A credit card comes in handy when you need some quick cash for expenses. If you have good financial discipline, a credit card can cover your bills and reward you with exciting perks for spending money. As an international student, a credit card can be a life-saver in situations when there is an unexpected delay in money transfer from home or your salary is still due from your employer. During such periods, you can clear your bills with a credit card and pay the bank back when your money comes through.
Since a credit card in Australia is technically a loan you take from a bank, the bank is very cautious about whom they issue the card to. They assess the risk and issue the card only to applicants with credible profiles. They analyse your credit score, transaction history, income sources, recurring income, and expenses. If your profile earns their confidence, you will be issued a credit card. The credit limit on your card will increase steadily when you spend and back it in time consistently.
However, international students are by default considered as high-risk profiles for many valid reasons. One, your stay in the country is not permanent yet. Two, your current job is most likely a temporary one. Three, it is difficult to track you if you leave the country without paying back the debt. Therefore, obtaining a credit card in Australia is challenging for international students.. But, is it impossible to get a card? No! You may be able to qualify for a credit card by following a few of the basic guidelines, your chances of getting a credit card can improve. Let's find out how, as an international student in Australia, you can get your student credit card.
Let’s dive right in…
How do you become eligible for a credit card in Australia?
To get your application for a credit card approved, make a checklist of the following and tick them all off before applying.
A valid visa
Your visa copy is the most important of all the documents you enclose with your application. Banks expect you to hold a visa that is valid up to a minimum of 9 months from the date of application (most of the banks ask for 12 months).
Income source
The minimum annual earnings of $15000 are expected by most banks. Although student cards with a minimum credit limit, this may not apply. As income proof, you can provide your latest payslips and/or any student allowance you receive at regular intervals.
Credit history
Banks in Australia do not consider the credit score from your home country. You must have a good credit history maintained after you arrived in Australia. If you are applying for your first credit card in Australia with no credit score, your timely payment of taxes, electricity bills, gas, and other utility bills can be used as supporting documents to establish your credibility
You might be asked to provide your license copy and savings account number along with these documents. Check out the bank's website well in advance and prepare the documents.
Bonus tips to improve your chances of success
Maintain a savings account in the same bank you are applying for a credit card in Australia with. Always start applying for a credit card with the bank that has your savings or checking account. If you have recently moved to Australia, find out the popular banks and open an account with the bank that offers credit cards that better suit your needs. Once you have an account, keep it active with regular transactions.
Opt for the lowest credit limit
Your credit card in Australia application form will have an option for you to mention a credit limit that you wish to have. You can also leave it for the bank to decide. International students who have used credit cards in Australia during their stay recommend other international students to leave the decision of credit limit with the banks themselves. If you do want to mention a limit, always mention a small number. It will convey the message that you are not desperate for money and lending you credit would seem less risky to the bank.
Age and residency
You must be 18 years of age and must be able to provide proof of residence in Australia. If you are under 18, you can get a supplementary card to your parent's or guardian's account.
Know your numbers
While choosing a card carefully study the associated fees and interest rates. Check out the card's interest rate on purchases as well as the annual fees. Most cards may waive off the annual fee if you spend above a certain limit and some cards are available for free. Always prefer a low-interest rate because if you don't repay within the interest-free period, a high-interest rate will hurt. Be mindful of what your interest-free period (Usually 30 - 55 days) for your card is and pay within time.
Go high-tech
Banking today has adapted to being hi-tech. Check if your card supports cashless payment and how user-friendly their internet and mobile banking systems are. If your card is functional in your home country, that would be of added advantage too.
Don't keep applying
It is okay if your applications get rejected. You can take your time to build your credit score and reapply after a couple of months. Applying frequently despite rejections will plummet your chances of getting a card as your credibility as an applicant diminishes.
Compare and choose the best
Each card serves a unique purpose. Some cards offer substantial discounts on grocery bills, some are designed for travelers and some cards offer cash back on purchases. Be clear with your purpose for the credit card in Australia, and then pick a card. Many websites offer free services to compare credit cards from several banks, leverage it. Make a wise choice and get the best out of the card.
Having a consistent and healthy credit score right from your student days would be very helpful in the future in Australia. Getting a credit card, paying for things with it, and paying it back on time is one of the best ways to improve your credit score. Even If your credit limit is as small as $200 in the initial months, you can get the limit raised automatically by keeping the card active and through timely payments.
If you are thinking of a card now, here are some of the popular student credit cards in Australia from the top banks
- Commbank Low Fee Credit Card
- Coles Low Rate Mastercard
- Latitude 28° Global platinum card
- ANZ First Credit Card
- The Qantas American Express Discovery Card
- NAB Lowfee Credit Cards
- Bankwest Breeze No Annual Fee card
- Citi clear card
- Westpac Student Credit Card
If you are a student aspiring to pursue higher education in Australia, our expert counselors can help with your study abroad plans. Get in touch now!
