We’ve put together a bit of advice on how to go about getting your first credit card in Australia so to find out more read on or contact our dedicated 24/7 helpline to speak to our finance experts.
The best advice we can give you is to speak to a specialist, accountant, bank or credit lender prior to signing any agreement.
Credit cards have become part of our everyday life (the number one form of payment, in fact!) but it’s really important to take the time to do a bit of homework and make sure you’re picking the best provider for your needs.
You must also make sure that you’re not overextending yourself – for example, that you can meet the monthly repayments.
Any slow payments will cause instant default notices so that’s something to avoid at all costs. This could mean a lifelong black spot on your credit records so only apply for a card with a limit that you can afford.
how do I go about getting a credit card?
It’s not as easy as you’d think to get your first credit card but there are ways that you can be prepared, including seeking help from people who know their stuff.
The first step is credibility, which means showing lenders your history of financial responsibility. This is because by law every credit card facilitator must ensure that you can afford to repay a credit card balance before they approve you for one.
If you’re having difficulty demonstrating your credibility you can also get in contact with our dedicated 24/7 helpline and our experts will let you know what else you can do.
You need to be employed at the time you apply for a credit card, whether that’s part-time or full-time, with proof of how long you’ve worked with your employer. The longer the better and an employment history is also a good way to boost the strength of your application.
If you’re not employed you’ll need someone who has a positive credit rating and can therefore cosign your agreement.
However, this can be risky so while it’s a good start you should plan to gain an independent line of credit as soon as you can, once you can demonstrate a solid and positive history.
Demonstrating your credibility can occasionally be a little difficult (especially if you’re under 21) so if you’re struggling get in contact with our experts and they’ll help you figure out what you need to do.
who can provide a credit card?
Basically, you’ve got four methods of being approved for a credit card: education facilitators, banks, retailers and secured credit cards.
If you’re a student then you may have a very good chance of being approved for a student credit card.
Most major card issuers offer them but something to keep in mind is that they often charge a higher interest rate because of the greater risk.
Again, seek help to figure out what’s best for you.
Ideally, it’s best if you’ve got a history with a bank, in which case you’ve got two options for applying for a credit card:
- Face-to-face, which is preferable
- Online (as long as you have a solid banking history)
Check out our Australian banks page for more information on the national and state-based banks that are located Down Under.
Most major retailers offer a credit line for their products and in a lot of cases this is an ideal way to start building your credit history, which you can then use to apply for a major credit card within a few months. Also, retail and department stores typically have an easier approval process.
These cards generally incur a higher interest but if you pay on time then some will allow no additional service charges so they’re well worth a look.
You’ve just got to be very careful to find the best rate and make your repayments on time to avoid these interest fees.
secured credit cards
If it’s difficult for you because you have no credit history then another option is the secured credit card.
You make a deposit against the credit limit of the account and your bank holds this deposit in the event that you don’t make your agreed payments.
Most credit card issuers will convert your secured credit card to a unsecured one as long as you make your monthly payments on time for about year.
Don’t worry, having a secured credit won’t reduce your chances at getting other credit cards because the nature of the card isn’t recorded.
thinking australia? we can help!
Asking someone for help so you can figure out the best option for you in Australia is key. An independent voice such as an accountant or advisor is a good start to making sure you’re on the right track and doing what’s best for you.
Even though parents and other relatives can often give sound advice not everyone will understand all of the implications so it’s best to seek professional help, such as our Australian experts through our dedicated 24/7 helpline.