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Guaranteed Approval and Secured Credit Cards
Smart Money

Guaranteed Approval and Secured Credit Cards

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Finding a credit card that offers guaranteed approval in Australia is very rare. The GFC and the resultant credit crunch made credit providers wary of lending to high risk applicants, which meant more credit checks and fewer guaranteed approvals.

Guaranteed approval credit cards – as the name suggests – allow credit card applicants to be approved without a credit check. They tend to have a higher interest rate, a lower credit limit, and fewer features than standard credit cards.They can sometimes be referred to as easy approval credit cards, since they do not require credit checks and applicants tend to be approved easily. For this reason, they tend to be the preferred option for applicants with bad credit scores.

Secured Credit Cards

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

Similar to guaranteed approval credit cards, secured credit cards also tend to approve all applicants – as long as they have sufficient equity in a property, or are able to deposit a sum of money into the bank. Because these cards are secured against either a house or a deposit, the provider can draw against the security if the card holder falls into default.

Secured credit cards tend to be quite expensive to set up, due to the required title approval, and they also tend to charge high fees. They are a popular way for people with a poor repayment history to rebuild a credit rating, as most of them report repayments to the credit bureaus. After a year of consistent and responsible repayments, a poor credit rating can often be improved.

What are the alternatives?

One reason many applicants opt for a guaranteed approval credit card or secured credit card is their poor credit history. But if those types of cards aren’t available in Australia, what are your other options? The rise of pay on demand apps in Australia has grown over the past 12 months. Beforepay allow you access to your pay early, but for a fee.

Beforepay

Access your pay early

You can access up to $1,000 of your pay for a 5% fee. To decide your limit, Beforepay will securely connect with your bank to see your salary details.

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⚠ 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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  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. If you currently have a home loan, car loan, personal loan or credit card, make sure you pay all your repayments on time. If that’s not possible, speak to your creditors to work something out, speak to a financial advisor to discuss your options, and consider a debt consolidation loan. If you have problems paying off your credit card, consider applying for a balance transfer credit card to take a break from interest and start paying down more of your debt. If you have poor credit history or no credit history, try speaking to your bank to see if they could offer you a credit card. You may also want to look into ‘First’ credit cards, such as the ANZ First Card. These cards are targeted towards applicants with little or no credit history, and may be easier to get for those who are just starting out. You could also investigate no-interest credit cards. These are a relatively new product in Australia and don't charge interest, just a monthly fee and minimum repayment amount. Learn more about these options here.

Instant Approval Credit Cards

Instant approval credit cards are similar to guaranteed approval cards, but they do actually involve some credit check consideration. These instant approval credit cards are often offered over the internet and will give a decision in around 60 seconds. Be aware that 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. Interested in an 60 second decision credit card? Check out 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
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.

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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24 comments (showing the latest 10 Q&As)

Sana Mills

Sana Mills

19 November 2021
Would like to apply for credit card with bad credit rating
    Pauline - CreditCard.com.au

    Pauline

    22 November 2021
    Hi Sana, thanks for your interest. Please note that every card requires the applicant to have a good credit rating. If you want to start learning about building your credit, we have written an article on tips on how to build your score that may be of help.
Darryl

Darryl

26 September 2021
Who do I apply to for a guaranteed approval
    Roland B Bleyer - CreditCard.com.au Founder

    Roland

    29 September 2021
    Hi Darryl, thanks for your question. There’s a common factor in guaranteed approval cards and that is there is no real credit check. Unfortunately, these types of cards don’t exist outside of America. As credit card companies in Australia want you to have an excellent credit score. Banks predict previous behaviour with lines of credit as an indicator of their future use of credit. Hope this has helped explain the topic a bit more for you.
Chris Austin

Chris Austin

19 August 2021
What if I have only one default from 4 years ago Telstra. Which will off next october. Credit score 439
    Roland B Bleyer - CreditCard.com.au Founder

    Roland

    20 August 2021
    Hi Chris, when you have a mark on your credit file, it’s best practice to not apply for any form of credit and keep any utilities or accounts in good standing. Once your credit file is clean, check your score again and start comparing credit cards.
pamela

pamela

15 August 2021
hi i am receiving centrelink parenting pension...are there any credit cards or personal loans i would be eligible to apply for?
    Roland B Bleyer - CreditCard.com.au Founder

    Roland

    16 August 2021
    Hi Pamela, there are a range of credit cards that have lower income requirements. We can’t advise on whether you’ll be approved or not, but it’s always a good idea to get a copy of your credit report to see where you stand with the banks. Thanks for your comment.
Luke Elson

Luke Elson

10 August 2021
At the moment I have currently started a new contracting job, starting at 29 hr, depending on job, I'm about to do more danger pay work for more. My credit score bad and i haven't had a pay in over 6 weeks and i would love a credit card low interest repayments and a high cap, or interest free for an amount of time to pay off before interest rises. I'm 28 and have never had a credit card. And one could have come in handy a few times, when I'm short for a week or two..
    Roland B Bleyer - CreditCard.com.au Founder

    Roland

    11 August 2021
    Hi Luke, thanks for your question. Credit cards have different eligibility requirements that need to be met. First, I would suggest to get a copy of your credit report before considering any applications. You’ll need to provide the bank with evidence of your earnings on any application for credit. You can learn more about building your credit score and profile with our handy guide.
BEN JONES

BEN JONES

23 July 2021
i have recently returned home to australia after 13 years in NYC. Im trying to build my credit so i dont need to continue to use my american card here. im working freelance for advertising. is this something you can help with
    Roland B Bleyer - CreditCard.com.au Founder

    Roland

    26 July 2021
    Hi Ben, thanks for your question and welcome back! To start we suggest checking out the article we’ve written for tips and information on Your Credit Score And How To Build It. You should also get a copy of your credit file online as USA and Australian credit scores and files differ dramatically. As a rule of thumb you could check the list of credit cards that could help you build your credit. Hope this helps!
Kristina

Kristina

7 July 2021
Looking for an unsecured credit card for a very low limit
    Roland B Bleyer - CreditCard.com.au Founder

    Roland

    7 July 2021
    Hi Kristina, thanks for your question. We’ve compiled a list of low limit credit cards here to compare. You can click into each card to read our review, and also see real customer reviews of the card to help you make a decision.
Tevita

Tevita

14 May 2021
What’s the best & easiest credit card to get to build up my credit score?!
    Roland B Bleyer - CreditCard.com.au Founder

    Roland

    17 May 2021
    Hi Tevita, thanks for your question! Whilst we can recommend any one card, the best card for you comes down to how you plan to use it, and your individual circumstances. A great place to start will be our Your Credit Score And How To Build It article, as well as the list of credit cards that could help those who want to build their credit. Hope this helps!
Gregg

Gregg

27 March 2021
I am on a Comcare pension. I only want a credit card for emergencies or to purchase concert tickets online because bank cards aren't always accepted. I don't need rewards or a big credit limit. $5-6000 is all I need. Would it be easy for me to apply and what would be the best company/card for me to apply for? Thanks
    Roland B Bleyer - CreditCard.com.au Founder

    Roland

    29 March 2021
    Hi Gregg, if Comcare is your primary source of income it may be difficult to apply for a credit card online. I would recommend that you talk to your current bank and see if they will issue you a no annual fee card (these are great for emergencies since you won't have to pay if you're not using it - and as long as you pay it off when you do). They already have all your financial history and details so the application might be simpler than with a new lender. I hope that helps.
Clint Zaraftis

Clint Zaraftis

25 March 2021
Where can I apply for a guaranteed approval credit card?
    Roland B Bleyer - CreditCard.com.au Founder

    Roland

    25 March 2021
    Hi Clint, there are no true "guaranteed approval" credit cards in Australia. There are "instant approval" cards and you can see a couple on this page. But approval isn't guaranteed and is based on your credit history, income, expenses, and other bank eligibility criteria. If you're looking for a card where you'd be more likely to be approved, one with a low minimum credit limit is a good place to start comparing.
Ben Singh

Ben Singh

1 March 2021
Can I get credit card with average credit score(526)?? If yes what credit card is the best??
    Roland B Bleyer - CreditCard.com.au Founder

    Roland

    2 March 2021
    Hi Ben, unfortunately I can't give you any indication of whether or not you'll be approved for a credit card. Many lenders require that you have a good credit history and depending on which bureau you got your score from, your score may fall in a different range. A good first step would be to call the bank you already have an account with and see if they can offer you a card - since they already have your information and financial history. You'll want to look for something with a low minimum credit limit to start out. I hope that helps.
Naomi Wogan

Naomi Wogan

1 February 2021
Can get a credit card with bad credit and centerlink
    Roland B Bleyer - CreditCard.com.au Founder

    Roland

    2 February 2021
    Hi Naomi, you will not be able to get a credit card yourself. Though you may be able to get a Visa or Mastercard Debit account. This is where you load your own money onto the card. Another option could be for a family member or friend to get a card. Then they make you a secondary card holder.

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