How to advantageously use installment cards for students

Uniform terms for issuing installment cards for students

Since banks are reluctant to consider students as potential borrowers, some financial institutions set overly strict conditions for issuing credit cards. To be fair, credit cards are a banking product designed for the middle-class borrower with a stable income. Unfortunately, students cannot be classified in this category. The downside is that when providing proof of income, the issuing bank approves only a minimal credit line in most cases.

Today, installment cards for students aged 18 and older are available, but you will need to meet certain criteria. In addition, a number of restrictions will apply, which can later be removed by complying with the financial institution's minimum requirements:

• The credit limit on your first application will be significantly lower. In most cases, the bank sets a maximum lending amount starting from 10,000 RUB.
• The probability of approval will be lower than for other segments of the population. However, compared to a credit card, the approval rate for installment cards is twice as high.
• Changes to the initial credit limit are permitted, but they will happen extremely slowly, requiring additional steps, including the submission of extra information about sources of income.

Let us give a practical example. One bank set a credit limit of 5,000 RUB on an installment card for a student (the amount was determined based on a scholarship certificate). The student diligently followed the bank's requirements and repaid the debt. Six months later, the issuing bank asked the student to submit certificates again, but the scholarship remained at the same level. The bank managed to approve an application for only 35,000 RUB. Nine months later, the student submitted the certificate again while consistently paying off the debt. This time, the bank approved a credit line of up to 50,000 RUB.

Is it possible to increase the credit limit on an installment card for a student aged 18 and older

Having a small credit limit is primarily due to the fact that an 18-year-old student has no credit history. By applying to any financial company, including banks or MFIs, an 18-year-old student will only get approval for the smallest credit line. You might ask, what about the 300,000 RUB credit limit promised by the issuing bank? Here are a few tips on how to increase your credit limit:

1. If a borrower has turned 18, they have no credit history whatsoever. The bank begins to "test" the borrower by granting a credit line with a minor amount, typically no more than 5,000 to 10,000 RUB.
2. The first results in increasing the credit limit should not be expected earlier than in 6 months. During this period, an 18-year-old student without a job must fully comply with the bank's requirements regarding debt repayment.
3. In about 6 to 12 months, the bank will be able to increase the credit limit, but the amount still will not exceed 50,000 RUB. The student will have to prove their solvency once again. To secure approval for a higher credit line, we recommend opening your own settlement account with the bank and depositing funds into it.
4.  You can top up your own funds on the installment card; the bank will see your solvency on its own and quite likely offer to increase the student's credit limit voluntarily.
5. In about 12 months, if all prerequisites for increasing the credit line are met, issuing banks are ready to increase the installment credit limit for students up to 100,000 RUB.
6. The maximum credit limit of 300,000 to 350,000 RUB may be available only under certain conditions. These may include official employment (which is very difficult for students), as well as having your own bank account or constantly topping up your existing installment card.

Only in this way can you count on a future credit line increase from the financial institution.

Which issuing banks issue installment cards to students aged 18 and older

Currently, no-refusal installment cards for students aged 18 and older are available at only 4 financial and credit institutions in the country. We recommend applying to all banks, but availability must be taken into account. For example, some banks require your registration address to match your region of residence. Some financial institutions offer courier delivery. One of the banks may offer delivery via Russian Post. In any case, you need to check the possibility of receiving a bank card in your region of residence.

The leaders in the student installment card segment are:

1. Home Credit Bank, "Svoboda" installment card product.
2. Sovcombank, "Halva" card.
3. Alfa-Bank, archived "Vmesrodeneg" installment card.
4. Qiwi Bank, "Sovest" installment card banking product.

Other financial institutions also offer banking products with installments; however, such cards do not have the options and features provided for typical installment plans. In most cases, such "installment plans" have one profitable advantage: a grace period of up to 120-150 days. Installment credit cards do not provide for uniform debt repayment. You are required to pay the full amount before the grace period expires. If you fail to pay off the credit card in time, a standard interest rate applies, starting from 19% and above.

Installment cards for students have a different interest rate calculation principle if you fail to pay on time. Some issuing banks allow a delay of no more than 5 days, and overall, a standard interest rate starting from 10% per annum applies. In addition, credit cards have a high annual maintenance fee, whereas installment cards are free.

Installment cards also feature cashback (not all of them), and you can earn interest using your own funds. According to the financial services selection service, the broadest card options that will be beneficial for students are presented in the "Halva" card from Sovcombank. This is one of the few banking products that features interesting options and loyalty programs, allowing you to get cash back from purchases and earn a decent amount.

To apply for a no-refusal installment card for students aged 18 and older, we recommend following the link to the official website of the issuing bank, where you need to fill out an application form, submit it, and within no more than 15 minutes you will receive a response with application approval, along with instructions on the delivery and receipt of the banking product in your region of residence. For convenient management of the banking product, we recommend enabling SMS notifications and registering a personal account, where all necessary information for convenient use of the banking product in real life will be available.