Student Credit Cards
So you want a credit card, but are unsure as to whether or not you will be approved because you are a full-time student? This is where student credit cards come in handy.
Student credit cards are made for people who are studying full-time and only working part-time. The lenders take this into account and usually relax their minimum income requirements so you can be approved for a student credit card. The credit cards also should have a lower maximum limit than other cards, usually around $1,000.
How To Apply For A Student Credit Card
Most banks let you apply online, or over the phone, but there is always the option of going into the branch, if that lender has one. You will need to take a few things with you though, including a drivers licence, or if you don't have one, a proof of age card from the government. You will also need a student card, your employer details, including your payslips, and/or your income shown via a bank statement.
How To Avoid Student Credit Card Fees
You should try your best to pay off the total amount of anything you buy on your credit card within 55 days. This means you won't get charged interest on the purchases you made. If you can't quite do that then pay off as much as you can, so only a little amount will have interest charged on it. NEVER forget to pay off at least the minimum payment due though, because not only will you be charged a fee for missing it, you will also get a bad mark on your credit file which may have an effect on future loan applications. A good way to make sure this never happens is to have a direct debit setup, this is usually a requirement anyway but if it isn't, ask for it to be set-up for you.
Cash advances are a very nasty thing to watch out for. This is when you use your credit card to withdraw cash instead of simply using the credit card to buy things. When you withdraw using your student credit card the interest rate is automatically applied straight away. Most student credit cards will only allow you to use the card for purchases, not cash advances, but still be safe, and check.
Don't be fooled by the credit card limit either, unlike mobile phone caps, the credit limit figure does not stop you from spending over that amount. If you do go over your limit you will be charged huge fees, and will get a bad mark on your credit file. Always keep an eye on your balance to make sure you don't accidentally go over.
Alternatives To Student Credit Cards
If you can't find a 'Student' credit card, you can always try for a regular credit card. Look for one with a low income requirement, this is usually found in the terms and conditions section. Low rate cards and no annual fee cards usually have the lowest income requirements. Platinum cards and rewards cards mostly have higher income requirements.
Some lenders even waive fees for students no matter what product they get, so you could get a regular credit card and get your fees waived anyway. Check with the lender to see if that is the case.
Another totally different option is a variable personal loan. Variable personal loans are better than fixed personal loans if you are after a backup source of cash as you can use the variable loan kind of like a credit card. This is because variable loans usually let you make early repayments and let you redraw, which means you could potentially be approved for a $5,000 loan, get the cash, pay most of it back in to the loan so you aren't paying interest on the outstanding amount, and just redraw the amounts of cash you need, when and if you need it.
Westpac have a great option called a Flexi Loan. The way this works is that Westpac will approve you for a certain amount, say $10,000, but won't give you that whole amount at once. It will be available there for you to use when you like, as little of it or as much of it as you want. You will only be charged interest on any amount of the loan you use. Click here to apply for this Westpac Flexi Loan.