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Smart Money

Guaranteed Approval and Secured Credit Cards

Last updated

Pauline Hatch      

Credit cards that offer guaranteed approval in Australia are very rare. Here’s what you need to know about guaranteed approval for a credit card, and alternatives if you have bad credit.

‘Guaranteed approval’ credit cards don’t require a credit check for approval, and applicants may be approved more easily. Sometimes called ‘easy approval’ credit cards, these cards tend to be the preferred option for applicants with bad credit scores.

What about Secured Credit Cards?

While secured credit cards are available in North America, there are currently no secured credit cards on the Australian market.

Secured credit card providers require applicants to have equity in a property, or be able to deposit a sum of money into the bank which they can use as security if you fall behind on your repayments.

You might be able to use secured credit cards to rebuild your credit rating, since most providers report your repayment to credit bureaus. However, secured credit cards can be expensive to set up, and they also tend to charge high fees.

What are the alternatives?

If you can’t get guaranteed approval or secured credit cards in Australia, there are other options that might work for you.

Pay on demand apps as an alternative if you have bad credit

You can check out pay on demand apps in Australia, like Beforepay, which let you access your pay early and then repay it automatically over your next pay cycles. Pay on demand may help in emergency situations, and are one of the few options that often don’t require a credit check.

Beforepay

Access your pay early

You can access up to $2,000 of your pay for a 5% fixed fee. To decide your limit, Beforepay will securely connect with your bank to see your salary details.

⚠ Warning about Borrowing ⚠
Do you really need a loan today?*

It can be expensive to borrow small amounts of money and borrowing may not solve your money problems. Check your options before you borrow:

  • For information about other options for managing bills and debts, ring 1800 007 007 from anywhere in Australia to talk to a free and independent financial counsellor
  • Talk to your electricity, gas, phone or water provider to see if you can work out a payment plan
  • If you are on government benefits, ask if you can receive an advance from Centrelink: Phone: 13 17 94

The Government’s MoneySmart website shows you how small amount loans work and suggests other options that may help you.

* This statement is an Australian Government requirement under the National Consumer Credit Protection Act 2009.

 

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Dealing with debt that’s affecting your credit score with a balance transfer

If it’s credit card debt – not a default on your score – that’s stopping you from being approved for credit cards or other types of loans, you can use resources like a balance transfer credit card to get on top of it.

A balance transfer lets you move your credit card debt to a new card that offers 0% interest on your transferred amount. That means you can make a plan to pay down your debt without the monthly interest charges stacking up on top.

To be very clear though, balance transfer credit cards are still subject to credit checks, so a default on your credit score could cause your application to be denied.

Carefully check the details of all balance transfer credit cards to make sure it suits you and what you want to achieve. You can use our comparison tool to compare balance transfer offers, annual fees and interest rates.

Important to note: Balance transfer cards still require credit checks, so they’re better suited for those with good credit, but have credit card debt or the potential to default on a card.

Instant Approval Credit Cards

Instant approval credit cards are similar to guaranteed approval cards, but they do involve a level of credit check. These instant approval credit cards are often offered over the internet and will give a decision in around 60 seconds. They can sometimes charge a higher interest rate and offer a lower credit limit, as although they do have some form of credit check, they don’t use the same rating methods as standard cards.

Remember that every time you apply for a card that involves a credit check, you may be adding to your poor score. If you’re interested in a 60 second decision credit card, you can check the following credit card options:

  • ANZ Low Rate
  • ANZ Platinum Credit Card
  • ANZ First Credit Card
  • ANZ Frequent Flyer Black Credit Card
  • Westpac Low Rate credit card
  • Virgin Australia Velocity Flyer Card

‘First’ cards and no interest rate credit cards

‘First’ credit cards: these cards, like the ANZ First Card, are geared towards new credit card holders with little or no credit history. While it likely won’t stand up if you have bad credit, it may be easier if you’re just starting out.

No-interest credit cards: No-interest credit cards are relatively new in Australia. They don’t charge interest, just a monthly fee and minimum repayment amount. You can find out more about no-interest credit cards here.

Store credit cards

Store cards are similar to instant approval credit cards, because they offer an instant approval at the store. Store cards are often the first credit card carried by many people. If you want to apply for a store card, check the interest rate, as it can often be much higher than standard cards. If this is the case, always pay off the balance at the end of the month before interest starts accruing.

How to deal with bad credit

First up, apply for a copy of your credit file and see what it says about you. Apply to have any errors corrected, and start working on improving your credit. You can do that by:

  • Making all repayments on time, including your home loan, car loan, personal loan or credit card
  • Speaking to your creditors to work out a payment plan if you’re struggling to make repayments
  • Meeting with a financial advisor to discuss your options
  • Considering a debt consolidation plan

You can also try speaking to your bank to see if they’ll use your history with them as good will, even if you have poor credit history or none at all.

A Final Thought…

The factor in common amongst guaranteed or instant approval cards is the low-level or non-existent credit check. But credit card companies are keen on applicants having a good credit score, because people’s previous behaviour with credit tends to be one of the best indicators of their future use of credit.

As defaulted debts and chasing these defaults is one of the biggest costs incurred by credit card providers, a good way of limiting their losses, and so maintaining lower interest rates, is to limit the number of people carrying their credit cards who have a poor credit history. For this reason, a prospective applicant should consider whether he or she really wants a card that doesn’t require any credit check.

Pauline

Pauline Hatch

Pauline is a personal finance expert at CreditCard.com.au, with 8 years in money, budgeting and property reporting under her belt. Pauline is passionate about seeing Aussies win by making their money – and their credit cards – work smarter, harder and bigger.

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Ask Pauline a Question

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62 comments (showing the latest 10 Q&As)

Parbati Baidya

Parbati Baidya

8 December 2023
Am I eligible to get a credit card ?
    Pauline - CreditCard.com.au

    Pauline

    8 December 2023
    Hi Parbati, eligibility depends on a number of factors from your age, income and current debt through to your credit score and any previous defaults. Your best bet is to look through the cards you're interested in and check the eligibility criteria to see if it suits you. You can also check your credit score for free online - it should tell you if your score is Low, Good, or Excellent. Those are good starting points. Thanks Parbati!
Anthony Cooper

Anthony Cooper

9 November 2023
Looking for a good car loan or credit card to purchase a new 30 40k car
    Pauline - CreditCard.com.au

    Pauline

    15 November 2023
    Hi Anthony, a credit limit for that much may require a very, very good credit score - and even then you may not get a credit limit that high. You might also want to look at a personal loan, which you could potentially transfer over to a credit card with a 0% balance transfer offer down the track (if your credit is good). A balance transfer lets you pay off a transferred debt without paying interest during the promotional period. Only some cards allow transfers from personal loans, such as Coles, Virgin Money, Bank of Queensland and Citi. I hope that gives you some ideas, Anthony. All the best.
Loz

Loz

27 April 2023
What average score do you need for a credit card
    Pauline - CreditCard.com.au

    Pauline

    30 April 2023
    Hi Loz, a credit score is only one of the many factors that go into a credit application assessment. There’s other factors such as your income, your age,, debt-to-income ratio.. There’s also things like employment requirements so they can make sure that you’ll be able to service any debt you rack up on your card. Here’s a few steps you can use a guide when considering your next credit card application.
Abhishek

Abhishek

2 April 2023
Need a credit card soon
    Pauline - CreditCard.com.au

    Pauline

    3 April 2023
    Hi Abhishek, please feel free to compare some of the credit cards we’ve listed on our site. There are many options to choose from based on your needs and usage. You can explore various types of cards such as reward cards, travel cards, and online shopping cards, or make use of our comparison tool.
Christine

Christine

1 April 2023
Need to applied for credit card The
    Pauline - CreditCard.com.au

    Pauline

    3 April 2023
    Hi Christine, you have the option to use our credit card comparison tool to browse through various credit cards and the promotions they offer.
Kevin Marksteiner

Kevin Marksteiner

21 March 2023
I need to apply for a credit card for approximately $5K ASAP for an emergency operating procedure. I am full time employed and my base wage is xxx plus I must do 6 hours overtime every second Sat and I get commission for sales so my annual is in excess of xxx plus I have a good credit rating.
    Pauline - CreditCard.com.au

    Pauline

    22 March 2023
    Hi Kevin, when you apply for a credit card your application is subject to the card issuer’s review and potential approval. This can take anywhere from 3-10 days depending on a many number of things. And if you are approved you may not get your card in the mail for 5-10 days after that. Also, the credit limit you may be approved for depends on several factors that the bank issuers consider such as your creditworthiness, other debts and repayments, your annual income, overtime etc. Browse our reviews of credit cards and check out the minimum credit limits, you can then hit the “heart” icon to save the card to your shortlist, compare your shortlist side by side and make an informed decision once you’ve decided the card you want to apply for.
karan

karan

18 February 2023
need to apply credit card but credit score little bit low
    Pauline - CreditCard.com.au

    Pauline

    20 February 2023
    Hi Karan! If your score is low, you risk damaging it more by applying for credit and being denied. It might be best to find other ways to improve your credit first, by paying bills on time, lowering any credit limits on other cards, and paying off other debt. You can also look at other forms of financial help like the National Debt Helpline on 1800 007 007.
MONICA

MONICA

13 February 2023
NOT HAPPY WITH EITHER JACARANDA FINANCE OR CREDIT24 AS THEY DENIED MY LOAN FOR $5500 FOR 12 MONTHS
    Pauline - CreditCard.com.au

    Pauline

    15 February 2023
    Hi Monica, sorry to hear that your loan applications were denied. I understand that it’s frustrating. When you apply for a loan, lenders will take into consideration your credit standing, employment status, and financial circumstances in their decision-making. To improve your chances of being approved the next time you apply, check your credit score first and ensure that you meet all the eligibility criteria. Also, remember that too many credit inquiries (or applications) in a short period of time can hurt your credit score and may give lenders the impression that you are in financial distress, so remember to apply for a loan one at a time. Hope this helps and all the best, Monica.
Anita

Anita

27 January 2023
I really need your help thanks
    Pauline - CreditCard.com.au

    Pauline

    30 January 2023
    Hi Anita, please provide some more information and I’ll try my best to help.
Shiralee borg

Shiralee borg

28 December 2022
Hi I’m wanting to apply for a credit card
    Pauline - CreditCard.com.au

    Pauline

    3 January 2023
    Hi Shiralee, you can use our comparison tools to view some of the different card offers and select the one that suits you best. Please make sure to read the card’s eligibility criteria, terms, and its TMD before proceeding with your application.
Josephine taranto

Josephine taranto

17 December 2022
Can I get a credit card on unemployment centerlink pension
    Pauline - CreditCard.com.au

    Pauline

    19 December 2022
    Hi Josephine, credit card providers need to be able to ensure you can meet the minimum repayments before extending you a line of credit. You can read about some of the main banks minimum income requirements in our guide to low income credit cards.

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