Credit cards are a convenient way to pay bills and shop online. But when it comes to applying for a credit card, it can be hard to know where to start. We look at what's involved so you can navigate the credit card application process with ease.
What steps are involved in applying for a credit card?
- Choose the right card
- Choose the right credit limit
- Get assessed by your chosen bank
1. Choose the right card
The first step is finding a card that is right for you. There are so many different credit cards available, each with unique features which may include insurance, rewards programs or special rates. It's important to compare features and rates to find the card that best suits your needs and income.
2. Choose a credit limit
It may be a good idea to decide on your ideal credit limit before you apply. The credit card provider will tell you what credit limit is available to you, but some people might find choosing a lower amount helps them better control their spending.
3. Get assessed by your chosen bank
The actual application process can be super-quick. You can typically apply online and get an answer about your eligibility within minutes. While the requirements vary according to the provider, most require: · That you're at least 18 years old. · That you have permanent residency in Australia or the right to work in Australia. · That you're not an undischarged bankrupt. It's important to remember that applications for credit cards can affect your credit card rating.
What information will you need to provide?
The level of detail you need to provide will depend on whether you are already a customer of the bank or provider you are applying to, but here is a general guide.
- Identification and personal details
- Proof of identity
- Employment details , income and expenses
1. Identification and personal details
You'll need to provide your personal details, such as title, name and date of birth, and your address. The provider may also need to know your marital status and whether you have any dependent children.
2. Proof of identity
Multiple forms of proof of identity may be required when applying for a credit card. This may include:
- · A current Australian driver's licence or learner's permit.
- An Australian or international passport.
- A birth certificate or Australian citizen certificate.
- A current Centrelink card. Secondary forms of identification that may be required include:
- A recent utility bill or council rates notice.
- A Notice of Assessment from the Australian Taxation Office (ATO).
3. Employment details, income and expenses
The bank will need the name and address details of your current employer, and you'll need to demonstrate your capacity to pay your credit card bills through proof of income. You might be able to do this by providing:
- A current copy of your employment contract.
- Copies of multiple recent pay slips showing your year-to-date earnings.
If you are self-employed you will need to provide at least two Notices of Assessment from the ATO. You may also need to provide proof of any other income you have. This could include:
- Rental income.
- Child support.
- A pension.
- A managed or self-managed superannuation fund.
Most application forms will require you to outline your monthly expenses, including what you pay towards rent or a mortgage, and any other living expenses. Bear in mind that if you're planning on refinancing debt by transferring across the balance of a current credit card from another institution, you'll need to provide bank statements.
Use the InfoChoice credit card comparison table to choose a card that best suits your needs, and get a full run-down of the fees and charges on its comprehensive information page.