Manage your student costs and build your credit with a student Visa credit card.
Education is an important first step on the path to a career, but it doesn’t come cost-free. A student Visa credit card can provide you with cash flow to buy books, computers and other supplies when you need them, with the flexibility to pay it back when you have money in the bank. Student credit cards also lay the foundations for your credit history and help you learn how to manage credit. However, using a credit card for the first time isn’t always easy and it’s important to know how they work to avoid falling into debt.
This guide looks at the pros and cons of getting a student Visa credit card, how to compare different options and the key factors to consider before you apply so that you can decide if a card will benefit your studies.
Student Visa Credit Card
The ANZ First Visa is a great first credit card, it is a no frills credit card and you will pay $30 annual fee.
- $30 p.a. annual fee
- 19.74% p.a. on purchases
- 0% p.a. for 18 months with 3% balance transfer fee on balance transfers
- Cash Advance Rate of 21.49% p.a.
- Up to 44 days interest free
- Minimum Income Requirement of $15,000 p.a.
Student Credit Cards Comparison
Rates last updated October 26th, 2016.
- ANZ First Student Card
Minimum income requirement has been updated from $6,000 to $15,000.
July 27th, 2016
- Citi Clear Platinum Card
Balance transfer and purchase offers have been extended.
September 1st, 2016
- ME Bank frank Credit Card
Interest rate changed from 9.99% p.a. to 11.99% p.a. on purchases, balance transfers and cash advanc
September 19th, 2016
What is a student Visa credit card?
A student Visa credit card works in a similar way to most other Visa credit cards. It provides you a line of credit that you can access at millions of locations around the world. The difference is that student credit cards are designed for cardholders who are still studying, and therefore come with lower interest rates and annual fees. You can only apply for a student Visa credit card if you’re currently enrolled in an eligible university or TAFE. These cards don’t usually come with the extra frills that other higher tier credit cards do, so they can be a useful way to manage your cash flow and build up a healthy credit history without large card costs.
Benefits of using a student Visa credit card
Student Visa credit cards come with a range of potential benefits. Some of the most popular features include:
- International acceptance. Visa operates one of the largest payment networks in the world. Visa credit cards are accepted at millions of locations around the globe, both in-person and online.
- Visa perks. With a Visa credit card, you also get access to perks such as Visa payWave (for contactless payments) and exclusive Visa Entertainment offers for presale tickets, movie screenings and discounts on RedBalloon experiences in Australia and New Zealand.
- Build your credit history. If you have limited or bad credit history, getting a credit card could help you build up your credit score. For starters, it will add valuable information to your credit file by showing lenders that you have successfully applied for this type of account, which potentially lowers the risk of them approving another card or loan in the future. But more importantly, if you make payments on time and manage the account well, getting a credit card as a student could also show lenders that you are responsible and can manage other products such as a car loan or mortgage.
- Manage your costs. If spending and repayments are managed correctly, a student Visa credit card is an effective tool to cover short-term cash flow problems. For example, if you’re waiting for a scholarship or government payment to come through, but need study supplies straight away, you could use a credit card to buy them and then pay it off as soon as the money lands in your bank account.
- Learn how to budget. Learning how to handle credit is important. By allowing you to track your spending and providing a regular due date for repayments, a student Visa credit card can be used as an introduction to both credit and budgeting.
Features of student Visa credit cards
While there are many potential benefits to getting a student credit card, there are also a number of factors you need to consider to make sure this type of product will work for you. Key things to think about include:
- Interest rates. You will be charged interest if you carry a balance on a credit card. Student products tend to have high standard variable interest rates for both purchases and cash advances, which means the costs can quickly add up.
- Interest-free periods. Most credit cards offer up to a certain number of days interest-free for new purchases made during each statement period, such as “up to 44 days interest-free”. To take advantage of this feature, you must pay your balance in full by the due date on your statement.
- Minimum payments. When you get your credit card statement, you will see a minimum payment amount that’s usually 2-3% of the closing balance. Only making the minimum payment could lead to ongoing debt and massive credit card expenses. For example, if you owed $500 on a card with an interest rate of 19.99% and a minimum payment of 2% per month, it would take you 2 years and 9 months to pay off the balance and cost an extra $152 in interest charges.
- Annual fees. Student credit cards often come with an annual fee. But many of these products will waive the cost while you are a student, providing you meet specific requirements. For example, the CommBank Student credit card has an annual fee of $29 p.a. that is waived for new customers. Continue to receive an annual fee waiver every year if you meet the minimum spend of $1,000 on your student card in the previous year (on purchases and cash advances only) or present your active student ID in branch to request a refund. .
- Cash advance fees. If you use your credit card to get cash out of an ATM or for other transactions that are considered as “cash substitutes” (such as gambling or even some BPAY payments), you will be charged a cash advance fee. This is usually the greater of a minimum dollar amount or 2-4% of the total transaction cost. You will also be charged interest at the cash advance rate from the time of the transaction.
- International transaction fees. Most credit cards charge a fee of 2-4% for any transactions made in a foreign currency when you’re overseas or shopping online with international retailers. Make sure you consider this cost before using your card for foreign currency payments.
- Late payment fees. If you don’t pay at least the minimum off your card by the due date on your statement, you could be charged a fee of around $20 to $30. Late payments will also be noted on your credit history and could negatively impact on your credit score.
- Overlimit fees. Some credit cards charge a fee of around $20 to $30 if you go over the limit on your account. This could also lead to a black mark on your credit file. You can reduce the risk of maxing out your card by checking your balance through Internet, mobile or phone banking facilities.
How to apply for a student Visa credit card
You can apply for a student credit card online. Once you have compared a range of options, click on the “Go to site” button and you’ll be redirected to the lender’s website. Confirm your eligibility for a student Visa credit card and check what documents you need to apply before proceeding to the online application.
- Age. You must be over the age of 18.
- Enrolment requirements. You must be a full-time student at an accredited Australian education institution.
- Residency. Depending on the credit card and the provider, you must be either a permanent Australian resident or a non-permanent resident who can meet the visa requirements.
- Minimum income. Both permanent residents and non-permanent residents will need to meet the minimum income requirements.
- Personal information. This includes details such as your name, address, contact numbers and driver’s licence or passport information.
- Student information. You will be asked to include information about the university or college you’re attending and the course you’re enrolled in.
- Income. The financial institution will want to see recent payslips to verify your income. If the credit card accepts government payments (such as those from Centrelink) as a form of income, you may also be asked to provide details of your status and the total amount of money you receive. You can provide your accountant’s details if you’re self employed.
- Financial information. You will be asked to provide information about your assets and liabilities. This includes any investments or savings accounts, as well as regular expenses such as loan payments, rent, utilities and groceries.
Student Visa credit cards can teach you about handling credit as well as provide the benefits of credit card ownership. Although the rates of interest are higher than what you can find on a low rate credit card, the income requirements for these credit cards make them an accessible product for students.Back to top