Follow UK Investment Immigration and read the UK Living guide:
1. Credit Card
Although it has become easier to apply for a credit card in recent years, you may still be rejected. Reasons may include unpaid tuition fees, insufficient deposits (less than 2,000 GBP), a short duration of stay in the UK, lack of financial data, or a suspicious residential address.
UK merchants accept Visa more often than MasterCard, so it is best to prioritize applying for a Visa. If you cannot pay off your credit card bill in full at once, you must consider the Annual Percentage Rate (APR) offered by each bank. Some banks offer the first year free of annual fees or waive them for students to attract customers, which should be considered first. Since annual fees and APRs vary among banks, it is advisable to inquire with multiple institutions for comparison.
2. Tax Payment
Remember to apply for tax exemption when opening an account. As we are not UK citizens, we can be exempt from tax on interest earned from deposits. The UK tax year ends at the end of March. Banks will withhold interest income tax from the interest earned on student accounts. According to current UK tax law, foreign students staying in the UK for no more than four years do not need to pay interest income tax (tax-free allowance of 1,965 GBP). However, banks usually do not proactively inform you of this, so please remember to request an R105 form (Not Ordinarily Resident Declaration) from the Inland Revenue when opening an account to apply for interest tax exemption.
However, not every bank provides tax exemption declarations for foreign nationals, as the Inland Revenue authorizes banks to handle this at their own discretion, and the Inland Revenue conducts random checks. Some banks, to avoid the trouble of verification, simply do not offer this service (e.g., Barclays) and require depositors to apply for a tax refund (Tax Voucher/Certificate) from the Inland Revenue themselves later.
3. Overdraft
Most UK banks do not provide overdraft facilities, especially within the first two or three months after opening an account. However, some banks like NatWest, HSBC, and Barclays may offer a certain interest-free GBP overdraft limit (generally around 1,000 to 2,000 GBP) after an account is successfully opened. If you do not want this benefit, you must specifically note it on the application form to avoid accidental overdrawing. Other banks require a separate application, and approval depends on the branch manager. However, banks reserve the right to demand repayment of the overdrawn amount at any time. It is important to note that if a customer overdraws without knowing (i.e., the bank grants an overdraft limit without the customer's consent), the customer can reasonably argue with the bank to request an interest waiver.
4. Cheques
UK cheque clearing takes at least four working days; for example, a cheque issued on Monday will be debited on Thursday, and a cheque deposited on Monday can be withdrawn on Friday. Remember to sign when issuing a cheque; otherwise, the holder will be fined by the bank (around 10 GBP) when clearing it. A post-dated cheque does not prevent the holder from requesting payment. If the holder requests payment before the agreed date, the issuer has no right to refuse.
A bounced (unpaid) cheque in the UK is not recorded by credit reporting agencies unless it is for monthly loan or mobile phone payments. However, banks will keep a record, which may affect future overdraft applications. If you are short on funds and fear a cheque might bounce, you must immediately notify the bank to stop payment on that specific cheque (this also applies to transactions with financial disputes). The stop-payment fee for the Clearing House is 7.5 GBP per item. If you let it bounce, a 25 GBP processing fee is generally charged for standard accounts, while Barclays and Halifax student accounts charge a 5 GBP fee (calculated per day, not per item). In addition, any cheque is valid for payment within six months of the date on the cheque; banks may refuse to honor cheques older than six months.
5. Close Account
When you want to close your account, do not forget to apply to the bank as early as possible; the procedure takes about a week to complete.
