the terms you are likely to get from credit card provider will be unattractive. As a general rule, the better a persons credit history, the better terms they will get. The principle of a credit card is that ‘ you buy now and pay later’. You are billed once a month and if you pay off the whole bill you will not pay interest. If you are late paying or you only pay off a proportion of the bill, you will be charged interest on the whole balance for the month. A credit card can be used in the same way as a debit card (but there is no ‘cashback’ option) for virtually all transactions in shops and online. Occasionally, you may have a pay a small surcharge for using a credit card but not often. You can also use a credit card for cash advances through ATM machines or over the counter in a bank. You will be charged for cash advances. The problem with a credit card is that the providers are happy for you not to pay them (!) as they can then charge you more interest! It becomes a vicious circle; the more you borrow the higher the interest and the less available cash you have to pay the debt. This is how debt problems often start. There are some credit cards, designed for those with a poor credit history, which provide only a small level of credit –usually £250 or £500. If you are determined to get a credit card it may be wise to start with a card like this, with a low credit limit. Interest rates on credit cards are high. You pay for the convenience and unless you have the funds and discipline to pay the balance off each month they may be best avoided.
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If you don’t already have ‘plastic’ its unlikely that you can survive university without it. Plastic is incredibly convenient, it is far safer than cash and it allows you to take advantage of buying online and extracting cash from an ATM at 2.o’clock in the morning. I salute anyone who manages three years at Uni without one but for the rest of us let’s have a look at the options: 
Prepaid debit cards are like prepaid phone cards or gift vouchers. You load them with money and then use them in the same way as a standard debit card. They are not linked to a bank account and you have no facility to overdraw. Because there is no risk of running into debt there are no credit checks and no interest to pay.
