Interested in getting a credit card while you’re studying? Learn about your options and compare Australian student credit cards here.
Student credit cards can help you manage your expenses and free up cash flow when you’re studying. They can also lay the foundations for future lending options such as car loans or mortgages. This guide looks at exactly how a student credit card works, the pros and cons of using a credit card while studying and how to compare cards so that you can decide if this is an option that will work for you.
Student Credit Cards Comparison
Rates last updated February 27th, 2017.
- Bankwest Breeze MasterCard
New balance transfer offer of 0% p.a. for 21 months with 2% BT fee and 12.99% p.a. on purchases
December 12th, 2016
- Citi Simplicity Card
0% p.a. for 9 months has been updated to 15 mos. on balance transfers. Offer ends 30 June 2017.
January 13th, 2017
- NAB Low Rate Credit Card
Balance transfer period changed from 15 to 18 months, and is valid until 31 May 2017.
January 23rd, 2017
Compare the Best* Student Credit Cards
Compare different student credit card options and their features below.
|A credit card which offers $0 annual fee for the life of the card, combined with a low interest rate of 11.99% p.a. on purchases.|
|A $0 annual fee card for the first year designed for tertiary students.|
|Get a 0% p.a. for 6 months with the student credit card.|
|This $0 annual fee credit card offers a low introductory rate on balance transfers and access to the Citibank Dining program|
What is a student credit card?
A student credit card allows you to borrow money up to a certain amount every month. You can then choose to pay off the balance over time (with interest charges), or in full at the end of each statement period.
Australian student credit cards work in the same way as other credit card options but are designed specifically with students in mind. You also usually need to be enrolled in part-time or full-time study to apply and will need to provide your student number and proof of enrolment during the application.
As a result, student credit cards tend to have low credit limits and low annual fees to help make them more affordable. They also typically have very basic features that are designed to help you learn how to manage your money without incurring massive costs.
How much will a student credit card cost?
The cost of a student credit card varies depending on the specific features of individual cards. 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 for a limited time or for the life of the card. Factor the cost of an annual fee into your budget and check the terms and conditions for any annual fee waivers that are available for students to help keep your card affordable.
- Purchase rate. This is the standard variable interest rate that’s applied to new purchases made on the card. Student credit card purchase rates range from around 10% 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 variable interest rate that’s applied to cash advance transactions such as ATM withdrawals, gambling purchases, payment for foreign currency 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 worth around 2% to 3% of the total transaction cost. For example, if you used your credit card to withdraw $500 from an ATM, the cash advance fee would be $10-$15. The high cost of cash advances means they should be avoided as much as possible when you have a credit card.
- Foreign transaction fees. Most credit cards charge a fee when you use your card to make purchases overseas or with an international retailer online. This fee is usually between 2% and 3.5% of the total transaction and can make it more expensive to travel or shop online with a credit card. You can avoid this cost by considering credit cards with no overseas transaction fees or other options such as travel money cards.
- 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 for full details so that you can factor in all the costs before you apply for a card.
Features of student credit cards
Student credit cards come with a wide range of other features that vary depending on the specific card you choose. Some of the key details to consider include:
- Interest-free days. If you regularly pay off your balance in full by the due date on your statements, you can usually access an interest-free period for each statement cycle, such as “up to 55 days”. The interest-free days start at the beginning of your statement period and are available until the end of that period.
- Low credit limits. Student credit cards can have credit limits as low as $400 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 reduces the risk of serious debt.
- 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.
- 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.
Will a student credit card suit your needs?
Student credit cards offer a lot of flexibility when it comes to cash flow but they are not right for everyone. Consider the following key questions before you apply for a student credit card to decide if this option will suit your circumstances and needs.
- Why do you want a credit card? Is it to manage your expenses between paydays, to have access to funds while travelling or to build up your credit? Thinking about your reasons for wanting a credit card will help you figure out if it’s right for you and also make it easier to compare different options.
- Are you planning on applying for other loans in the future? Lenders consider your credit history when you apply for any form of credit, including cards, personal loans, car loans and mortgages. Getting a credit card and using it responsibly can help you build up a good credit history and credit score so that it is easier to get approved for other financial products in the future.
- Will you be able to pay off the card in full every month? Paying off your card in full helps you avoid interest charges and reduces the risk of debt. Looking at your current income and budget, then considering how credit card payments would fit in, will help you figure out if a card is the right option for you at this stage of your life.
- Are there other options you should consider? Depending on your needs, there may be other financial products or plans that are more affordable than a credit card while you’re studying. For example, if you want to have funds in an emergency, you could consider opening a savings account and putting some of your own money aside for unexpected outlays that may arise. This could help keep costs down as you’ll avoid the potential interest charges and debt that can come from using a credit card if you can’t afford to pay it off in full.
If you have regular income and can manage your expenses well, then a student credit card could be a useful tool to help with cash flow when you have a lot of expenses between paydays. But if you struggle to manage your money or find that you can’t afford everything you want, then it may be better to stick to using your own money. You may even be able to save on banking costs by considering a student bank account that charges fewer fees when you’re studying.
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 items that are essential. This strategy usually stops impulse spending, which will run up a credit card in no time. 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 emergencies is a good way to curb the temptation to spend.
- Try to pay cash for your everyday spending. Remember that credit card spending has to be paid back and could lead to interest charges and other fees if you carry a balance. For everyday spending, you may want to consider using a student debit card, which allows you to use your own money and doesn’t lead to interest charges.
- Follow a monthly and weekly budget. That way if you spend more in one week, you can adjust your spending for the next week so that it is affordable based on all your financial commitments, including credit card payments. Get started with our free budget planner.
- 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.
- Try to save a portion of your income in an emergency account. Ideally, you should aim to put away 10% of your income. If that’s too difficult as a student, aim to save at least 5% of your pay so that you have some money set aside if something unexpected comes up. This money will help keep your costs down in an emergency, even if you have to use a credit card to pay the difference.
- Make sure you have some money budgeted for fun. Credit cards can make it tempting to spend money that you don’t actually have. By budgeting for luxuries or a bit of fun, you’ll be in a better position to keep your spending and your credit card balance in check.
- Ask for split payment options. Many businesses allow you to split payments between different cards, or even allow you to use a combination of cash and cards. This type of payment can be a useful way to keep your credit card balance down while also allowing you to keep some of your own money available for other spending.
How to compare student credit cards
If you decide to get a credit card as a student, it’s important to make sure you find an option that’s right for you. Comparing student credit cards allows you to see features of different products side-by-side so that you can find one that will suit your individual circumstances and 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 and your ongoing expenses. You should also consider 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/s. Pay particular attention to the standard interest rates and fees, as well as the requirements to meet any student discounts or waivers 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.
Case study: Choosing the right student credit card
Aisha is studying law at the University of Sydney and has a casual job at a cafe. She is just about to start her second year and is considering getting a credit card to help pay for all her textbooks and other study materials at the start of the semester.
This would allow her to pay off the purchases over time, leaving her with enough cash to cover her rent and other everyday expenses. She also plans to pay it off in full each month, so she wants to look for an option that has a competitive interest-free period.
|Card||Standard purchase rate||Annual fee|
|ANZ First Student credit card||19.74% p.a.||$30 (waived in the first year)|
|CommBank Student credit card||19.74% p.a.||$29 (waived in the first year and in each subsequent year if you spend more than $1,000 or show your eligible student card at a CommBank branch)|
Rates and fees used are for example purposes only.
Based on these details, Aisha decides to apply for the Commbank Student credit card because it offers a $0 annual fee for more than the first year, and also offers more interest-free days for purchases.
How to apply for a student credit card
After comparing student credit cards to find the right option for you, the next step is to apply. You can do this online in about 20 minutes by clicking the “Go to site” button for your chosen card. You’ll then be taken to a secure application page. Before filling out your information, make sure you meet the credit card application requirements. These can vary, but generally include:
- Age. You need to be over 18 years of age in order to apply for a student credit card.
- Residency status. Credit card companies generally prefer you to be an Australian citizen or a permanent resident. If you are on a visa, check out our guide on credit cards for temporary residents to see your options.
- Student status. You must be enrolled in an accredited school or university to get a student credit card.
- Co-signer. You may need to provide a co-signer to apply for your first student credit card. The co-signer is usually your parent or guardian and will then be responsible for your debt if you can’t make repayments on your card.
- Savings or everyday bank account. In some cases, you may be required to have an everyday bank account or savings account with the same bank that issues the credit card.
- Income. You must have enough income to service the minimum credit limit available on the card. Income can include your wages, as well as Centrelink payments and even student scholarships in some cases.
If you meet these application criteria, you can fill out the online form. You’ll need to provide a range of details, including:
- 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 institution and 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. Your credit card application will ask you to include 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 I've applied?
Once you have filled out the online application, review all the details and hit “submit”. You should get a response within a few minutes. The credit card company will also be in touch if they need further information in order to complete the application process.
If you’re approved, you should get your new card within a couple of weeks. You’ll need to activate it and then you can start using it.
From textbooks and stationery to tuition fees and everyday expenses away from home, there’s a whole range of costs that are specific to students. Now that you know more about student credit cards, you can compare your options and decide on the right types of accounts to suit your needs while you’re studying.Back to top
The most popular questions about applying for student credit cards and using them
- Q. Can I get a student credit card that offers rewards?
A. 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 may want to compare student credit cards and rewards credit cards to see which type of product suits your needs. You may also want to consider a rewards debit card.
- Q. I am an international student. Can I get a credit card in Australia?
A. There are some credit cards available for temporary residents in Australia, but the eligibility criteria may be different depending on your visa type and the length of your course in Australia. You can find out more about credit cards for temporary residents on this page.
- Q. What happens if I miss a payment on my student credit card?
A. 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. Find out exactly what happens when you carry a balance here.
- Q. I got a credit card as an international student and returned to my home country when I still had a balance on the card. What will happen to the debt now?
A. 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.