Credit cards for temporary residents

If you are living in Australia for a lengthy period, such as if you’re working or enjoying an extended holiday, a credit card could help you pay for expenses or build credit.

International credit cards are also accepted in Australia, but a credit card from a local bank or other credit company could help you save money in international fees and help you establish your Australian credit history.

The credit cards available to temporary residents vary from one bank to another and depend on the type of visa. For example, your chances of getting approved for a credit card increases if you hold a 457 (temporary work) visa, while those staying in Australia on a 417 (working holiday) or 462 (work and holiday) visa may have a different chance of approval.

Every credit card issuer may have different eligibility criteria for temporary residents in Australia. What’s typically required may include: 

• You must be 18 years or older.
• You should earn regular taxable income in Australia; some banks may have a minimum income requirement and minimum bank account balance.
• You must hold a valid visa; some issuers may specify how much longer your visa must be valid to approve your temporary resident credit card application.
• You should have an Australian residential address and a bank account.
• You must be employed in the country or must provide proof of upcoming employment while applying for a credit card.

If you are in Australia for a holiday or on a student or spouse visa, you may find it challenging to apply for a credit card. You have limitations on employment while residing on these visas, which means you may not be able to pay for your credit card spending.

If you don't have a permanent link to the country, credit card issuers may see you as higher risk, as you may leave before paying off a credit card balance. So, before you apply for a credit card, keep the following in mind: 

• You may need to provide reference checks of Australian residents who can validate the information submitted on your application.
• Your financial history, including utility bill payments and bank statements will be reviewed.
• You may be given lower credit limits, which may be later increased if you use your card responsibly and pay off your balance in full each statement period.

Card issuers will consider only your Australian credit history. So, if you have a high credit score abroad, it will not affect your credit card application as a temporary resident of Australia.

As a temporary resident, you may not have a long credit history in the country. Opening and maintaining some credit-based accounts in Australia could help to build your history. Some of the easier credit-based account options include setting up utility accounts like an internet connection, electricity, and phone plans.

Having an Australian bank account is also important. You could submit your bank account statements to the card issuer to show that you are managing your finances in a responsible manner, which may increase your chances of approval.

There are a few key factors to consider when searching for the best credit card option for you as a temporary resident, such as:

1. Interest rates: Credit card companies charge interest for purchases, balance transfers, and cash advances. The higher the interest rate, the greater your chances of snowballing debt if you cannot pay your balance in full each statement period. Also, keep an eye out for promotional or introductory rates, also known as “honeymoon” rates, that can be as low as zero per cent, but then revert to a higher rate after a set period.
2. Fees: Always review any potential credit card fees, like annual charges, fees for international purchases, cash advance fees, or foreign transaction fees, before applying. If you can avoid paying interest on your balance, your credit card fees may be some of the highest ongoing costs associated with a credit card.
3. Interest-free periods: Interest-free periods are the number of days you have to pay for your purchases before interest is charged. The longer the period, the more time you have to make repayments without being charged.
4. Rewards programs and extras: Rewards programs and extras may earn you points on your spending and may be redeemed for goods, cashback offers, or converted to frequent flyer points. Check these extras before applying for a credit card.

A temporary resident credit card could help you to build your Australian credit score, which could be beneficial when you seek permanent residency. Choosing the best card for your financial needs, budget and purpose is important, so don’t skip comparing different cards to find one that suits you while living in Australia.