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Everything You Need To Know About Low Income Credit Cards
Smart Money

Everything You Need To Know About Low Income Credit Cards

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So, you’re thinking about applying for a credit card, but you’re not sure if you earn enough to be approved. What do you need to know before you apply?

In this post, we’ll delve deep into low income credit cards to cover everything you need to know, including what sources of income card providers will accept, other eligibility criteria that will come into play, and what you can expect from your card. Want to earn rewards? We’ll also take a close look at what kind of rewards you can expect to earn on your low income credit card.

What is a Low Income Card?

When you apply for a credit card, you need to meet certain eligibility criteria set out by the card provider in order to be approved. Why is that? A credit card is a lending product. When you use it, you are essentially taking out a loan from your card provider. Obviously, the card provider wants to know you have the financial capability to repay that ‘loan’.

It does this by making sure you meet certain standards, as set out in the card’s eligibility criteria. While each card’s criteria may vary slightly, most centre around the four following factors:

  • Credit History: Before you apply, your card provider will want to know that you are responsible with credit. By checking your credit history, the provider can determine how likely it will be you will make your repayments on time and repay your debt. With good credit, you are more likely to be approved. With bad credit, the provider may think you are too much of a risk to lend to.
  • Residency Status: Card providers want to know that you won’t run up a huge debt on your credit card and then leave the country without paying it back. That is why many card providers only accept applications from Australian citizens and permanent residents – although some may allow certain temporary visa holders to apply.
  • Income: Card providers need to know that you will have the funds available to repay your card purchases. Which is why they check your income during the application process. Taking into account your income and your outgoings, the card provider will determine whether you can afford to take on more credit – or whether doing so will result in financial stress.
  • Employment: For most applicants, their main source of income will come from their employment. While providers may accept other sources of income, they need to know that wherever you source your income, it will be steady and reliable. In terms of employment, that may mean being in a steady job for a certain number of years.

Okay, let’s circle back to income now. As you may have noticed when comparing credit cards, they come in all shapes and sizes. While some are as basic as it gets, others are packed with fancy features and rewards. On the basic end of the scale, credit limits tend to be lower, while higher end cards with more on offer typically have higher credit limits.

Obviously, card providers aren’t going to provide high credit limits to cardholders who can’t pay that spending back. Which is why these types of cards tend to set higher income requirements on application.

So, it goes without saying that there are also cards that have lower income requirements. They are the low income credit cards we are going to discuss in this post.

Q. What is a low income credit card?
A. A low income credit card is a card that sets a low income requirement on application. These cards can work well for people who want a credit card, but who don’t earn enough to apply for higher end cards with higher income requirements.

All rates, fees and offers correct at the time of publication as of 20th September 2021

Time to check out some examples of low income credit cards.

  • The Bankwest Breeze Mastercard is a fairly basic card with a low standard annual fee and a low ongoing purchase rate. It’s currently offering no annual fee in the first year, plus 0% p.a. on purchases and balance transfers for 15 months. It has an income requirement of $15,000 p.a.
  • The Newcastle Permanent Value+ Credit Card is another basic option, featuring a relatively low purchase rate and annual fee. It has an income requirement of $20,000 p.a.
  • The Humm90 Mastercard focuses on providing longer interest free terms on everyday purchases and purchases with partner retailers. It has an income requirement of $25,000 p.a.
  • Within the Coles range of credit cards, the Coles Low Rate Mastercard, Coles No Annual Fee Mastercard, and the Coles Rewards Mastercard each have a minimum income requirement of $25,000 p.a. These cards are primarily Flybuys rewards earners.
  • The ME Bank Frank Card sells itself on its no frills nature. As such, it has no annual fee and a relatively low purchase rate, with a minimum income requirement of $25,000 p.a.
  • The Virgin Money No Annual Fee Credit Card focuses on offering no annual fee for life. It is currently offering 0% p.a. on balance transfers for 12 months. It has an income requirement of $25,000 p.a.
  • The BOQ Low Rate Visa Card offers a relatively low ongoing purchase rate and annual fee, with 0% p.a. on purchases and balance transfers for six months. The BOQ Blue Visa Card has a relatively low annual fee and earns points within BOQ’s rewards program. Both have an income requirement of $25,000 p.a.
  • The Suncorp Clear Options Standard Card has a relatively low purchase rate and annual fee. It has an income requirement of $25,000 p.a.

 
How do those income requirements compare within the market? While most ‘standard’ credit cards set income requirements between $30,000 and $40,000 p.a., higher end cards may require applicants to bring in $75,000 or more each year.

As an example, the super premium American Express Platinum Card offers an extensive range of features alongside its high points earning potential. However, it also comes with an annual fee of $1,450 and an income requirement set at $100,000 p.a.

Q. What if there’s no minimum income stated?
A. If you’ve been checking out application requirements as you compare credit cards, you may have noticed that some cards don’t specify a minimum income within their eligibility criteria. So then, how do you know if you’re eligible to apply?

While some cards list a specific income requirement, doing so is not a legal requirement. With cards that don’t specify a minimum income, you may have to rely on other factors to give you an indication of whether or not you are eligible.

For example, you will usually find cards with higher minimum credit limits require applicants to have a higher minimum income. You may also find that higher end cards in general, tend to require a higher income from approved applicants.

If you’re unsure what the income requirement is on a particular card, you could contact the provider to ask for a rough idea of what is expected of you in terms of income.

It’s also worth bearing in mind that if a card doesn’t set a minimum income requirement, it may mean the provider places a heavier weighting on other aspects of its eligibility criteria, such as your assets and savings, existing debts and liabilities, and of course, your credit history.

What Counts Towards that Minimum Income?

Now we know more about what a minimum income requirement is and why card providers consider it important, let’s look at what may be accepted by providers as a suitable source of income. Bear in mind this list should be used as a general guide only. Each card provider has different criteria for acceptable sources of income.

  • Income from Employment. For most applicants, the bulk of their personal income will come from their paycheque. Depending on the card provider, you may be expected to provide details of your pre-tax pay or your take-home pay. Be sure to detail any bonuses or overtime payments you receive, and be ready to back it all up with at least three months of pay slips.
  • TIP: Self-employed? Read our post on how to apply for a credit card when you’re self-employed to find out what will be expected of you as a self-employed applicant, so you can improve your chances of being approved.

  • Investment Dividends. If you earn income from investments such as shares, you should detail this in your application. Proof of this type of income will usually come from a recent tax return, or through current statements or notices.
  • Rental Income. Own an investment property? In your application, detail any income you receive from renting out property you own. To provide proof of this income, you may be required to hand over three months of your bank statements showing rental income credits within your account, or a signed and current rental tenancy agreement.
  • Retirement Income. If you are receiving retirement income, be prepared to hand over evidence of either your most recent SMSF member benefit statement and a letter from your financial planner or accountant if you have a Self Managed Superannuation Fund (SMSF), or three months of bank statements if you receive income from a retail or industry superannuation fund.

  • Maintenance Payments. Child Support and other similar family maintenance payments may be counted towards your overall income. To provide proof of the payments you receive, you may need to provide the Maintenance Agreement or Child Support Assessment Notice detailing the payment amount and frequency. Your bank statement may also be accepted as evidence.
  • Government Payments. Depending on the card in question, you may be able to include government payments as a source of income during your application. This may include Centrelink benefits or service pensions. Evidence may be offered in the form of bank statements or a letter from the government agency outlining the payments you receive.

    As an example, Bendigo Bank accepts the following as acceptable sources of regular income from its credit card applicants:

    • Austudy
    • Family tax benefit A and B
    • Aged, disability or veterans affairs pension
    • Age pension
    • Carer pension (where received for dependent child/children)

Who Do These Cards Work Best For?

While anyone with a low income may apply for a low income credit card, these cards can work well for particular types of applicants.

  • Students: Those who study part time or full time may not have the capacity to work full time hours, or work in a job with a high take-home salary. As such, low income credit cards can work well for students, especially if the card provider is willing to take into consideration alternative sources of income such as Austudy.
  • Part Time or Casual Workers: Those who work part time or casual hours tend to have a lower income than those working full time hours – although this does depend on the type of job being carried out. It’s worth bearing in mind that while low income credit cards can provide access to credit to part time and casual workers, these applicants will need to prove their income is steady and regular in order to be approved.
  • Self-Employed Workers: Workers who are self-employed experience income highs and lows that salaried workers generally don’t have to worry about. As a result, a low income credit card may be easier to get approved for, although it really depends on the card in question – and the stability of the self-employed worker’s record of income.
  • Retirees: After giving up their regular paycheck, retirees typically rely on their super and other sources of income to get by. By choosing a card with a lower income requirement, retirees can still benefit from access to credit – as long as they meet the card provider’s criteria regarding income amount and acceptable sources of income.
  • Centrelink Applicants: Those who receive income in the form of government benefits such as Centrelink payments can still get approved for a credit card. Their chances of getting approved may be improved by choosing a low income card, and making sure they have a good credit history.

What Do You Need to Apply for a Low Income Card?

Let’s get down to the details. What do you need to apply for a low income credit card? In terms of eligibility, we have discussed that already. In short:

  • You must be 18 or over.
  • You must be an Australian citizen or resident.
    • Some providers state that cardholders must maintain a residential address in Australia to be approved.
    • Some cards allow applications from specified temporary visa holders.
  • You must have good credit.
  • You must not be currently bankrupt or insolvent.
  • You must have a steady income from accepted sources.

 
As you complete your application, you will be asked to provide details of your personal, financial and employment circumstances. You will need to detail your income, your outgoings, your assets and your liabilities. You will then need to provide the card provider with identity documents and paperwork to back up the information given within your application.

Before you apply, you may want to look out your driver’s license or passport, recent payslips and bank statements, and any evidence of alternate sources of income you rely on. It can be a good idea to work out a budget beforehand as well, as this should allow you to provide more accurate detail on your income and outgoings when you apply.

Q. Can you get approved for a low income card with bad credit?
A. If you have bad credit, you will find it hard to get approved for any type of credit card, regardless of whether it has a low minimum income requirement. Most card providers place a heavy weighing on credit score when determining whether or not to approve an application, so you may be better off taking a step back to improve your credit before you apply.

Types of Low Income Cards

As you can see from the range available on CreditCard.com.au, there are many different types of credit card to be found within the dozens of cards currently on the market. So, what can you expect from a low income credit card?

At the top of this post, we created a list of credit cards with the lowest income requirements currently available. With stated income requirements ranging from $15,000 to $25,000, these cards tend towards the basic, providing cardholders access to credit, alongside standard features such as digital wallet compatibility.

But, while fancy features prove elusive, there are other benefits to choosing a low income card within this list.

  • Low Annual Fees: If you want to save on annual fees, you can find a range of low income credit cards that charge low annual fees, or no annual fees at all.
  • Low Purchase Rates: If you tend to carry a balance, you can save on interest by choosing a low income card with a low standard purchase rate.
  • Introductory Offers: While low income cards tend to be basic in nature, some create appeal with enticing intro offers. With the right offer, you could save big on interest with a purchase or balance transfer offer, or save on annual fees with a no annual fee offer.

Can You Earn Rewards?

What about rewards? Can you earn rewards on a card with a low minimum income requirement? Within that previous list, there were two card options that not only had a low income requirement, but also offered cardholders the opportunity to earn rewards.

  • Paying no annual fee, you could earn 1 Flybuys point for every $2 you spend on the Coles No Annual Fee Mastercard, with a low income requirement of $25,000 p.a. Within this straightforward program, you can redeem 2,000 for $10 off your Coles supermarket shop. The card is also currently offering new cardholders $100 off their shop after a $1,500 spend.
  • Also featuring a low income requirement of $25,000, the Coles Rewards Mastercard provides a higher earn rate of 2 Flybuys points per $1. It’s also offering no annual fee for the first year ($99 per year thereafter), and 40,000 bonus Flybuys points after a $1,500 spend. This would equate to $200 off at the checkout.
  • Another card with a $25,000 p.a. income requirement is the BOQ Blue Visa Card. With an annual fee of $60, this card earns 1 Q Rewards Point per $1. Points can be used to pay down purchases or the card’s annual fee, to cover travel, to shop at Apple, to redeem for cashback, or to convert to Flybuys.

 
Want more? If your income is slightly higher, you may have a few more rewards earning options available to you. Let’s take a look.

      Velocity

  • The Virgin Australia Velocity Flyer Card earns 0.66 Velocity Points per $1 up to $1,500 per statement period, and 0.5 points per $1 thereafter. The card also offers a $129 Virgin Australia gift voucher each year (balancing out the standard $129 annual fee). Currently, the card has no annual fee in the first year, and 40,000 bonus Velocity Points up for grabs (minimum spend required). It has an income requirement of $35,000 p.a.
  • Charging no annual fee, the American Express Velocity Escape Credit Card offers an uncapped earn rate of 0.75 Velocity Points per $1. Additional points are available through the American Express Shop Small program, and when using the card to purchase eligible Virgin products and services. It has an income requirement of $40,000 p.a.

      Qantas

  • The Qantas American Express Discovery Credit Card offers an uncapped earn rate of 0.75 Qantas Points per $1, with additional points offered on Shop Small and eligible Qantas purchases. The card charges no annual fee ever, and is currently offering 10,000 bonus Qantas Points after a $750 spend. It has an income requirement of $40,000 p.a.
  • The HSBC Platinum Qantas Credit Card earns 1 Qantas Point per $1 up to $1,000 per statement period, then 0.5 Qantas Points per $1 (capped at 7,500 per statement period). Aside from complimentary insurance covers for its $99 annual fee, the card is currently offering 20,000 bonus Qantas Points after a $3,000 spend. It has an income requirement of $40,000 p.a.

      American Express Membership Rewards

  • Another AmEx rewards earner with no annual fee, the American Express Essential Credit Card offers an uncapped earn rate of 1.25 Membership Rewards points per $1, with more points on offer via Shop Small. Smartphone screen insurance is also on the table. It has an income requirement of $40,000 p.a.
  • The David Jones American Express Credit Card offers rewards earning within the Membership Rewards program or Qantas Frequent Flyer for a $99 annual fee. Aside from some appealing David Jones focused perks, the card offers an earn rate of up to 3 Membership Rewards points per $1, plus Shop Small earning. New cardholders can benefit from 50,000 bonus Membership Rewards points or 25,000 Qantas Points after a $1,500 spend. It has an income requirement of $40,000 p.a.

      Citi Rewards

  • The Citi Rewards Card earns 1 Citi reward Point per $1 on domestic spending, up to $10,000 per statement period. Extras include access to free wine via the Citibank Dining program, and complimentary insurances. New cardholders can benefit from 80,000 bonus Velocity Points after a $3,000 spend, and 70,000 bonus Velocity Points after 12 months. There is a $99 annual fee in the first year ($199 thereafter). It has an income requirement of $35,000 p.a.

      Cashback

  • The American Express Cashback Credit Card offers a base rate of 1% cashback on all eligible purchases, uncapped. Cardholders can also benefit from 1.5% bonus cashback via Shop Small, plus 5% bonus cashback (capped at $200) in the first three months. There is no annual fee in the first year ($10 per month thereafter), and extras include a BINGE basic subscription, a 12-month Centr fitness subscription, and smartphone screen insurance. It has an income requirement of $40,000 p.a.
  • The ING Orange One Rewards Platinum offers 1% cashback on eligible spending, capped at $30 per month (or $360 per year). Overseas travel insurance and no currency conversion fee make up the extras (terms apply), in return for a $149 annual fee. It has an income requirement of $36,000 p.a.

      Other Rewards

  • A new player on the block, the PayPal Rewards Credit Card sets its minimum income requirement at $35,000 p.a. While paying no annual fee, cardholders can earn uncapped points at a rate of 1 point per $1. Points can be redeemed in PayPal’s Checkout at more than 750,000 eligible PayPal businesses, or used to pay down purchases made on the card.
  • The BOQ Platinum Visa Card earns 2 Q Rewards points per $1, while offering insurances for a $129 annual fee. It’s also currently offering 120,000 bonus Q Rewards points (minimum spend applies). It has an income requirement of $35,000 p.a.
  • The HSBC Platinum Credit Card earns 2 Rewards Plus points per $1 on overseas spending, and 1 Rewards Plus point per $1 on domestic spending. With a reduced annual fee of $29 in the first year ($129 thereafter), the card also offers two airport lounge passes per year via LoungeKey, and a raft of complimentary insurances. It has an income requirement of $40,000 p.a.
  • The Suncorp Clear Options Gold Card earns 1 Rewards point per $1 up to $1,500 per month, and 0.5 points per $1 thereafter. It has a $120 annual fee and an income requirement of $30,000 p.a. The Suncorp Clear Options Platinum Card earns 1.25 Rewards points per $1, while offering complimentary insurances and 100,000 bonus Rewards points after a $3,000 spend. It has an annual fee of $129, and an income requirement of $35,000 p.a.
  • With no annual fee, the Kogan Money Black Card earns 2 rewards points per $1 at Kogan, and 1 point per $1 elsewhere (where 100 Points equals $1 of Credit). $400 Kogan Credit is on offer after meeting a minimum spend. It has an income requirement of $35,000 p.a.
TIP: While these cards have lower income requirements than some, it’s worth bearing in mind that rewards cards reward spending. If your lower income restricts the amount of spending you can do on the card, you may not earn enough points to make paying the annual fee worthwhile.

Pros and Cons Low Income Cards

  • Low income cards can provide you access to credit, making it easier to manage your cash flow.
  • Low income cards can make it easier for cardholders with lower incomes to get approved – although other eligibility criteria must be met.
  • Some low income credit cards have lower credit limits, which can reduce the temptation to spend.
  • Many low income cards – especially on the lower end of the scale – tend towards the basic. This can make it easier to focus on the essentials, i.e. spending within your means and repaying what you owe before it attracts interest.

  • If you want to earn rewards, you may need to have a slightly higher income to get approved for a larger range of rewards cards.
  • The same applies if you want access to perks.
  • If you choose a rewards card, you may not get much value on your lower spend.
  • If you need a higher credit limit – say, to make a larger purchase that you know you can afford to pay back – you may not be eligible for it.

💡Top Tips for Keeping Your Card in Shape

Want to make the most of your low income card once you’ve been approved? Here are our top tips for keeping on top of your card, so it doesn’t get on top of you.

  • Create a budget so you know how much you can afford to spend each month.
  • Track your spending using your card’s app or online banking.
  • Set a lower credit limit if you think you may be tempted to spend more than you can pay back.
  • Build up a rainy day fund that will allow you to cover your bills in times of need, so don’t have to rely on credit.
  • Avoid using a lot of credit products, such as multiple credit cards and BNPL services, as they may be difficult to track and keep and top of.
  • Try to avoid spending just because you have credit available. This can be particularly tempting when you’re stuck in lockdown.
  • When lockdown lifts and you’re free to travel, avoid making large impulse buys on your card. Yes, we’re talking holidays.

 

Photo source: Getty Images
Founder - Roland B Bleyer

Roland Bleyer

Founder of Creditcard.com.au. Roland has extensive knowledge about credit cards in Australia. Known as a credit card expert, he has been featured on tv and in various publications. Some popular offers on our site right now include the ANZ Low Rate. This special offer has no annual fee first year, a low purchase rate and long 0% balance transfer. Have a look also at the huge 0% for 30 months balance transfer from Citi with no balance transfer fees.

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