Student Credit Cards
Students are eligible to access special offers from banks that can reduce their fees and interest rates to suit a student’s limited income and budget. Only students who are over 18 years old at the time of application are eligible for the best credit card offers for students.
Best Credit Card Offers For Students
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A Guide to Student Credit Cards
Student credit cards can sometimes be a good idea for a younger person still studying full time. Offering a source of emergency funding when it's needed most, these types of cards can also negate the need to carry cash around.
In most cases, student credit cards are offered with a very low limit of around $300 to $500. This helps keep student debt levels at a minimum, but helps to teach younger people about financial responsibility and repayment obligations that won't break a meagre budget. Most banks also offer these types of cards with very low, or no, annual fees to help keep costs down.
Using student credit cards wisely can also help to establish the beginning of a positive credit file. This can be very useful for many younger people wanting to apply for a car loan later, or to verify credit-worthiness to a landlord.
Unfortunately, if you get started on the wrong foot and end up owing a little more than you can comfortably repay, you may end up building up your credit history on a negative note instead of a positive one.
The key to using your credit card wisely is to try to keep it for emergency use only. Don't view it as a handy source of income, as the interest charges could make this quite expensive.
Are You Ready for a Student Credit Card?
There are some negative beliefs about offering a younger person a student credit card. Some people believe that young people are more likely to be reckless with the available credit, or not take their repayment obligations as seriously as they could.
The general consensus from older people seems to be that a student may misuse a student credit card and end up with bills they can't afford, as well as damage their credit report.
The truth is, most students are quite capable of understanding the consequences of borrowing money. This is especially true when they see the amount of interest accruing on the amount they've spent. This can be a valuable financial lesson for many young people.
Before you apply for your student credit card, ask yourself honestly if you have sufficient income to cover the cost of repaying the money you spend on a credit card. If you have a part time job while you're studying, be aware that it's often a good idea to try and control your spending to only the amount of money you earn.
Having access to a credit card might seem like an easy way to buy the things you want. However, imagine how much more difficult your budget will be if your part-time income is reduced further by making repayments each month to pay it off again.
Before You Apply for a Student Credit Card
Before you go ahead and fill in an application, it could be wise to spend some time sourcing the best student credit card for your particular needs. Not all banks will offer the same types of deals, nor will they have the same fees and charges.
Do a little research on some reputable comparison sites to see what they recommend at the top student credit card and then try to understand why this card ranked more highly than others.
In most cases, it could be a lower interest rate or lower fees that help make this a more attractive deal for students. Some student credit cards offer interest free days on purchases, which can be great if you know you can repay the amounts you spend before the payment due date.
You could also find some banks offer less stringent qualifying criteria for students being approved for a small credit limit that makes your chosen card ideal for you.
The key is to assess the various offers available and see whether any of them fits your needs and your budget.
It's very likely that this card will be the first credit card you've owned without the monitoring of your parents. This can sometimes feel as though you suddenly have a lot more freedom than before and it can be tempting to spend money on items you don't really need.
Be honest with yourself about how well you've handled any kind of debt in the past. Even if this was just borrowing money from your parents, be realistic about how responsible you were in paying it back to them.
Tips for Finding the Best Student Credit Card to Suit You
Always try to locate a student credit card offering a low credit limit. This can help limit the amount you're able to spend while you're on a limited budget and help you to stay out of financial trouble.
Most dedicated student credit cards tend to be offered with low interest rates. While many banks or lenders might advertise very low rates, always take the time to check whether these rates are for an introductory time only or if they're the standard rate you can expect.
If your bank or lender tells you that the low rate is an introductory offer for 6 months, be sure you understand what your rate will revert to when this expires. If the rate is significantly higher, don't be afraid to switch to a different student credit card that offers you an on-going low rate. Be sure to ask if you will incur any penalty fees for switching or closing your account at any time.
You should also ask if the card you're interested in has an offer of interest free days available. Some banks may offer you up to 55 days interest free on your purchases. This means you could pay for something you need at the beginning of the month and you have until the statement due date to repay that amount in full before you will be charged interest on the amount owing.
If you can't afford to repay the amount you owe before this time, it becomes very important that you know what interest rate will be applied to your account until you can repay your balance again.
Where possible, check that the credit card you choose has an online management system via online banking. This gives you easy access to your account and enables you to check your balance or make a payment.
Qualifying for a Student Credit Card
In order to qualify for a student credit card, you will need to be at least 18 years old at the time of application and you'll need to be a resident of Australia.
Be aware that you may need to verify your student status by supplying a student ID card or a letter of enrolment with an acceptable institution to qualify for the best student credit cards. Ideally, you should be studying full-time at a University, secondary school, or TAFE college.
Some banks may also require you to hold a dedicated student transaction account to qualify for a student credit card, so check first whether the bank you're considering will need you to have this before you apply.
Applying for a Student Credit Card
The majority of banks offering student credit cards should offer access to an easy online application form via a secure site. Your information is kept confidential and secure at all times, but be certain you are entering a secure section of the bank's site before proceeding.
The online application should only take around 20 minutes to complete. Be absolutely sure you've filled in the details correctly, as you may be asked to verify them at a branch at a later point.
Try not to leave any sections blank. If you are unsure of an answer, or if you have nothing to write in that section, write ‘n/a' or ‘zero' instead of leaving it blank.
The bank will run a credit check on you to verify your credit worthiness. Ideally, you should have clean credit or even no credit history to speak of. However, you may not qualify if you have any past credit problems evident.
Once you begin the online application process, be sure not to leave the computer for longer than 30 minutes. Secure online sessions are timed to log you out automatically if you leave your computer unattended without completing the application. You'll lose any information you entered if this happens.
Once you've completed the application process, you should receive an instant answer electronically whether your application was approved or not. If your answer was an instant approval, you may be required to visit a branch to verify your ID before you card will be sent to you. You'll need documentation such as your driver's licence, student ID, passport or birth certificate or Medicare card to help verify who you are.
Generally, your credit card should arrive in the mail between 5 and 10 working days after you receive your online approval.
When you do receive your card, be sure that you don't spend any more than the amount available on your approved credit limit. In fact, try to be sure you only spend what you can reasonably afford to pay back so that you keep a low balance wherever possible.
By avoiding credit card debt and displaying financial responsibility with your student credit card, you'll be building a good credit history. This can go a long way towards developing a strong credit history for your future, which can make it much easier for you to borrow money later for a car or a house.
Bankwest Student Credit Card
The Bankwest Lite MasterCard is one of the best credit card offers for students for low rates. For students on a budget, the low rates on balance transfers, plus the low rates on purchases makes this a great value card.
The offer of a low 2.9% p.a. for 12 months on balance transfers can mean significant savings if you’re already paying high interest on other credit card accounts. Simply roll your outstanding balances over to Bankwest and enjoy this low rate for 9 months. You can free up your cash flow and reduce the amount you pay in interest.
Bankwest Lite MasterCard also offers students the benefit of further savings with 11.99% p.a. interest rate on purchases.
Students will need to verify that they are over 18 at the time of application, be studying at Western Australia uni for at least 2 years and should already have a Bankwest Student Account.
Commonwealth Bank Student Credit Card
The Commonwealth Bank offers students the benefit of a low interest rate of 3.99% p.a. for 6 months on balance transfers. Don’t keep paying high interest on your outstanding credit card balances when you can reduce your interest costs and free up your budget.
Commonwealth Bank also offers a no annual fee special for students who also have a Streamline Account with Student Options.
The purchase interest rate on the Commonwealth Bank student credit card is 19.59% p.a. and your card is issued with a microchip embedded in it for added security.
St George Vertigo Student Credit Card
One of the best credit card offers for students is the St.George Vertigo student credit card. Winner of the 2009 Money magazine award for ‘Best Balance Transfer Credit Card’, students can benefit from a low balance transfer interest rate of 4.99% p.a. for 12 months and a low annual fee of $0.
The low interest rate for purchases is just 11.99% p.a., however, if students are able to repay their balance down to zero each month, they could also enjoy up to 55 days interest free on purchases.
When it comes to finding the best credit card offers for students, it’s important to consider the student’s budget and spending habits before you apply.
Editors Choice: Featured Credit Card Deals
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