Is a credit card a good idea if you are a student?

Being a student is all about learning. Learning new skills for your future career, learning how to live on your own, learning how to take responsibility for yourself and your future, and learning how to deal with money.

One of the biggest lessons you will need to learn when you move out of home is how to deal with money effectively. While this can mean budgeting and getting a job, it also brings up the question of credit.

When you turn 18, you will technically be eligible to apply for credit – and for many students, this means applying for a credit card. But how can you make sure you don’t stuff it up?

Getting a credit card can have many advantages – it can help you pay for stuff you can’t afford at the time, it can give you bonuses and rewards, and it can teach you valuable lessons in dealing with credit. In fact, there are some companies that specialise in Student Credit Cards in Australia.

A student credit card can be a great way to learn how to only spend an amount you are capable of repaying, and will also teach you how to structure repayments to avoid paying interest on the owing balance.

But only if you use a credit card wisely!


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The first thing you need to think about is what type of credit card you need. Note, that is need, not want.

When you apply for your first credit card, the card provider will look at your credit file to check for things such as defaults and bankruptcy. Bad credit and no credit can make a borrower seem risky, which can either mean their application gets declined, or the card provider charges them more in interest.

You may find that if you don’t have much credit history, you will have to pay more in interest. If this is the case, you need to make sure you always pay off your credit card balance each month. If you carry a balance on a high-interest credit card, you could end up in a lot of debt, very quickly.

Check the terms and conditions on each credit card before you apply, as there may be a minimum income requirement. Make sure you meet any requirements on the card and only apply for one card at a time.

If you apply for a card that you are not eligible for, it is likely your application will be declined. This will be recorded on your credit file and can look unfavourable for future lenders.

The same goes for multiple credit card applications. If you apply for more than one credit card at a time, it looks like you are desperate for credit, and therefore a risk. Credit card providers generally don’t like risk.

It’s not just denied applications that are recorded on your credit file, all credit applications are recorded on there. When a lender sees a multitude of credit applications on your credit file, it’s more likely your application will be denied.

However, if you read the terms and conditions, compare all your options, and only apply for one card at a time, you may be able to find the perfect credit card for your situation. Just be sure you pay off your balance at the end of the month and don’t spend what you can’t pay back.

For those who are ready now, getting a student credit card — if you use it responsibly — can help you take a big step forward financially.