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.
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.
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.
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.
|⚠ 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:
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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|Credit24 Short Term Loan||Jacaranda Finance Personal Loan|
|Max Loan Amount: $2,000 |
Establishment Fee: 20%
Monthly Service Fee: 2-4%
Terms: 6-12 months
|Max Loan Amount: $10,000 |
Establishment Fee: $0
Monthly Service Fee: $0
Interest: 24-48% p.a.
Withdrawal Fee: $0
Max Repayment Period: 36 months
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.
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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