Low income credit cards
For low income earners, finding a credit card can feel like an uphill battle. However, you shouldn’t feel priced out, as there are a range of credit cards with income minimums as low as $15,000.
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What are low income credit cards?
Many Australian credit card providers have minimum income thresholds of $30,000 to $40,000 annually. Low income credit cards, as the name suggests, have lower minimum income levels within their eligibility criteria. They are usually between $15,000 to $20,000. This is around $288-$384 a week.
They typically won’t have all the bells and whistles of credit cards for higher income earners. But they may allow Australians with lower incomes, such as those employed part time or casually, to obtain a basic credit card.
Can I get a credit card with no income?
You’ll be hard-pressed to find a provider who’d give someone with no income a credit card. Minimum annual income requirements are put in place by credit card providers to ensure card holders can manage their repayments.
It may seem unfair, but it’s for your own benefit. Risk-based lending helps to prevent Australians from easily falling into debt.
How do I get approved for a low income credit card?
To improve your chance of approval for a low income credit card, consider the following:
Start a savings nest egg: Credit card providers may be looking for stability in your finances if you have a low income. If you can consistently put money into your savings each income cycle, you’ll show that you have an effective budget and that you have self-control.
Make regular debt payments: If you have existing debt, consider paying this off before applying for a low income credit card. This will demonstrate a level of reliability with your finances. It may improve your chances of getting credit card approval as well as increase your credit rating.
Check the minimum income requirements: Review a card's terms and conditions and/or PDS for a clear understanding of its minimum income requirements. This may differ for each credit card.
Joint application: If your partner is willing to go on the credit card application with you, you’ll be able to combine your income amounts. Not only will you have a greater chance of reaching low income credit card minimum requirements, you could also qualify for standard or rewards credit cards. Just ensure that you’ve prepared an effective budget before applying. You don’t want to fall into debt and negatively impact your partner’s credit history, or your relationship, in the process.
Review your credit history: It’s not uncommon for credit reports to contain mistakes. Obtain a copy of your credit history and go through it with a fine-tooth comb. If you’re applying for a credit card with a bad credit score, your application will have a higher chance of being rejected. You can also learn more about how you can repair your credit score.
What are the pros and cons of a low income credit card?
- Lower costs: As low income credit cards are typically no-frills cards, they can often come with lower than average fees or purchase rates.
- Build credit history: If you’re a casually employed young Australian, low income credit cards are one way to start building a credit history. A good credit history can help improve your likelihood of approval for personal loans or home loans in the future.
- Grow debt: All credit cards bring a risk that the holder will fall into debt. Ensure you’ve set up a repayment plan and budget before you take out a credit card, especially on a low income.
- Hurt your credit history: If you’re not careful and apply for a card with income requirements higher than your own, you may hurt your credit score. Being rejected for a credit card will negatively impact your credit history. Double check the fine print on a credit card before applying just in case.
What low income credit cards are available for students?
Students can be eligible for basic low income credit cards. If you’re a student, taking out a credit card is an opportunity to learn about budgeting and financial responsibility. But it’s also a quick and easy way to grow a hefty debt before you’ve even graduated if you’re not careful.
Try to present yourself as the most reliable borrower before applying – whether it’s through taking out a part-time job or growing some savings.
Students may also be eligible for government financial assistance through Centrelink, such as Youth Allowance. Before applying for a student credit card, consider whether government assistance might better suit your financial needs and situation.
Alex is a personal finance writer and PR professional at RateCity, and has been writing about finance for over three years. She is passionate about closing the gender pay and superannuation gap, and aims to help young Aussies to overcome their financial apathy and better manage their finances. Alex has been published in numerous print and online outlets, including Money Magazine, Lifehacker Australia, and Business Insider.
If you’re wondering about how to make a credit card online application, here are some steps to follow:
- Test the market. Many credit card options are available online. Compare providers by fees, interest and perks to ensure you’re getting the best deal.
- Complete the application. Once you’ve selected a card, head to the provider’s website and complete the online credit card application form. Forms vary by providers.
- Provide details. Most cards require you to meet age, residency, income and credit status condition, and you need to provide details like a bank account statement to prove this.
- Review details. Ensure the information you’ve entered is correct.
- Calculate your debt. Credit card calculators make it easy to determine the repayments required to chip away at your debt in the shortest timeframe possible for your budget.
- Repayment plans. Take some time to formulate a credit repayment plan. Consider increasing your income, scaling back your lifestyle or refinancing.
- Talk to your credit provider. If you’re still struggling with your debt, give your credit provider a call. You may be able to come to a new arrangement.
Yes, as credit card providers look at your annual income amount as well as your occupation. Minimum income requirements tend to be between $30,000 – $40,000 for standard and rewards credit cards, however low income credit cards can have minimum income requirements as low as $15,000 per year.
For most Australians, there are no great barriers to applying for and getting approved for a credit card. Here are some points that a lender will consider when assessing your credit card application.
Credit score: A bad credit score is not the be all and end all of your application, but it may stop you being approved for a higher credit limit. If your credit score is less than perfect, apply for the credit limit that you need, rather than the one you want.
Annual income: Most credit cards have minimum annual income requirements. Make sure you’re applying for a card where you meet the minimum.
Age & residency: You need to be at least 18 years old to apply for a credit card in Australia, and most require that you are an Australian citizen or permanent resident. However, there are some credit cards available to temporary residents.
You can apply for a credit card online, over the phone or in person at the bank. Once you’ve compared the current credit card offers, the application process is quick and easy. Before you get your application started, you’ll need to gather your personal information like proof of ID, payslips and bank statements, proof of employment and details of your income, assets and liabilities. To be eligible for a credit card, you’ll need to be an Australian citizen over 18 and earn a minimum of $15,000 each year. Once you’ve applied for a credit card, you should get a response fairly instantly. If your credit card application has been approved, you should receive a welcome pack with your new credit card within 10-15 days.
Think of credit cards as a short-term loan where you use the bank’s money to buy something up front and then pay for it later. Unlike a debit card which uses your own money to pay, a credit card essentially borrows the bank’s money to fund the purchase. When you apply for a credit card, the bank assesses your income and assigns you a credit limit based on what you can afford to pay back. At the end of each billing cycle, which is usually monthly, the bank will send you a statement showing the minimum amount you have to pay back, including any interest payable on the balance.
It is possible to get a credit card as a pensioner. There are some factors to keep in mind, including:
- Annual income. Look for credit cards with minimum annual income requirements you can meet.
- Annual fees. If high fees are a concern for you, opt for a card with a low or $0 annual fee.
- Interest rate. Make sure you won’t have any nasty surprises on your credit card bill. Compare cards with a low interest rates to minimise risk.
A credit card can be a useful financial tool, provided you understand the risks and can meet repayment obligations.
If you’re a credit card first-timer, review your options. Think about what kind of credit card would suit your lifestyle, and compare providers by fees, perks and repayments.
Once you’ve selected a card, it’s time to apply. Credit card applications can generally be completed in store, online or over the phone.
When you apply for a credit card for the first time, you must meet age, residency and income requirements. As proof, you must also provide documentation such as bank account statements.