Who are student credit cards suitable for?
- University or polytechnic students. These cards often cater to full-time students enrolled in tertiary institutions, helping them build credit and manage finances.
- Young adults with limited income. As student credit cards are typically aimed at lower earners, they have correspondingly lower minimum income requirements. This makes them a useful stepping stone to credit for those new to the workforce or with part-time jobs.
- Financially responsible individuals. As with any credit card, responsible spending and account management is crucial. Students can use a credit card to build a good credit history.
What to consider for student credit cards
When looking at different student credit cards, consider the following factors:
- Annual fees. Does the card charge an annual fee? If so, is it worth the benefits the card offers? Don't overlook credit cards with no annual fee.
- Reward and rebate programs. What kind of rewards, cashback, or sign up bonus can you earn? Are they relevant to your common spending patterns? Expect what's offered to be less appealing than on offer with a standard credit card with rewards.
- Credit limit. This is how much credit might be extended. Bank typically provide a guide range. You'll find out what your credit limit is after approval.
- Interest rates. What is the interest rate if you carry a balance? Can you afford to pay it off?
- Eligibility requirements. Does your age, nationality, and income make you eligible? Don't apply if not.
How to compare student credit cards
Just as you would when you compare credit cards, follow these simple steps to help select a student card:
- Assess your financial needs and habits. Understand what you primarily need a credit card for. Will you use it to pay for online shopping, dining, or groceries?
- Research available cards. Look for card options and compare fees, reward programs, credit limit, interest rates, and eligibility requirements.
- Read user reviews. Seek out opinions from other cardholders, particularly those in similar situations as yourself. This will help you gauge if a card is any good or not.
- Apply. Fill out the form and submit your application. Watch for emails or calls from the bank, which may need more details in order to approve the account.
Pros and cons
Pros
- Access to credit with lower income requirements.
- Opportunity to build a credit history.
- Potential to earn rewards and cashback for everyday spending.
Cons
- Possibility of overspending and accumulating debt.
- Limited options compared to what regular cards are available.
- Typically less rewarding than regular rewards credit cards.
FAQs
How do I apply for a student credit card?
To apply for a student credit card, you must first meet the eligibility requirements specific to each card (age, nationality, minimum income, etc.).
After choosing a card, apply online (or in person at one of the issuing bank's branches). You'll need to provide documentation such as your ID, proof of enrollment, andconfirmation of employment or income.
Can a student credit card be used overseas?
Yes, most student credit cards can be used overseas since they are likely to use the Visa or Mastercard payment network. (Amex don't target the student market.)
If you take your card on an overseas trip or use it to buy from an orderseas website, be aware that foreign transaction fees might apply.
How can I manage my spending with a student credit card?
Frequently review statements, set up spending alerts, and create a budget. Keeping a close eye on your spending will help you stay within your credit limit and keep your finances healthy.
