Student Credit Cards
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A student credit card lets you buy your laptop, textbooks, instant noodles or anything else and pay it off later when you're studying at university or TAFE. It can also help you build up a good credit history. Credit cards that are best for students typically have low rates, low fees and minimal extras.
What is a student credit card?
A student credit card gives you a way to buy what you need and then pay off the purchases over time, usually with interest added to the balance. Student credit card accounts in Australia often have lower interest rates and fees than other credit cards, which helps keep account costs down when you're studying full-time. But it's still the same type of revolving line of credit as any other credit card.
If you use it responsibly and pay your balance off each month, getting a credit card while you're studying at TAFE or university can also help you build a good credit history. This will come in handy when you're applying for a car loan, mortgage or any other type of lending product in the future.
How do student credit cards work?
As long as you're at least 18 years old, you can apply for a student credit card to help manage your expenses between paydays when you're studying at TAFE or uni. You can use one of these credit cards to borrow and spend up to a certain amount. The amount you have available to use is your "credit limit" and the amount that you spend is called your "balance".
Each month, you will get a statement and you need to pay at least the minimum repayment amount listed for that statement period. Minimum repayments are usually 2–3% of your outstanding balance. When you get a statement, you will have until the due date to pay at least that amount. This gives you a way to pay off what you spend over time. But it's wise to pay your balance in full for each statement period, otherwise you'll collect interest charges and your debt will start growing.
How to apply for a student credit card
After comparing student credit cards to find one you want, the next step is to apply. You can do this online in about 10-15 minutes. You could also call the bank directly or pop into a branch if there's one near you that's open.
Before filling out an application, make sure you meet the credit card eligibility requirements. These can vary, but generally include:
Eligibility requirements checklist
- Are you at least 18 years old? You need to be over 18 years old to apply for any credit card in Australia. If you are between 16 and 18, you could be added as a supplementary cardholder to a parent or guardian's account. You could also use a Visa debit or Mastercard debit card to make the same transactions you would with a credit card but using your own money instead of credit.
- What is your Australian residency status? Are you an international student? Credit card companies generally prefer you to be an Australian citizen or a permanent resident. If you are on a 500 Student or 485 Temporary Graduate visa, check out our guide on credit cards for temporary residents to see your options.
- What is your student status? Usually, you need to be enrolled in an accredited school, TAFE or university to get a student credit card. High school students are generally not eligible for a student credit card. You may also need to be enrolled full-time to apply.
- How much money do you earn? You must have enough income to be able to manage repayments for at least the minimum credit limit that's available on a card. Income can include Centrelink payments, your wages from full- or part-time work, and even student scholarships in some cases.
- Do you have existing credit history? If a student credit card is the first credit product you apply for, you usually won't have any credit history before opening the account. When the bank or credit provider checks your credit history, it will add a listing to your credit report – and could actually be the first thing on it. As long as there are no blemishes on any existing credit reports, your application should be approved if you meet all of the other eligibility requirements. You could then use your credit card as a pathway to build credit history.
The documents and information you'll need to provide
If you meet the credit card's application criteria, you can apply online at any time. The details you'll need for the online application include:
- Personal information. This includes your full name, date of birth, residential address, email address and phone number. You'll also need to provide a valid form of identification, such as your driver's licence number, passport number or Medicare number.
- Student information. You'll need to include details of the university, TAFE or other institution you're studying at and the course you're enrolled in.
- Employment information. If you work outside of study, you'll need to provide details of your employer and income, such as contact details and recent payslips.
- Other financial information. Details of any assets and debts that you have, including savings accounts or other loans. You will also be asked to estimate your ongoing financial commitments, such as rent, bills and grocery costs. This helps the issuer determine whether or not you can afford to manage a credit card.
What happens after you apply?
Once you have filled out the online application, review all the details and hit the "submit" button. You should get a response within a few minutes. The credit card company will also be in touch if it needs further information in order to complete the application process.
If your application is successful, you should get your new card within a couple of weeks. You'll need to activate it and then you can start using it.
What features can I get with a student credit card?
- Interest-free days. If you regularly pay off what you owe on your credit card by the due date on your statement, you will usually have an interest-free period for each statement cycle, such as "up to 55 days". The interest-free days generally start at the beginning of your statement period and give you a window of time when interest won't be charged on your purchases.
- Low credit limits. Student credit cards can have credit limits as low as $500 or as high as $15,000. The credit limit you get depends on the card, the lender and your individual circumstances. A lower credit limit is generally easier to pay off from month to month and can help you stay out of serious debt.
- Instalment plans. Some credit cards give you a way to pay off what you've spent in instalments over a fixed amount of time. For example, if you bought a $2,000 laptop, you could pay it off in monthly instalments over 6 months and would know exactly how much each payment needed to be. As well as helping make payments predictable, credit card instalment plans sometimes offer low or 0% interest rates.
- Complimentary extras. Some student credit cards will come with additional benefits, such as complimentary purchase protection insurance and extended warranties for eligible items you buy with your card. This could be useful if you're using the card to buy a laptop, expensive text books or other supplies for your study.
- Other features. Student credit cards could come with a range of other features, including contactless and mobile payments, low or 0% interest rate introductory offers and Mastercard or Visa benefits. Keep an eye out for these features when you're comparing student credit cards to find one that offers great value for you.
How much do student credit cards cost?
The cost of a student credit card depends on the features of the card you choose, as well as how you use the account. The main features to consider are:
- Annual fees. Most student credit cards come with a low annual fee to help keep account costs down. Some options may even offer no annual fee, which could help you save on this cost for a limited time or for the life of the card.
- Purchase rate. This is the standard interest rate that's applied to purchases made on the card. Student credit card purchase rates range from around 11% per annum (p.a.) to 22% p.a. The higher your purchase rate, the more interest you will have to pay if you carry a balance on your card.
- Cash advance rate. This is the standard interest rate that's applied to cash advance transactions such as ATM withdrawals, gambling purchases and even some bill payments. The cash advance rate is typically the highest interest rate on a credit card and usually ranges from around 19% p.a. to 22% p.a. The cash advance rate is applied immediately from the time a cash advance transaction is made.
- Cash advance fee. If you use your credit card for a cash advance transaction, you will also be charged a fee of 2% to 3% of the total transaction amount. For example, if you used your credit card to withdraw $500 from an ATM, the cash advance fee would be $10 and $15.
- Foreign transaction fees. Most credit cards charge a fee when you use it to make purchases overseas or with an international retailer online. This fee is usually between 2% and 3.5% of the total transaction. You can avoid this cost by considering credit cards with no foreign transaction fees or other options such as travel money cards. These cards could be useful if you're studying abroad, going on an international holiday or if you shop online with brands that are based overseas.
- Other fees. Other fees that may apply when you have a student credit card include late payment fees and charges for going over your credit limit. Always check the credit card's product disclosure statement (PDS) for full details so that you can factor in all the costs before you apply for a card.
Tips for using a student credit card
Whether or not you've had a credit card before, these simple tips will ensure you know what to do and what not to do when you get your student credit card:
- Only use your credit card for essential items. If you want to buy something but don't need it straight away, consider saving up for it instead. Keeping your credit card at home and saving it for textbooks, groceries and emergencies is a good way to curb the temptation to spend.
- Stick to a budget. You should create a realistic budget that accounts for your necessary expenses (school supplies, bills, groceries), but also leave room for any emergencies expenses you may have. If you stick to this, you'll know to set aside money from your savings each month to pay off your credit card in full and will avoid any nasty surprises when your bill arrives each month.
- Aim to pay your balance off in full every month. Although you're only required to pay the minimum payment each month, doing this could land you with high interest costs and an unmanageable debt. Instead, you should aim to pay off your balance in full each month.
- Pay as you go. While credit card statements usually come once a month, you can choose to pay off the balance more regularly. As well as ensuring that you always meet the minimum repayment, this strategy can reduce the amount of interest you pay and may even help improve your credit score.
How to compare student credit cards
Comparing student credit cards allows you to see features of different products so that you can find one that will suit your needs. We've outlined the main factors you'll need to consider for a student credit card comparison below.
- Consider your individual circumstances. This includes your study commitments, your income from work, Centrelink or other benefits, as well as your ongoing expenses. You should also think about your current money habits to decide whether or not you will be able to effectively manage a credit card.
- Look at the features of the card. Pay particular attention to the standard interest rates and fees, as well as the requirements you need to meet for any student discounts or fee waivers that are offered by the card. This step will help you find a credit card that offers the most convenience and affordability for you.
- Choose the card that suits your circumstances. By looking at the features of a number of cards and considering your circumstances, you will be able to find a student credit card that is convenient and affordable for you.
As a basic guide, the lower the interest rate and longer the interest-free period, the less the interest you'll end up paying. So be sure to compare these features in your search.
Now that you know more about student credit cards, you can compare your options and decide what types of accounts you want to use while you are studying.
FAQs about student credit cards
If you want to know more about getting a student credit card or managing this type of account, check out these answers to some of the most frequently asked questions.
Can I get a student credit card that offers rewards?
Most student credit cards are designed as low-cost options and don't come with a rewards program. But if you're interested in earning rewards for your spending, you can compare student credit cards and rewards credit cards to see which type of card suits your needs. You may also want to consider a rewards debit card or a prepaid travel card that earns points.
I've found a card I like but it's not listed as a student credit card. Can I still apply?
Yes, as long as you meet the eligibility requirements, you can apply for any credit card that suits your needs. Just remember to carefully think about your spending habits and circumstances to decide if a card is right for you.
What happens if I miss a payment on my student credit card?
Not making payments on your student credit card will cause your debt to increase very quickly. Interest will be charged on the balance and you may also be charged a late payment fee of around $10 to $30. If you continue to carry a balance on the card, you will be charged interest on the entire balance (including the late payment fee and interest charges). It could also negatively affect your credit report. Always aim to pay at least the minimum off your card by the due date on your statement and contact your issuer to discuss your circumstances if you're struggling to meet these payments.
I got a credit card as an international student and returned to my home country. What will happen to the unpaid debt now?
If you don't continue to make payments on your Australian credit card, the consequences could include any of the following:
- Your Australian credit card provider may charge additional fees and interest on your account, increasing the total amount of your debt.
- Your Australian credit report may show that you defaulted on a debt. This may make it harder for you to obtain credit if you return to Australia in the future.
- Your credit card debt may be passed on to debt collectors. While most debt collectors in Australia operate nationally, there are some international debt collectors that could aim to recover the debt even when you live overseas.
- The credit card provider may take legal action, which could include suing you for the amount owed or having you declared bankrupt.
Can I earn points for paying my uni fees with a credit card?
Earning points for university fee payments is often tricky because it depends on your card and what payment options the university offers. For example, BPAY is a common option for paying university fees, but it doesn't usually count as an eligible transaction for earning points through a rewards credit card.
Generally, your best bet for earning points for uni fees is to pay by card on campus, or through an online payment system like ANZ eGate, CommBank BPOINT or Citi PayAll (if you have a Citi credit card). It will still depend on how the payment is processed – because it could go through as a purchase or a bill payment. But if it's processed as a purchase, you'll get points in the same way you would for your everyday shopping.
Given that university fees are often worth thousands of dollars, you might want to see if you can make a smaller, partial payment first. This will give you a chance to see exactly how it shows up on your credit card account. If it's a purchase and you earn points, you could put the rest on your card, while if it's not, you could look at other payment options.
Pictures: Shutterstock
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Just interested in student card to continue my study online when I’m in Australia if visa approved…thanks
Hi Omar,
Thanks for your inquiry.
There are some credit cards being offered to temporary residents in Australia but do take note that conditions may apply and you need to ensure that you fit their eligibility criteria to get your application approved.
If you wish to see what the available options might be, kindly check a range of credit cards for temporary residents. You must have a valid, eligible visa. Depending on the credit card issuer, you may need to have a minimum amount of time left on the visa to apply (for example, two years before the visa expiry date). Please ensure to read through the relevant product disclosure statement and terms and conditions of the credit card before you apply.
I hope this has helped.
Thanks,
Ally
I am international student, I want an education loan for my semester fees it’s about $8000.
Can you help me for this concern?
Thanks
Hi Shilpa,
Thanks for your inquiry.
Paying an education/ student loan via credit card will depend on whether the educational institute accepts credit cards as an eligible form of payment. In addition, the agreement between the credit card company and educational institute will need to specify whether the semester fees qualify as purchases. It would be ideal to contact your educational institute before applying for a card.
You may also like to refer to the following list of 0% purchase credit cards.Please ensure to read through the relevant product disclosure statement and terms and conditions to ensure that you got everything covered before you apply.
Cheers,
Jonathan
Hi there
Is there any credit cards that temporary graduation visa holders can apply??
( sub class 485)
Working as full time staff.
Thanks
Hi Chris,
Thanks for your inquiry.
At this point in time, only temporary residents, permanent, and citizens are eligible to apply for credit card services. You may like to refer to the following link for debit cards and offers.
Cheers,
Jonathan
can international student apply for a credit card in anz
Hi Raj,
Thanks for your question.
There are some cards available for temporary residents, but conditions usually apply. You might want to see what options might be available to you.
I hope this has helped.
Thanks,
Elizabeth
Hi is there any other student credit cards other than commonwealth bank and westpac in australia because I really want to know ??
Hi Edin,
Thanks for your question.
Please refer to the blue product table above – there are cards from ANZ, Coles, NAB and St.George.
Cheers,
Shirley