If you’re a student in Australia, knowing the ins and outs of available credit options is a crucial step in managing your finances.
Let’s see which are the top credit cards for students in Australia. I’ve tried out different banks and checkd what they have to offer. I will only include the ones that have awesome benefits such as low annual fees and cashback rewards.
I will also teach you about responsible credit card use and how to avoid landing in debt.
But what makes a good credit card for a student, and how do the benefits offered by different banks compare?
“Credit cards can be like a double-edged sword: a powerful tool that can either build your financial kingdom or cut deep into your pockets if not used wisely.”
Finding The Best Credit Card for Students in Australia
As a student in Australia, you need a credit card that is tailored to your unique needs and financial situation. The best student credit cards offer low rates and fees.
Banks such as ANZ, Bankwest, and Commonwealth offer credit cards that fit these criteria.
Consider cards that offer interest-free days, low credit limits, instalment plans, and digital wallets among other features. Coles Student Credit Card and Westpac Student Credit Card are good examples.
It’s important to compare cards and choose the one that offers the most benefits for your circumstances.
It’s also crucial to find an option with the best features and lowest costs. Consider things like annual fees, interest rates, and credit limits.
|Bank||Credit Card||Annual Fee||Interest Rate||Credit Limit|
|ANZ||ANZ Credit Card||Low||Low||Low|
|Westpac||Westpac Student Credit Card||No||Standard||Low|
|NAB||NAB Student Credit Cards||Low||Standard||Low|
|Coles||Coles Student Credit Card||No||Low||Low|
Remember, the right card depends on individual circumstances like income level, need for rewards, or ability to pay off full balance every month.
Choosing The Right Credit Card
When selecting the right credit card, a number of factors are crucial to consider. These include low-interest rates, low or no annual fee, and the presence of complimentary extras like extended warranties and purchase protection insurance.
Here are some of the best student credit cards in Australia:
|Credit Card Name||Bank Name||Annual Fee||Interest Free Days|
|Low Fee Credit Card||ANZ||$0||45|
|No Annual Fee Credit Card||Citi||$0||55|
|Student Credit Card||Westpac||$30||55|
Students should cautiously consider and compare these options before applying. It’s crucial to balance the immediate benefits against potential interest charges and account costs.
Understanding Credit Card Fees
Student credit cards come with various costs that you need to understand before applying. Key costs include annual fees, purchase rates, cash advance rates and fees, and foreign transaction fees among others.
|Annual Fee||This is the fee charged annually for using the credit card. Some cards, like Coles No Annual Fee Mastercard, do not charge this fee.|
|Purchase Rate||This is the amount of interest you are charged on purchases if you do not pay off the full balance within the interest-free period.|
|Cash Advance Rate & Fee||This is the interest and additional fee charged when you use your credit card to withdraw cash or transfer funds.|
|Foreign Transaction Fee||This fee is applied when you make a transaction in a foreign currency or with an overseas merchant. Cards with low or no foreign transaction fees are a good choice if you plan to travel or shop online from international sites.|
These fees affect the cost of having a credit card, so when choosing one, remember to select the card with the lowest fees and matching your usage habits.
Eligibility Requirements For Student Credit Cards
Understanding the eligibility criteria for student credit cards in Australia is essential. First off, you must be a resident of Australia and be over 18 years of age.
More so, you must be enrolled in a full-time course at an accredited school or university, often referred to as studying full-time. Australian Unity or Australian Military Bank may require you to maintain Australian bank account.
Income is another aspect. Many banks, including but not limited to Coles Credit Cards, Coles No Annual Fee Mastercard or Bankwest, require proof of a minimum income.
You should note that this might include Youth Allowance or Austudy support.
Responsible Credit Card Usage
Knowing how to use a student credit card responsibly in Australia is crucial. One best practice is paying off full balance monthly.
This not only keeps your debt under control but also helps you avoid high-interest charges.
It’s also imperative to maintain a proper budget. This involves tracking your expenses and ensuring that your credit card is only used for essential items such as textbooks and study supplies.
Limit your Expenses
Remember, your credit limit is not an extension of your income. It’s recommendable to keep your credit card balance low and never exceed your credit limit.
The last thing you need as a student is to deal with missed payments. Ensure that you pay your bills on time, a day before the due date if possible, to avoid penalties.
Earning rewards on your student credit card is a big plus too. NAB Rewards program or Macquarie Credit Card Rewards Program could be good picks for this.
Appropriate Card Use
Another important tip while using a student credit card is utilizing your card’s benefits. For instance, your credit card might come with added benefits like extended warranties or purchase protection insurance.
Avoid spending on non-essential items, especially if they are out of your budget range. Summing up, a good understanding of the advantages and disadvantages of student credit card use is crucial to maintain a healthy financial life.
Tips For Managing Credit Card Debt
Managing credit card debt is crucial for students to maintain a good credit score and financial health. Here are some tips:
- Pay off the full balance each month: Try to pay off the entire credit card balance every month to avoid high-interest charges.
- Use for essential items: Limit credit card usage to essential items such as textbooks, study supplies, and housing expenses.
- Follow a budget: Maintaining a proper budget helps control spending.
- Use pay-as-you-go: This method can control your expenses and help stay within your budget.
Advantages Of Building Credit History
One significant advantage of student credit cards is the opportunity to build a credit history early.
By making responsible use of your card, you can create a positive credit record that will stand you in good stead for the future.
Whether you need a car loan, a mortgage or a more premium credit card in the future, a good credit history can be extremely beneficial.
That’s why cards from such banks as ANZ, Westpac, and Bankwest Zero Mastercard are worthwhile considerations for students.
Furthermore, student credit cards like the Coles Student Credit Card offer low credit card limits. This is designed to help students manage their spending and avoid falling into significant debt.
Disadvantages Of High-Interest Rates
Of course, student credit cards come with their own set of disadvantages as well. The standout issue is the high-interest rates linked with these cards.
If you’re unable to pay off your monthly balance in full every time, you could find yourself facing steep interest charges. This is why it’s essential to choose a card with the most favorable rates.
Cards like ING Orange One Credit Card and NAB Student Credit Cards typically offer lower rates than others in the market.
While it can be tempting to simply make the minimum repayments every month, this is a quick way to rack up unfathomable debt. We strongly recommend paying off the full balance every month to avoid falling into this trap.
High fees for cash withdrawals and international use are also a common drawback of student credit cards. It’s crucial to familiarize yourself with these potential costs before applying, to ensure you choose the card that is right for you.
Maximizing Rewards With Credit Cards
Australian students can maximize rewards with their credit cards by smart usage. The rewards program on cards like the Qantas American Express Discovery Card or the Coles Student Credit Card offer Flybuys Points for every dollar spent.
However, remember that not all student cards offer rewards.
Here are a few tips to maximize rewards:
- Use the card for daily essential items
- Paying off the full balance every month
- Understand the rewards program of your credit card
However, always read the terms and conditions before applying for any credit card.
Importance Of Budgeting With Credit Cards
Budgeting is crucial when it comes to credit card usage, especially for students. With high-interest rates and potential for overspending, it’s important to stay within a set limit.
Here are some tips for budgeting with credit cards:
- Keep a track of all the expenses. Use online banking to keep an eye on the balance.
- Make a habit of paying off the full balance every month to avoid interest charges.
- Use the card only for essential expenses like textbooks, rent, and study supplies.
Remember, using a student credit card responsibly can help build credit history.
Alternatives To Student Credit Cards
While a student credit card may seem the most fitting option for many students in Australia, it’s worth exploring alternatives. A key alternative is to utilise a debit card linked to an Australian bank account.
These allow you to spend within your means and evade the risk of accruing debt.
Opening a bank account with banks such as ANZ, Bank of Melbourne, Macquarie Bank, or Westpac provides you with a Visa or Mastercard debit card that you can use for purchases, both online and in-store, and you can access contactless options like ‘tap & go’ .
- Coles No Annual Fee Mastercard: Offers the benefit of earning Flybuys Points on transactions.
- Bankwest Zero Mastercard: A debit card with no annual fee.
- ING Orange One Credit Card: Comes with a cashback feature on certain transactions when you use ‘Pay as you go’ mode.
You can also consider using digital wallets like PayPal, which let you make purchases online or even in physical stores using the funds in your account.