Credit Card for 19yo $18,000+ Income

Wolfhound on 11/10/2022 - 01:25
Last edited 11/10/2022 - 12:53

Hey guys!

I am just curious if anyone has any recommendations for a credit card for a 19yo uni student. I am sure you guys will say that I am too young, however, I just want to build my credit score (I could be an additional cardholder on my parents card’s, but don’t want to bother them with that).

I have earnt $18,000+ in the past two years, this financial year should be on track for $50,000+, all after tax.

I have no debt. And I am curious if there are any cards for me out there that I can earn points on (Qantas/flybuys) and if possible, any travel insurance, but I have a feeling they are normally only offered on platinum cards, which probably require $35k+ income.

Another question, for the $35,000 income limits, do banks care if it is only 1 year, or does it have to be 2 consecutive years showing $35k+ tax returns.

Thanks if you can help!

edit:

  1. I’m only looking to spend what I can afford and pay it in full at the end of the month.
  2. Currently have not that many bills, and just spending day to day, which I can cut down on if I do have bills
  3. Looking to possibly get a house over the next few years. Trying to decide between a townhouse near monash uni ~$600kish or something further away with room to add value after renovations
Financial Credit Card

Comments

  • bazingaa on 11/10/2022 - 06:21
    +9

    I just want to build my credit score

    Isn't this a thing in USA not here ?

    • Mechz on 11/10/2022 - 06:33

      We have it, but our lenders are usually intelligent enough to not just rely solely on this fanciful number.

    • Donaldhump on 11/10/2022 - 09:19
      -5

      nope, my wife went to get a mobile phone at 35 or so and couldnt as she has no credit score… she been using mine for 10 years or so

      • Sleeqb7 on 11/10/2022 - 11:18
        +1

        Weird, because I got a mobile phone plan when in my 20s during my first year of having a job without ever having had a credit card.

      • Donaldhump on 11/10/2022 - 11:24
        -5

        love the down vote for telling facts.. why bother helping with advice
        downvoter should say why down vite

    • Wolfhound on 11/10/2022 - 12:35

      yeh i did sort of think more so america than australia. But I would’ve thought it made a littleee bit of difference here still? But thanks I’ll keep that in mind

  • Mechz on 11/10/2022 - 06:40
    +1

    Lenders have a lot of different criteria. If your income is consistent for many months it should be enough. Plenty of other factors are sometimes considered though like living costs, saving trends etc.

    It's usually easier to get a card from the place you have banked with for a while as they may flag you as pre-approved but they can't legally 'sell' you a CC without you asking. YMMV

    • Wolfhound on 11/10/2022 - 12:37

      ok thanks, i do bank with ING & NAB, so maybe will try apply for one later, judging by how everyone think its better off not getting a cc right now

      • Mechz on 11/10/2022 - 12:48
        +1

        If you're responsible with your spending I don't think there's much of an issue.

        Remember most of these commenters would have you driving a second hand Camry your whole life…

  • Quantumcat on 11/10/2022 - 06:50
    +8

    Building credit score isn't a thing here, having a credit card will only make it harder to get a loan not easier. Don't get one unless you actually need it (I can't see how you would, you don't have a home loan where you want to keep cash in it as long as possible, if you have an emergency you can rely on your parents or your savings since you don't have many expenses). To get rewards that are worth more than the annual fee you would need to be spending a lot, when you should be saving instead. Just concentrate on saving and passing your uni courses.

    • p1 ama on 11/10/2022 - 10:00

      if you have an emergency you can rely on your parents

      Why would you assume that this is the case?

      • Quantumcat on 11/10/2022 - 10:22

        They said that it was an option to be a cardholder on their parents' credit card. I don't think they would allow that if they also weren't willing to help them out in an emergency.
        And, if they live at home (seems like a safe assumption but might not be correct), there's not much in the way of life-altering emergencies that are possible. Eg they won't have to fix a hole in the wall before a real estate inspection, for a dental emergency they would be covered under their parents' health insurance still (if the parents do not have health insurance and they do get a dental emergency there's their own savings, or help from parents, as options before needing to take out a credit card), presumably they don't have their own pet that isn't their parents' pet that would need veterinary care, they don't have kids that might have their own emergency, they may not have a car yet that might suddenly need repairs, etc

        • p1 ama on 11/10/2022 - 22:18

          I don't think they would allow that if they also weren't willing to help them out in an emergency.

          But why would you assume they would be able to help out in an emergency?

          FWIW, "do X because you can always just rely on your parents" is a really bad mentality that leads to all sorts of horrible financial decisions. I think it sends the wrong message - 19 is the perfect age to learn to be independent and to learn that mum and dad aren't always going to be there to bail you out of trouble. OP seems to be doing the right thing - getting a great income, thinking about their financial future.

          • Quantumcat on 11/10/2022 - 23:02

            @p1 ama: 19 year olds aren't exactly the least impulsive age group. Unless they really need a credit card it is better to not have one, and have less temptation to do something stupid. There's plenty of time to grow up. Unless by learning to be independent you mean learn from the mistake ofbuying a motorcycle on a credit card, crashing it, and either having debt follow you around for ten years or having your parents bail you out. Or some other impulsive purchase that they can't or don't quite pay off and it follows them around for much longer than it would have taken to save for it. It's a great way to have regrets, not such a great way to learn anything.

            • p1 ama on 12/10/2022 - 22:10

              @Quantumcat: Why would you jump to the conclusion that OP will buy a motorcycle on a credit card, crash it and have debt following him/her around for the rest of their life?

              It just sounds like a very judgemental thing to say. FWIW, I'm glad you have the privilege of being able to mooch off your parents when you were 19, unfortunately not everyone has that option.

              Or some other impulsive purchase that they can't or don't quite pay off and it follows them around for much longer than it would have taken to save for it. It's a great way to have regrets, not such a great way to learn anything.

              OP is 19, not 12. They are old enough to work, old enough to smoke, old enough to drink, old enough to vote, old enough to drive, old enough to have a credit card (if they satisfy the financial requirements), and dare I say, old enough to make mistakes.

              We already have an age where one should have all the tools required to be self-sufficient - i.e. 18 and be trusted to make responsible decisions.

              • Quantumcat on 12/10/2022 - 22:13

                @p1 ama:

                Why would you jump to the conclusion that OP will buy a motorcycle on a credit card, crash it and have debt following him/her around for the rest of their life?

                I'm not assuming anything about this OP, but that is the kind of thing a 19 year old might do, which reduces with age. Why do you think car insurance is a lot more expensive for this age group, and they aren't allowed to have extra powerful bikes? Do you think the actuaries of the world have got it all wrong? It is a dumb idea to give yourself the opportunity to make a big mistake when it isn't going to be of much benefit to you at all. You sound like you are projecting your own insecurities onto the OP and getting defensive on their behalf.

                It just sounds like a very judgemental thing to say. FWIW, I'm glad you have the privilege of being able to mooch off your parents when you were 19, unfortunately not everyone has that option.

                I lived overseas without my family at age 16-17, was home for 6 months then moved out to go to university, working to pay for everything. No mooching involved I'm sorry to say.

    • Donaldhump on 11/10/2022 - 11:25
      +1

      you could argue paying off your c/c every month imrpoves your credit score.
      i have 7 credit cards totalling 50k+ and my credit score is 982

      will effect borrowing capacity but a 1k credit card is fine

    • Wolfhound on 11/10/2022 - 12:40
      +1

      You are right that I can depend on parents in emergencies, however, I haven’t had the need since I started working because I do have savings and a steady income. Thanks for the advice as well, maybe just not worth getting one right now. But I am looking to possibly buy a house in the next year or years. So wanted to ‘build my credit’

  • geekcohen on 11/10/2022 - 07:13
    +2

    I just want to build my credit score

    Why? Why so early? Are you looking at buying a house in the next 12 months?

    Its all well and good to build it up, but if you fail to make payments and have financial issues, then you are going to have a negative effect than a positive one.

    • Wolfhound on 11/10/2022 - 12:44

      I am looking to buy a house over the next few years, hopefully when the market isn’t as inflated lol.

      I am a reasonable spender and will almost never go over a cc limit or spend more than I can afford, I will have enough to cover my month-to-month spending, it was more so about getting that 1-2% back spend in the form of points as well as building a credit history. So to me I’ll treat a cc as a debit card, so imo it would’ve only been a positive effect

      • USER DC on 11/10/2022 - 12:59

        Generally speaking 1-2% back in CC points is generally difficult the CC points dont really give that much in return its more like 0.91 % i think for most basic cards (some higher end premium CC would have more point per $ value but require high income, and high annual fees).
        So HSBC Debit card is better in that cashback way.

        But you can get more out of CC points using it wisely e.g. spending at specific retailers, (generally speaking it may mean you spending more for that same item, and paying brand name tax). Like @Airbnb for Westpac CC, or @Coles for Coles CC, @kogan for kogan CC etc.

        HOWEVER CC SIGNUP BONUSES are a BIG DEAL- like $400 back on $3000 spend,

      • Quantumcat on 11/10/2022 - 13:33
        +2

        Don't spend money just to get points, you'll end up worse off, only buy things you would have bought anyway. You can be swayed on the retailer if one gives more points than another for a similar item if you aren't spending more than you would have otherwise. Try to stay aware of how these sorts of promotions are intended to manipulate you so you can outwit them (if you've figured out a way you can make an actual profit then go for it). But don't be tricked into spending more than you intended

  • Austaurean on 11/10/2022 - 07:47
    +4

    I would suggest dont get a credit card.. i paid mine out years ago closed the account and cut the card up.. have never looked back..

    if i dont have the money, well then i have to wait.

    A lot of people max out the card, get paid, then pay out the card, then max the card out until pay day. Never ending cycle, so why start..

    I now just use a debit card that uses my money over the visa network.

    • [Deactivated] on 11/10/2022 - 08:44
      +1

      the one main benefit of credit cards, in my opinion, is how easy it is to get your money back after a fraudulent purchase.

      banks are a lot more willing to go the extra mile when it is their money being stolen, when you have a debit card, it's like pulling teeth, if you can get it done at all, my bank (MyState) was not willing to investigate a fraudulent purchase at all, their response was essentially "tough luck" because it was my money, not theirs. it wasn't a huge amount, but it was my money.

      • Quantumcat on 11/10/2022 - 09:18
        -1

        That's a good point. However in this case it looks like OP is living with their parents or at least has the option to be a cardholder on their account. They can get the parents to buy things that they can't use PayPal for. They won't be buying a lot anyway so it shouldn't be too much of an inconvenience

        • [Deactivated] on 11/10/2022 - 09:19

          that's true, but it's always a pain to get someone to buy something for you, even if you are paying them back immediately (i used to do it..)

          • Quantumcat on 11/10/2022 - 09:20
            +1

            @[Deactivated]: That's true. OP could look for a fee-free low-limit card for those sorts of purchases

    • Wolfhound on 11/10/2022 - 12:47
      +1

      That makes sense, but I’m more so a saver than spender and I guess I don’t have that many bills to cover as of right now, so I probably won’t be maxing out or overspending when I can’t pay it back. But yeh thanks, obviously does sound scary that people fall into the rabbithole of cc debt :/

    • Donaldhump on 11/10/2022 - 12:54

      or use a credit card wisely, and get interest free days and keep money in ur offset or savings accounts till the very last day.
      smash sign up bonuses as well.

  • Boioioioi on 11/10/2022 - 08:26
    +2

    You don't need a credit card to improve your credit man. I have not held a credit card or taken a loan out for anything ever. Wanted to get pre-approval for a home loan and had no issues at the bank. Because I have had a steady income and can prove it, that is all they needed. Credit card actually reduces your borrowing power and increases your risk from the bank's perspective. (Generally, but not always)

    The whole get a credit card to improve your credit score thing has been perpetuated from how things work in America, not in Australia

    • Wolfhound on 11/10/2022 - 12:48

      I see, alright guess steady income and payslips is more important. Thanks

  • USER DC on 11/10/2022 - 09:20
    +1

    For CC most banks only really require income proof for like 1-3 months (given you aint casual). Some are even happy with like 1months of payslips. Depends on overall circumstances though.
    e.g. they wont credit to someone making $50,000 if they already got like $8000 worth of Credit line already open under them.

    Easiest to get Cards are probably Coles CC (lowest income requirement), and may be latitude too (from what i heard)

    • Wolfhound on 11/10/2022 - 12:50
      +1

      I see, will have a look at them thanks

      • fadeinthemix on 12/10/2022 - 16:55
        +1

        Why not just get the HSBC debit card for the 2% cashback instantly to start off with

        • Wolfhound on 13/10/2022 - 13:47
          +1

          will have a look at that thanks

  • Donaldhump on 11/10/2022 - 09:20
    -2

    my wife couldnt get a mobile phone at 35 as hadnt had a credit card in 10 years. so she had to get a small one to solve this issue

    just get a small one and oay the thing off and dont use it other than for a mars bar once a month

    • Quantumcat on 11/10/2022 - 09:22

      Really? I was allowed to sign a phone contract at age 20 as a uni student working casually and never had any credit before. I thought they'd hand them out to anybody as long as you didn't have a history of not paying bills. Maybe because at 20 that's expected but maybe unusual in a 35 year old

    • bazingaa on 11/10/2022 - 09:25

      couldnt get a mobile phone

      which network ? I also don't have a credit file

      • Donaldhump on 11/10/2022 - 09:55

        think was optus phone plan, but cant remember tbh

    • Wolfhound on 11/10/2022 - 12:49

      interesting, thought anyone could open phone plans lol. But ok will keep that in mind

  • MITM on 11/10/2022 - 13:44
    +1

    You mention travel insurance - so guessing you want to travel. You'll need a credit card if you ever want to hire a car as they will want to pre-authorise an accident excess. A debit card wont work for this. A credit card approval on your credit file will be seen as a better credit risk than no approvals. The (home loan) lender will say "we're the first to take the risk" - no thanks, loan application declined.

    • illogicalerror on 11/10/2022 - 18:10
      +1

      That's right.
      If your potential CC limit repayment exceeds what the lender thinks their repayment and your living expenses total they may ask you to reduce your CC limit, but a CC is definitely borrowing history and plays in your favour in the future.

    • Wolfhound on 13/10/2022 - 13:49

      yeh i am travelling in february, have a credit card with complimentary travel insurance would be helpful instead of paying for one, but it isnt an essential thing as i dont travel that much. but hmm good points with reducing my credit risk, will have a think about that thanks

  • lightfoot on 12/10/2022 - 16:28
    +2

    Mate out of curiosity, what do you do for a living to be able to jump from 18 to 50k in two years?

    • Quantumcat on 12/10/2022 - 22:26

      My guess, based on nothing, was OP was working casually or part time the previous year while studying, then was offered a promotion which required full time hours, and they decided to take a gap year of sorts to build up good savings before going back to uni after, so they won't have to work at all in their last two years and can concentrate on getting good marks (or have more time for a social life) without being distracted with work shifts.

      How close am I @Wolfhound?

      • Wolfhound on 13/10/2022 - 14:03

        Last year was Year 12 for me, and was able to work casually/part time over 3-4 retail/fast food jobs.

        Since the start of this year, I’ve started Uni and I’ve more so gotten into the Tutoring industry (work for a company part-time & private tutoring) and also Food Delivery (Doordash), I’m able to work up to 35-40 hours a week total, obviously will decrease sometimes if I need time to do Uni (flexibility of food delivery) and work more during holidays. I have some other side hustles that can net between $200 to $400 a week for around 5-8 hours of work, depending on the week.

        On average, I am earning $35 an hour after fuel & depreciation/maintenance . Only reason last financial year was only $18k was due to the higher depreciation of a car in its first year (due to reducing balance depreciation) and only really working 30 hours a week starting from January this year.

        So right now I am balancing Uni and working basically full time at this point, obviously the flexibility is good for me and allows me to give more time to Uni some weeks if needed. I am also able to fit in a social life, I just like to keep myself busy lol

        I am investing most of my money now, and hoping to move out at least by my last year of uni (2025), so unfortunately you’re not that close haha, I was thinking of a Gap year, but decided against it because my group of friends were all going Uni together

        • Quantumcat on 13/10/2022 - 14:08

          Ah darn 😛
          Best of luck!! Good idea with working in a way that you get to choose when and how much. Then when exams are coming up you can just not work for a few weeks and not worry about a boss firing you or anything.

          • Wolfhound on 13/10/2022 - 14:13

            @Quantumcat: thanks lol. yeh flexibility and not having a boss breathing down my neck is what i prefer especially when i also have studying to fit into my schedule.

            i guess the other thing im genuinely curious about is whether WAM in uni matters in real life, for actuary/finance jobs if anyone could answer that, that’ll be great lol

  • Chivalry on 19/10/2022 - 17:51
    +1

    @Wolfhound

    I really enjoyed reading through this post and seeing your aspirations and thoughts process, please seek independent financial advice or a broker to help you plan the best borrowing outcome.

    Australian Lenders will perform a credit check, but it isn't as important as the States to "build" your credit score. You can start up a credit file these days without actually getting credit if you sign up to one of those free creditscore checking sites (getcreditscore.com.au for Equifax, creditsavvy.com.au for experian, or illion - in order of popularity with the banks - the bigger ones may use multiple bureaus).

    From a credit risk perspective, what they'll want to check is the lack of adverse information - i.e. bankruptcies, court judgements, defaults, arrears etc, so don't get those if you intent on getting a mortgage. As others have said, having a credit card will lower your borrowing capacity - but you can always cancel that before starting to look for a mortgage. With the big 4 and many other smaller banks using CCR data, having a credit card which you always repay will increase your positive score and show financial responsibility - but its not really necessary and probably doesn't add too much weight on if an organization will lend to you as adverse data and serviceability will be the main criteria on whether an organization will lend to you.

    All that said, it won't hurt to get yourself a card if you're keen on accuring some points for the spends you're going to be doing anyway and paying it off by due date. you can use a site such as finder.com.au to help you find cards. Welcome/signup bonus points will be the best value so look for those, travel insurance can be had for 70-100 bucks so probably not that important (i did most of my travel without ever getting those), and if you're planning to treat it more like a debit card, interest rate won't matter.

    • Wolfhound on 21/10/2022 - 14:00

      Ok, will take note of that. Get one and pay it off fully, and yeh imo interest wont matter as I am not going to buy anything I can’t pay off immediately, I’ll then maybe cancel it before mortgage so I increase my borrowing capacity. Thanks.

      I also do have a credit score, it says on Finder that it is 840 (up from 811 last year), most likely because I have a latitude account that I haven’t used yet. Not sure how trustworthy the one on Finder is though.

      And I had a look on Finder for credit cards, unfortunately I don’t qualify for most of the platinum/points one because I need to have a higher income, because they don’t count self employed income unless ABN is active for more than 2 years.

      • Chivalry on 25/10/2022 - 11:13

        finder uses Experian, so its pretty good. and 840/1000 is really high - so you generally wouldn't have any credit risk issues - so it will all come down to affordability.

        but yeah if you can't get points for a credit card or some sort of reward that is decent, its not really worth getting one. When you apply for a credit card, that score will drop abit.

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