A student credit card can solve all your problems, helping you pay for online purchases and cover emergency expenses. However, you need a financial understanding and know how to correctly use the student credit card.
This post will discuss everything you need to know about getting Australia's best student credit cards. So keep reading!
1. What Is A Student Credit Card?
A student credit card is specially designed for students with inconsistent employment or credit history. It allows you to buy essential items you need and then eventually pay off credit transactions over time with interest.
Using a student credit card responsibly while studying at university or TAFE and paying off your balance each month can help you improve your credit history. This can also be useful in the future when you apply for a mortgage, car loan, or any other form of lending product.
2. How Does A Student Credit Card Work?
A student credit card works the same way as a standard credit card, but it typically has lower annual fees and credit limits. You can use these cards to either spend or borrow a certain amount. The amount you spend is your "balance," and the available amount left to use is your "credit limit."
When using a student credit card, you will receive a monthly credit statement requiring you to pay a minimum repayment amount specified for a particular duration.
Usually, minimum repayments are 2 to 3 per cent of your remaining balance. Remember that you must pay the minimum repayment by the due date. This will enable you to pay off the amount you spent over time.
However, making a full monthly payment is advised because if you don't, you may incur interest charges, and your debt might keep increasing.
3. How To Choose The Best Student Credit Card?
Once you decide to get a student credit card, there are several factors that you need to consider. Most banks in Australia offer credit cards mainly designed to meet the requirements of tertiary students, and some even provide several other options.
So it is essential to know what credit card features will work best for you. Here are some of the features you can consider when choosing the best student credit card:
Here is a list of banks that offer the best student credit cards in Australia:
4. How To Apply For A Student Credit Card?
After you have found a suitable credit card, the next thing you need to do is apply for it. The application process hardly takes time; you can easily do it in 20 minutes online. You can also visit the branch or call the bank directly.
Before filling out the credit card application form, you must ensure that you fulfil specific eligibility requirements. Remember, these requirements may vary from one bank to the other, but it generally includes the following:
5. What Are The Advantages of A Student Credit Card?
6. What Are The Disadvantages of A Student Credit Card?
7. Tips For Using A Student Credit Card
If you are using a credit card for the first time, the simple tips mentioned below will help you to know more about the dos and don'ts of using a student credit card.
8. Should You Get A Student Credit Card?
It is essential to run your estimates, do thorough research, and evaluate whether there is an alternative before you sign up for a student credit card.
If you have yet to apply for one, you can always use a debit card that allows you to spend money in your bank account without the risk of debt.
Credit cards are designed for convenience and should only be considered a necessity. So whether you have a credit or not, you should only spend money on something you can afford.
9. Common Mistakes to Avoid with Student Credit Cards
While student credit cards can be advantageous, being aware of potential pitfalls is essential. Avoiding common mistakes can help you make the most of your credit card without falling into financial traps.
Ignoring Minimum Payments: Neglecting to make at least the minimum monthly payments can result in penalties interest charges, and negatively impact your credit score. Always prioritize meeting the minimum payment requirement to maintain a healthy financial standing.
Excessive Spending: A student credit card is a financial tool, not an endless source of funds. Resist the temptation to overspend, especially on non-essential items. Strive to use the card responsibly and within your means.
Overlooking Fees: While student credit cards often have lower annual fees, it's crucial to understand and be mindful of any additional charges. Be aware of fees related to late payments, cash withdrawals, or international transactions to avoid unexpected financial burdens.
Neglecting Budgeting: Failing to establish a budget can lead to uncontrolled spending and difficulty making timely payments. Maintain a clear budget that outlines your essential expenses and allows you to allocate funds responsibly.
10. Maximising Rewards and Benefits with Your Student Credit Card
Unlocking the full potential of your student credit card involves understanding and utilising the available rewards and benefits. Here are strategies to maximize your credit card perks:
Strategic Spending: Leverage your credit card rewards by aligning your spending with available benefits. Some cards offer cashback or discounts on specific categories such as groceries, textbooks, or dining. Tailor your purchases to capitalize on these rewards.
Timely Redemption: If your student credit card has reward points, ensure timely redemption. Points may have expiration dates or lose value over time. Regularly check your accumulated rewards and redeem them for optimal value.
Utilise Additional Features: Explore the supplementary features offered by your student credit card, such as extended warranties, purchase protection, or travel insurance. Understanding and utilizing these features can add significant value to your credit card experience.
Stay Informed: Credit card issuers may introduce new rewards programs or limited-time offers. Stay informed about any updates or promotions to take advantage of enhanced rewards or exclusive benefits.
By avoiding common mistakes and actively seeking to maximize your credit card rewards, you can make your student credit card a valuable financial tool that goes beyond simple transaction facilitation.
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