Because most young people will have a very limited credit history, their applications for credit cards are likely to be refused.

Without having borrowed any money before, a financial lender is not able to guarantee whether or not they will actually get their money back. Because of this, higher interest rates may be charged to help protect the banks from the high risk that is associated with lending. In some other cases, lenders simply will not give the applicant a credit card because they do not have sufficient credit history.

If you are a student and need a bit of extra financial help, there are some great tips below that can help you.

Build Up Your Credit Portfolio

In order to get credit, you need to have a good credit history. You can start building up you credit portfolio by getting a small cash loan. You will most likely need to have your parents co-sign your loan for you. This means that if you do not make your repayments, your parents can step in to make the payments for you. Obviously, this is not something that you or your parents want to happen, but it will help to reassure the credit lender that the repayments will be made.

Make Your Repayments on Time

When you have your loan, make sure that the monthly repayments are made in full and on time. Timely payments will help your credit rating, as it shows that you are reliable with keeping to the terms of your loan. Future lenders will not be so reluctant to give you credit when you apply for your next loan.

Debit Card Accounts

Another good tip is to sign up for a debit card account. This type of account shows creditors that you have financial responsibility. The main thing to remember is to not use the account’s overdraft facility. Also, you should be careful not to exceed your limit and to always be on time with your repayments. Make sure that you pay attention to the amount of money that is in your account. If the account regularly has a low balance, a creditor will be a lot less likely to give you an approval for your student credit card.

Read The Terms & Conditions Carefully

There are many different terms and conditions which you will have to meet in order to be approved for your student credit card. It is very important that you take the time to read these, so that you can ensure that you meet the criteria. When you’re applying for a credit card, make sure that you compare a lot of different products. You want to find a card that has a low interest rate in addition to a minimal amount of fees that are associated with it.

You should always keep in mind that when you apply for several different credit cards and repeatedly get turned down, there will be a negative impact on your personal credit score. This is why it is always very important that you make sure that you qualify for a credit card prior to submitting your application.

These cards can be a lot better than just diving right into the adult credit cards and all of the risks that are attached to them.

Gift Cards

Gift cards are not credit cards in the traditional sense. But there are gift cards that are made to hold a set value of money which cannot be added to or exceeded. These cards work much like credit cards as they have boundaries that are applied to the value of the card. Young adults are not going to learn about the intricacies of interest rates and fees with these gift cards, but they do offer a great way for newcomers to experience what cards are and how they actually work at a point of sale.

There are also many benefits that are associated with making purchases with gift cards online. However, they are increasingly becoming less accepted because of international control regulations. Prior to purchasing a gift card, make sure you check what it will be able to do. Do not just assume that it will act just like a normal credit card. However, many of the named gift cards that are offered by some banks will generally be accepted just as widely.

Pre-Paid Credit Cards

When we take a step up from gift cards, we will find pre-paid cards. These are like gift cards, but, as the name suggests, you can top them up with money whenever it is required. In a way, these cards behave a lot like debit cards that are connected with a bank account. Prepaid cards do not have the complications such as interest, overdraft fees and other account related charges.

Co-Signatory Credit Cards

The final type of card is a co-signatory card. These cards allow young adults to experience what it is like to manage their personal finances. Many financial institutions offer their products in this type of format, so these cards can actually be just like adult credit cards and may include all of the benefits and the pitfalls.

Using a student credit card or any credit card for that matter can teach you financial responsibility. You can learn to be conscious of what you spend and be responsible about making your payments. You can learn firsthand that while you have credit, it is something to be taken seriously.

If you are disciplined and responsible, your credit history will positively reflect that and you will be building credit history which is important for years to come and the sooner you begin building good credit history, the better.

As long as you handle it well, the feeling of being an adult that you may get from having a student credit card can be a very good thing. You are in the transition period and you are being given a responsibility that comes with being an adult and you have the chance to show that you are indeed an adult and a responsible one.

One of the biggest advantages and one of the main reasons a parent may want a student to have a student credit card, is that it can come in handy during emergencies. Things happen all of the time that people are not prepared for, and students are not immune to this. And chances are, you do not have much money, if any. If you do not have enough money for books, for example, you may need money fast and a student credit card can help. You may have a situation even more dire than that such as an automobile accident or some type of bill, and time may be a factor. Having a student credit card may save the day.

Drawbacks of Student Credit Cards

Not being financially responsible. The main drawback of having a student credit card is the slippery slope that is credit card debt. If you are not responsible with money, a student credit card can get you into trouble very quickly. And it is unfortunate that you could end up paying for that mistake for years and years to come. So the possibility of accruing credit card debt is a huge drawback if you are not good with money. Obviously if you are then there is no worry, but if that is not you, a student credit card is not for you.

With a credit card, it is so easy to just swipe it to make a purchase and worry about it later. Some don’t consider that, you will have to pay for those purchases, and you will have to pay interest on them too. Some students may not have developed a sense of being responsible and paying for what they owe. Especially if their parents are footing the credit card bill, it is just fueling a bad habit.

What is worse is that if you are not using your credit wisely, it is on your credit report. Your credit history is being written, and if you are not being responsible and dependable, it will be known for years to come and that could hurt you when you want to get a car, home, or even a job.

So weigh the benefits with the drawbacks and take an honest assessment of yourself and determine if a student credit card is best for you.

Build Your Future

The combination of these two factors help students to learn how to navigate the world of credit card use while protecting them from falling into deep credit card debt.

However, even with these safeguards in place many students still manage to get into debt which is why students are often warned against getting a credit card.

Important Questions to Ask Yourself

Before you make any decision about whether or not to get a student credit card you have to determine if you are actually ready for one. To figure this out you have to ask yourself a few simple questions. The first thing to ask yourself is how you have handled loans in the past. Maybe you have gotten an actual loan from a bank or maybe you just borrowed money from a family member.

Either way, consider how you repaid that money. Was it difficult for you to save enough cash to make monthly payments? Did you find that at the end of the month you had not saved enough and put off making your payment all together? If this is the case you might not yet be ready for a credit card that would be very expensive to maintain if you missed making your regular payments.

The second question to ask yourself is if you have used a debit card. Debit cards work just like credit cards only the money is automatically withdrawn from your cheque account instead of borrowed from a credit card issuer. But, if you have had a debit card and been able to maintain it without overdrawing your account or spending it down to zero each month then it is likely that you could also maintain a credit card.

The key to using a credit card wisely is to only spend what you can actually afford, so if you do not overspend with your debit card you will probably not do so with your student credit card.

The final question to ask yourself is how close to your budget do you live from day to day. If money is extremely tight, a credit card may be too much temptation for you. Knowing that you have extra money at your disposal can easily lead to overspending and excessive credit card debt.

While it may be nice to have that extra cushion from a credit card it is probably best to wait until you get an extra job or a raise so that your actual cash flow loosens up before you take the big step of getting a credit card.

If you have determined that you are ready to get a student credit card do some research on them. Not all cards are created equal with some having higher interest rates but lower fees and vice versa. Remember that at this time in your life you do not need a fancy credit card with lots of perks nor do you need the cost of one. Get a simple card that suits your needs while you are still learning about finances.

It is up to you to decide if the student credit card benefits outweigh the disadvantages.

As a student you are unlikely to have a high income, even though you could be working part time. Credit card providers are aware of this and take it into account, and that is the main reason student credit cards have a low income requirement, and usually cost less.

But it is still difficult for a student with no prior credit history to be approved for a credit card, and quite often there are additional conditions or requirements. You could be asked questions outside of the normal scope of credit card criteria. Some of the main student credit card benefits are outlined in the following section.

Benefits of student credit cards

• Easy to apply for
• Low or no income requirement for students
• Lower credit limits on student credit cards – intended to assist in avoiding high debt whilst in school
• Rewards offered on the credit card are geared towards student requirements

Drawbacks of student credit cards

• You must be enrolled as a full-time student in an accredited school. If your school is not accredited or you don’t study full-time, you normally can’t apply for student credit cards
• You may need a co-signatory to obtain a card. A few student credit cards don’t require a co-signatory, but many do. The co-signatory is normally a guardian or parent – who will be accountable for paying your debts if you default
• Many student credit cards have a high interest rate. If you don’t have a credit rating, banks charge a high rate of interest to compensate the risk of possible losses
• Banks that provide student credit cards may set conditions – for example, you may be required to open a savings or transaction account with them

Obviously there are student credit cards benefits but also some drawbacks. If you are thinking of applying for a student credit card, be sensible and don’t get carried away with spending. Make an effort to pay your outstanding balance every month, that way you will keep interest costs to a minimum. Failure to do this will result in high interest charges and fees. This is your opportunity to build your credit rating so seize the opportunity.

This is not because they are all bound to live up to their reputation and be reckless, but simply because they are not as used to handling the various forms of finance they must be familiar with to survive on a trip to a foreign country.

The best course of action is to sit down and get all the boring stuff out of the way before you depart so that you can enjoy your time abroad with minimal concern for your financial situation.

Clearly, it is always a good idea for students travelling overseas to have saved enough money to do so without recourse to borrowing or building up debt. Debt can only be forgotten for so long, and once the vacation is over it will come back to haunt you.

To make your trip abroad a relatively hassle-free affair, at least financially, here are a few tips to follow before leaving your home soil:

Tips for students travelling overseas

• Deposit any spare cash you know you won’t require into a high interest savings account so it is making money for you when you are away. This is always a good idea whatever your plans are, whether staying home or travelling. Students travelling overseas who think they may require this money should not lock it away in a fixed term account.
• Link this savings account to your everyday banking account so you can easily transfer funds if you find you are running short of cash abroad. All you will need is access to an Internet cafe to make the transfer when travelling, and then your regular bank card to access the funds via any ATM.
• Set up a trusted family member with everything they need to operate your finances on your behalf should you be unable to. Students travelling overseas can sometimes end up in pretty remote areas and need to know that their finances can be accessed and moved around if local communications are poor.
• Clear your debts before setting off. The last thing students travelling overseas need is to know that they will be returning to unpaid bills that have been accruing interest.
• If you have bills you cannot clear straight away, or ongoing bills that must carry on, make sure you set up automatic payments before leaving so that you will not end in up default with dishonour fees to pay as well.
• Carry a credit card if you are able to get hold of one before you go. Although your credit limit may be low, it can act as a good source of funding for students travelling overseas provided they keep paying the bill in full therefore renewing their available funds.

These credit cards are designed to be a good fit for the needs of a typical student. The best credit cards for students also offer some special benefits to this class of consumers.

Advantages of Student Credit Cards

The best credit cards for students share these benefits:

• Easier to obtain – The credit requirements for this type of card is quite low. The minimum income requirement is set in par with the average earning level of a part-time or casual employee who’s paid close to minimum wage levels. The approval process is also simplified, which makes it easy to apply for one of these cards and receive them almost instantly.
• Tight credit limit – In accordance with the low income thresholds, the credit limit is also kept low. There is no point in approving higher credit for students when they are less likely to repay the debt. Keeping the credit limit low also helps to dissuade the cardholder from overspending.
• Reward scheme – Reward points are offered for purchases made using the card, which can be redeemed for items that are prized by students.

Disadvantage of Student Credit Cards

• The need for a parent/guardian to co-sign the credit application (who will be liable for repayment in the event of default by the student)
• The applicant has to be enrolled full-time in a school that is recognised by the card issuer
• Higher-than-normal interest rates on purchases
• Potentially risky when the card is used to fund education expenses

The Best Credit Card

Considering all of the above, the best credit card for students is the Commonwealth Bank Low Fee Card. The following main features are responsible for making this the best credit card for students:

• Low Annual Fee of only . This fee is waived for the duration of studies if the card holder is a full-time student.
• Up to 55 days interest free on purchases.
• Easy application and approval process.
• Low credit limits.
• Interest rate of on purchases and on cash advances.
• Balance transfers at the rate of
• MasterCard security providing a safe online shopping experience.

If you are searching for a credit card for your child, or if you are a student yourself, then the Commonwealth Bank Low Fee Card is a great fit. You can rest assured that you are getting the best credit card for students.