Compare student credit cards

If you’re studying at a university or TAFE, changes are you may struggle to make time for a full-time job. This means it can be challenging to pay for school essentials, like textbooks, laptops or work equipment. This is why some students look to credit cards for help. 

Credit card eligibility requirements typically include a minimum income and some form of employment. Card providers also often reject applicants on Centrelink payments. This is why it can be challenging as a full-time student to pay for schooling, let alone get a credit card.

Student credit cards are designed with students in mind. They may come with lower income requirements (minimum of $15,000) but accept applicants with part time jobs or on Youth Allowance. Some student credit cards are also international student-friendly. Normally international students will be rejected from most Australian credit cards. 

Student credit cards are unlikely to come with frequent flyer or rewards programs. They’re designed to be basic to suit a student’s needs. 

It’s very easy for students - particularly young Aussies - to use credit cards in risky ways. 

• Hurting your credit score

Missing a credit card repayment due to a lack of planning and budgeting can hurt your credit score. A recent survey of 1000 respondents by credit bureau Experian found that just one missed credit card repayment results in an average 22 per cent drop in the borrower’s credit score. 

• Spending on non-essentials

Cash advances allow student credit cards to be used for any purpose, but ideally you’d want to use a credit card to help finance your studies. Experian found that more than half of respondents (51 per cent) admitted to putting up to $4,000 on their credit card for a holiday. Only 37 per cent said they paid it off immediately. Be wary of what you’re using your credit card for and if you can realistically pay off that debt. 

• Snowballing debt

Using a credit or debit card, versus using cash, has a way of making us feel like we’re not spending much at all. If you don’t physically see the dollars leaving your hand, it can be difficult to see the debt you’re growing. 

Credit cards are one of the easiest ways Aussies can make debt grow out of control. Especially if you only make minimum repayments - usually around 2 per cent of the outstanding balance or $20.

For example, making minimum repayments on a $3,000 credit card balance at 20 per cent interest would take you over 34 years to pay off. It would cost you $13,254, thanks to interest, by the time you paid it off. 

It’s not all doom and gloom

If you’ve got a budget in place and you’re prepared, a student credit card can be a useful financial tool. Create a spending limit that you won’t cross. Credit cards can have daily limits in the hundreds or thousands. If you choose to get a student credit card, consider setting a limit that you know you can comfortably pay back at the end of the statement period.