Low Income Credit Cards

Updated 1 April 2020

When comparing credit cards, you may have noticed that many card providers include a minimum income in their eligibility requirements. This may be $35,000 per year, $50,000 per year, or for platinum cards, as much as $75,000 per year. If you don’t meet these minimum income requirements, then it’s more than likely your application will be rejected.

So, what can you do if you have a low income but still need access to credit? One solution could be a low income credit card. Designed specifically for low income earners, these cards have a low minimum income requirement, so even if you don’t take in that much each year, you may still enjoy access to credit, as long as you meet the card’s other eligibility requirements.

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Why do you need to provide your income when applying?

When you apply for credit – whether that’s a credit card, personal loan, home loan or any other form of credit – the provider needs to know you’ll be able to pay back any money you borrow. One way they may check this is by assessing your credit history. This tells the provider how well – or badly – you may have dealt with credit in the past.

The provider will usually check your employment status as well, alongside your income. This tells them whether you will have the means to repay any outstanding balance you accumulate. If you have a chequered job history, or you have a low income, it may suggest to the provider that you would be unable to pay back the credit they provide, so you would be too risky to lend to.

What is a low income credit card?

Low income credit cards can provide low income earners with access to credit. With these cards, card providers tend to be more lenient, allowing applicants to be approved even if they have lower annual earnings. While other eligibility requirements must be met, you could be approved for one of these cards with annual earnings under $25,000.

Why would you choose a low income credit card?

There are plenty of reasons why you may choose to apply for a low income credit card. First and foremost, a low income credit card provides access to credit. Helping to ease your cashflow, a credit card can help you cover purchases that you may not be able to pay for upfront, to then pay them off before interest starts accruing.

Having a low income credit card could also help you build your credit. If you have a few blips on your credit file, you may want to start rebuilding your credit by acting responsibly. You may be able to do this by using your card, not spending more than you can afford to pay back, and by clearing your balance each month by the due date.

Of course, you may choose a low income credit card because you have no other option. With your lower income, you may not be able to get approved for any other type of credit card. However, a low income credit card may still provide you with a credit card, that you can use day-to-day, or keep for emergencies should you need it.

What does a low income credit card have to offer?

  • Lower minimum income requirements: As we mentioned – and as its name suggests – a low income credit card is designed for applicants who have a lower annual income. If you have an annual income between $15,000 and $25,000, you may find approval in a low income credit card.
  • Low annual fee: Low income credit cards tend to have low annual fees. This can help you to save money year-to-year, but it should be noted that because these cards have lower annual fees, you will usually find they have fewer features as well. Keep an eye out for promotional $0 annual fee introductory offers, but be aware of what the standard annual fee is, and make sure it’s affordable.
  • Lower interest rates: While some low income credit cards have high purchase rates, you may find a suitable option with a lower purchase rate. If you think you may not be able to clear your balance each month, a card with a low purchase rate could offer more savings in the long run.
  • Low credit limits: When you apply for a credit card, the card provider determines how much credit to extend to you. This is your credit limit. As you have a lower income, it’s likely your credit limit will be lower. But, this can help to avoid spending more than you can afford, by keeping a manageable limit on your spending.
  • Interest free days: Most credit cards offer interest free days on purchases, though the number of days will depend on the card. To take advantage of this feature, you usually have to clear your balance each month.
  • Basic features: For the most part, low income credit cards are pretty basic. In general, low cost cards are no frills. That means it’s unlikely you’ll find a low income credit card with perks like a rewards program, insurance covers, or a personal concierge service. However, if you’re trying to save money and simply want access to credit, this is no bad thing.

Pros and cons of low income credit cards

Pros

  • Offers access to credit, even to cardholders with low income
  • Allows cardholders to build their credit
  • May offer low annual fees
  • May offer low interest
  • Lower credit limits reduce the opportunity to get into trouble with debt
  • Access to basic credit card features

Cons

  • Tend to be basic, not many fancy features on offer
  • Rare to find rewards programs

Thinking about applying for a low income credit card? You may be able to improve your chances of approval by doing the following:

  • Get your finances in order: Know where you stand financially. This includes getting your debts in order. If you have any default listings on your credit file, these will likely have to be paid before you can apply for a credit card. You can apply for a copy of your credit file for free from one of the major credit reporting agencies.
  • Start saving by opening a savings account: By creating a history of banking with the provider, you may be able to improve your status as a valued customer.
  • Pay down debts: If you have debts, it can help to pay them down as much as possible before you apply for a new card. By lowering your existing debt, you can make yourself seem less of a risk to your potential card provider, while also showing off your ability to be a responsible borrower.
  • Apply as a joint applicant: If your income is too low to apply for a credit card, you may be able to apply jointly with another person, such as your spouse. This allows both of your finances to be assessed by the credit card provider during the application process.
  • Include all sources of income: Have a good think about all the money coming into your household. Your income can include more than just your paycheque. It may also include any freelance work you do, or any government payments. Be sure to include this information on your application.
  • Be honest: Above all, be honest. The card provider can cross-reference your details, so there is no point lying simply because you think it will get your application approved.

Want to know whether you can afford to keep a low income credit card in your wallet? How much your credit card costs you will depend on the card you choose, and the way in which you use it.

  • Annual fees: Unless you choose a low income credit card with no annual fee, you will pay an annual fee each year you keep the account open. By choosing a card with a low annual fee, you can help keep costs down.
  • Purchase rate: This is the standard interest rate that’s applied to purchases made on the card. As long as you clear your balance by the due date each month, you won’t have to worry about interest. If you carry a balance on your card, interest will start accruing.
  • Cash advance rate: This is the standard interest rate that’s applied to cash advance transactions, such as ATM withdrawals. This rate is typically higher than the purchase rate, and is usually applied from the day you make the transaction. Fees may also apply, so it’s best to avoid this type of transaction whenever possible.
  • Cash advance fee: When you use your credit card for a cash advance transaction, the card provider may charge you a cash advance fee of around 2% to 3% of the total transaction amount.
  • Foreign transaction fees: Using your card to make purchases in foreign currencies – for example, if you travel overseas or use your card online at overseas merchants – will usually attract a foreign transaction fee. This fee is usually between 2% and 4% of the total transaction.
  • Other fees: Depending on the card, there may be other fees that apply, such as late payment fees. Check the credit card’s product disclosure statement (PDS) for fee details, so that you can factor in all the costs before you apply for a card.

Comparing credit card options can be tricky. Not only do you have to think about what the card has to offer and how much it could potentially cost you to keep in your wallet, you also have to think about what is expected of you if you are to be approved.

  • Your credit history: One of the most important factors to determine the success – or rejection – of your credit card application is your credit history. If you have a poor credit history, you may find it hard to get approved for credit. If you do get approved for a credit card, use the opportunity to build your credit by making repayments on time and spending wisely.
  • Your income: Of course, you need to look at the minimum income requirement on the card before you apply. Make sure that you have all of the necessary documents to prove your annual income before you apply.
  • Your ability to repay: Applying for a credit card you can’t afford is not a great idea. Think about how much you want to pay in annual fees, and if you think you might carry a balance, choose a card with a low purchase rate.

 

If you don’t meet the minimum income requirement, you may still have alternative options. You may be able to pool your earnings with your partner, to then apply for a credit card in joint names. Take note, not all providers allow for this. They may require an application from the primary cardholder (who meets all eligibility requirements), and then an additional cardholder can be added to the account.

Choosing a credit card can take time. No matter what type of credit card you want, you need to know what to look for – as well as what you need from your card. First up, consider your individual circumstances. What do you need a credit card for? How often will you use it? Will you be able to clear the balance month-to-month?

This should help you narrow your search. If you want to keep a credit card for emergencies, one with no annual fee may be a good option. If you will clear the balance each month, you may consider a card with perks and rewards. If you want to save on interest and think you may carry a balance, a low rate card could be the best option for you.

Now you know what you need, take a look to see what’s on offer. Use CreditCard.com.au to check out the range of cards within the category you’re interested in. Look for extras such as features and rewards, but if you want a low fee or low rate card, bear in mind features on these cards are usually basic. Take into account, annual fees, interest and credit limits. Now, it’s time to apply.

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5 questions (showing the latest 10 Q&As)

Sharlene

Sharlene

9 February 2020
Is there a creditcard for pensioners
    Roland B Bleyer - CreditCard.com.au Founder

    Roland

    10 February 2020
    Hi Sharlene, there is no particular card that is designed just for pensioners. The bank will evaluate a pensioner just as they do other customers. You need to have good credit for approval. Pay all your bills on time and also show that you have extra funds available to pay for the credit. I would look at a low income card. I would stick to the big4 or larger banks when applying - ANZ, NAB, CBA etc.
Roland

Roland

2 December 2019
Hi Ann, I would stick to the bigger banks. Have a look at the ANZ Low rate.
Adam

Adam

19 November 2019
Hi Roland, thought I would contact you to see if you can advise me. I am on the aged pension and with all ancillary benefits receive $1060 per fortnight in addition to which I receive circa $3000 per annum in dividends from shares. Currently have approximately $8000 in cash. No debts. I live off the pension and reinvest tge share dividends. I have 2 Platinum credit cards, different banks, no debt outstanding. One of the banks has recently changed their condition of providing free travel insurance and I am seeking a replacement with another provider. I am seeking a credit card which provided FREE travel insurance for someone aged 75, including medical and hospital. Given my low income I have been rejected by a credit union and advise by 2 banks any application is likely to be rejected. My credit score, according to a credit evaluating company is 862/1000. Despite intending to cancel one of my existing credit cards, if provided with an alternative card by another credit card provider, I am making no progress. Any advise you can give woukd be appreciated
    Roland B Bleyer - CreditCard.com.au Founder

    Roland

    20 November 2019
    Hi Adam, firstly I would suggest that you cancel the card that is no longer of use to you. These days the banks will max out any credit cards you have. Look at the payments required to pay it off over 3 years. The more credit you have the harder it is. For the card you are keeping, I would suggest that you lower the credit limit (if you can live with it). That way you again are reducing your credit. Thus increasing your chance for approval of a new card. All this being said, it still could be difficult to get a card with overseas travel insurance for your age with a circa 30k income. I am struggling to think of a provider that could work unfortunately. What are the 2 current credit cards you have and what are the limits with them?
Haigouhi Jelenkerian

Haigouhi Jelenkerian

24 September 2019
I’m on disability pension which credit card I should apply too
    Roland B Bleyer - CreditCard.com.au Founder

    Roland

    24 September 2019
    Hi Haigouhi, I would suggest you stick to the bigger banks. They can see the pension as income. How about the ANZ Low Rate? This card has low income requirements and generally high approval. To apply for an ANZ Low Rate credit card, you need to: Be 18 years of age or over, be a permanent Australian resident or a non-permanent resident with more than 9 months remaining on your Visa plus have a good credit rating. Find out more about Credit Reporting.
Greg Fildes

Greg Fildes

4 August 2019
How do I find a bank orother financial services co that considers applications for LOW INCOME credit card applications
    Roland B Bleyer - CreditCard.com.au Founder

    Roland

    5 August 2019
    Hi Greg, minimum income requirements are at $15,000. A card like the ANZ Low Rate fits that bill. I do not know of any cards in Australia that have a lower min income to apply. There are some that do not provide guidance. Though I assume at least 15k to apply plus have good credit for approval.
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