Credit Card comes handy when you need some cash for quick 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 very helpful in situations when there is an unexpected delay in money transfer from home or your salary is still due from the employer. In those times, you can clear your bills with a credit card and pay it back later.
Since a credit card 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 less-risky profiles. They scrutinize 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 with time when you spend well but pay it back in time regularly.
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 is challenging for international students. But, is it totally impossible to get a card? Definitely not! If you follow the basics right, your chances of getting a credit card improves. Lets see how, as an international student in Australia, you can get your first credit card.
How do you become eligible for a credit card?
To secure a credit card successfully, make a checklist of the following and ensure you 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).
The minimum annual earning of $15000 is expected by most banks. For basic student cards that come with a minimal credit limit, banks may rule out this condition. As your income proof, you can show your latest pay slips and any student allowance you receive regularly.
Banks in Australia do not consider the credit score from your home country. You must have a good credit history maintained after your arrival in Australia. If you are applying for your first credit card with no credit score in Australia, your timely payment of taxes, electricity bills, gas and other utility bills can be used as supporting documents to establish your credibility.
Along with these documents, you might be asked to provide your licence copy and savings account number with the bank. 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
Always start applying for a credit card with the bank that has your savings or checking account. If you have recently moved to Australia, do research on popular banks and open an account with the bank that offers credit cards suitable to your needs. Once you have an account opened, maintain it active with regular transactions.
Opt for the lowest credit limit
Your credit card 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 secured credit cards successfully in the past suggest one thing from their experience. Leave with the bank the choice of setting your credit limit. If you are to mention a limit, always mention a small number. It will imply 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 be able to provide a 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 and annual fee. Most cards waive off the annual fee if you spend above a certain limit and some cards just come 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.
Banking today is hi-tech. Check if your card supports contactless payment and how user friendly their internet and mobile banking systems are. If your card is accessible in your home country, it would be an added advantage too.
Don’t keep applying
It is fine when your applications get rejected. You can take some time, build your credit score and reapply after a few months. Applying frequently despite rejections will actually diminish your chances of getting a card as your credibility as an applicant falls.
Compare and choose the best
Each card serves a different purpose. Some cards offer lucrative discounts on grocery bills, some are designed for travelers and some cards offer cashback on lifestyle purchases. Be sure of what you would be using the card mostly for and pick a card. There are many websites that compare credit cards from different banks. Make a wise choice to get the best out of the card.
Maintaining a healthy credit score right from your student days would be very helpful in the future in Australia. Getting a credit card, spending well from it and paying 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, by keeping the card active and through timely payments, you can get the limit raised automatically by the bank.If you are thinking of a card now, here are some of the popular student credit cards from the top banks in Australia
- 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