How To Get A Credit Card In Australia

A credit card can improve your credit rating, earn rewards, and offer you convenience, protection and a sense of financial flexibility — but only when used strategically. Before you get a credit card, make sure you’re ready for the responsibility of revolving credit.

1. Decide if you should get a credit card

Should you get a credit card? Are credit cards worth it? Everyone’s answer is different, and reflecting on whether a credit card is right for you is the most challenging and critical part of the process.

Before applying for your first credit card, consider your financial behaviours. What’s your relationship with money? Do you find it hard to manage your finances? Is spending money a coping mechanism?

Be honest and don’t take on much more than you can handle — even if a bank authorises a generous credit limit. Available credit isn’t the same as money in the bank. A smart financial rule to follow: only use a credit card for purchases you can afford to pay off immediately.

Credit cards aren’t innately ‘good’ or ‘bad’. How you use your first credit card will matter the most, so take the time to carefully consider the benefits and risks.

Benefits of a credit card

Builds your credit history and rating when used responsibly.
Better insurance and protections compared to a debit card.
Access to money — even cash — when you need it, which is especially helpful in the case of an emergency.
Offers the ability to make purchases within an interest-free period.
Some cards will reward your everyday purchases with cash back or points.
Often comes with perks, like complimentary travel insurance on future trips and frequent flyer program benefits.

Risks of using a credit card

Credit card fees can add up.
You’ll incur interest if you don’t pay off your balance by the due date.
You could accrue debt that you’re unable to repay.
Poor credit card management will affect your credit rating and hinder your ability to access other loans or buy a house.

» MORE: What is credit and why do you need it?

2. Check eligibility requirements

Eligibility requirements for securing a credit card are standard across most banks. While the documents a bank requests might differ slightly from lender to lender, the eligibility checklist is the same.

You need to be:

18 years or older
Receiving a regular income
An Australian resident for tax purposes
An Australian or New Zealand citizen or permanent resident.

Additionally, you’ll want to see if the bank has any additional requirements — ANZ, for example, asks for expenses, liabilities and assets.

Finally, check your credit report and rating, which banks will consider when deciding whether to approve your application.

3. Choose the right credit card

There are many types of credit cards, but the best for you is one with features designed to meet your specific needs.

For students and other beginners seeking their first credit card, that likely means one focused on helping build your credit history. Usually, these cards feature small credit limits and few perks.

If you want to save on interest and have had a credit card before, consider a low-interest credit card or one with a balance transfer option. Zero-interest periods can be a helpful choice if you plan to use your credit card in case of emergencies, have irregular income or occasionally carry a balance.

If you have a good credit rating and plan to repay your balance in full every month and never incur interest, a rewards credit card may be a good match. These cards have higher interest rates but offer rewards on every dollar you spend, like travel points or cash back.

Just make sure you don’t apply for more than one credit card at a time, even if you only plan to pick your favourite because your credit rating is affected every time you apply for a credit product.

4. Apply when you’re ready

Before applying, check the necessary documents, such as your ID, Medicare card, recent payslips and bank statements. Once everything is together, fill out the application.

The fastest way to apply for a credit card is usually online. In some cases, you’ll get an instant response.

5. Activate your new card

Once approved, your new card should arrive in the mail within a few business days with a letter that includes steps on how to activate your credit card. There will always be options for you, but the easiest way to action anything is through online banking.

Take this opportunity to familiarise yourself with the online banking interface, and call your bank if you have questions. They can bring you up to speed with navigating your online banking, as each bank has its own user experience. While you’re at it, ask them about the best ways to use the specific features of the card so you maximise its benefits.

Once your card is activated, you can use it immediately (in-person and online). If you do, call your bank and talk to a representative about safety tips for new cardholders.

» MORE: What do credit card numbers mean?

6. Start using your credit card responsibly

Your first credit card should introduce you to the world of credit limits, interest rates and interest-free periods while allowing you to practice managing small debt. Spend the first year or two learning to use it wisely while building your credit score.

Check every transaction, review your monthly statements and set reminders for your repayment dates. Try only to make purchases you can comfortably pay off immediately. Establish healthy credit habits and prove to yourself (and future lenders) that you’re a responsible consumer.

It can be helpful to set some boundaries on when, why and how you’ll use the credit card. For example, if you have a $2,000 limit, you won’t go over $1,000, or if you love to buy clothes, you can only use your debit card for purchases to avoid temptations.

Be conscious of ‘I can always pay it back’ thinking. Remember, banks are for-profit entities. Maintain your power and awareness because they won’t do that for you.

Talk to your family and friends about their credit card strategy. Create an environment where people share openly what’s worked for them and what to avoid. Your first credit card can be a wonderful learning experience that sets you up for a life of financial success.

Credit card approval time varies from minutes to a few days, depending on the bank. Getting your first credit card will probably take longer than it would for an existing, long-term customer. Once approved, your new credit card shouldn’t take long to arrive — it’ll typically come in the mail within a few business days.

You must be at least 18 years old to get a credit card in Australia.

Yes, but you’ll have fewer options. If you have poor credit, consider a no-frills card with a low limit and focus on improving your credit rating.

» MORE: How to get a credit card with bad credit