Student Credit Cards

Here are some of the features to look out for if you are a student applying for your first credit card in New Zealand.

Low Income Requirement

Many credit cards have a minimum income requirement that must be met if the applicant is to be approved. This minimum income requirement is the minimum amount you can earn in a year to be eligible for the card. The lowest minimum income requirement is usually $15,000 to $20,000, so unless you bring in this amount each year, a credit card may not be an option.

Before applying, check the minimum income requirement on the card you are interested in. You may want to contact the card provider for more information on where this income can come from. Some providers may allow for income from other sources than just a paycheck.

Low Credit Limit

When assessing each application, card providers will take into account certain factors – such as the applicant’s income – to determine what their credit limit will be. In a card provider’s eyes, lower income earners cannot afford to spend as much as higher income earners, and have less available cash to back them up if they get into trouble by overspending.

To reduce the risk of cardholders overspending, card providers often set a lower credit limit on low income earners. If you are new to credit cards, this lower limit can be a good thing. It can be all too easy to overspend when you’re new to credit, and this low credit limit can prevent you from getting into too much trouble.

Low Annual Fee

Most students don’t have money to throw around, which is why it can be a good idea to look for a credit card with a low annual fee, or no annual fee at all. There are plenty of low and no annual fee cards out there, which help cardholders to save on their outgoing expenses. By paying no annual fee, or even a smaller than average annual fee, you can put your money to better use, buying textbooks or two minute noodles.

Low Rate

Finding a card with a low rate may be more important than finding one with no annual fee, especially if you are new to credit. If you ever carry a balance on your credit card, it will attract interest at the card’s standard rate. As you get used to dealing with credit cards, you may find you carry a balance now and then.

While it’s best to clear your balance each statement period, if you don’t quite manage that, it’s better to pay interest at a lower rate than a higher rate. Comparing the options, you may find that cards with no annual fees have higher interest rates, while those with lower interest rates have higher annual fees. Think about which will offer you the most in savings before choosing between the two.

No Frills Features

Most low income, low cost cards offer only the basics. While these cards may offer handy payment features, such as contactless payments and Apple Pay, as well as security features that help to prevent and reduce liability for fraud, it’s unlikely they will offer much else.

Fancy features don’t come for free. Cards that provide these extras typically have a higher annual fee. The same applies for rewards. While you may find rewards cards with a low or no annual fee, you may not meet eligibility requirements. That being said, it can be easier to get used to dealing with credit if your card is on the simple side. Complex features are easy to get bogged down in.

Special Offers For Students

While there may not be any ‘Student’ branded credit cards in New Zealand, that’s not to say students are left completely out in the cold. Some card providers have special offers specifically for students, as long as they meet the eligibility requirements for the card.

As a full time student, you may enjoy no annual fee for the first year when you apply for certain cards from ANZ, ASB, Kiwibank and Westpac. Check the small print for more details, and if you are unsure, contact the provider to ask for further clarification.

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