What is the best way to choose a low income credit card?

Low income credit cards are low on income requirements and annual fees, making them ideal for low income earners

Income plays a major role in determining an applicant’s suitability for a credit card. It helps a lender decided on an applicant’s credit limit. And more importantly, it lets a credit card provider know whether an applicant can pay their debts if there’s an outstanding balance.

If you’re a low income earner, the minimum income requirements of the high-end credit cards, like Platinum and rewards cards, will be out of reach. But that doesn’t mean there isn’t a credit card to suit your situation.

Even if you don’t qualify for a credit card there are always prepaid cards and debit cards which may still be useful depending on what you want them for. Debit cards can be used online and do not have a minimum income requirement. But these cards do have their limitations as they can’t be used to borrow money on credit.

Low income credit cards

Minimum income earners could be suited to a low rate credit card. These cards have lower entry requirements, and unlike premium credit cards, they have low interest rates on purchases for the most part, which will cost less if a cardholder is carrying a balance from month to month. They also have the lowest annual fees in the market and some come with extended interest days on purchases when you first activate the card in addition to balance transfer promotions to relieve credit card repayment stress.

		ANZ First Visa Credit Card	ANZ Low Rate	Commonwealth Bank Low Rate Credit Card	St.George Vertigo	Suncorp Clear Options Standard Visa Card	Virgin No Annual Fee Credit Card
Purchase Rate (p.a.)		19.39% p.a.	12.99% p.a.	0% p.a. for 5 months (reverts to 12.99% p.a.)	13.24% p.a.	12.74% p.a.	18.99% p.a.
Balance transfer rate (p.a.)		0% p.a. for 9 months	0% p.a. for 9 months	5.99% p.a. for 5 months	0% p.a. for 8 months		2.9% p.a. for 6 months
Offer end date		30 June 2013	30 June 2013	30 June 2013	1 October 2013		30 June 2013
Cash advance rate (p.a.)		20.99% p.a.	21.49% p.a.	21.24% p.a.	21.49% p.a.	21.99% p.a.	20.99% p.a.
Interest Free Days		44 days	55 days	55 days	55 days	0 days	44 days
Fees & Charges
Annual Fee		$30 p.a.	$58 p.a.	$78 p.a. ($48 for qualifying customers)	$55 p.a.	$55 p.a.	$0 p.a.
Balance Transfer Fee							0%
Minimum Repayment		2%	2%	2%	2%	2.5%	2%
Interest Charged From		Purchase Date	Purchase Date	Purchase Date	Purchase Date	Purchase Date	Statement Date
Late Payment Fee		$20	$20	$20	$9	$10	$10
Over Limit Fee		$20	$20	$10	$9	$40	$40
Overseas Emergency Replacement			$0	$20	$52.50	$50
Overseas ATM Balance check		$0	$0	$1.25	$0
Overseas ATM Withdrawal		$4	$4	$4	$2	$5
Gambling Transactions Allowed		No	No	No	No	No	No
Additional Cardholder Fee		$0	$0	$0	$0	$0	$0
Number of Additional Cardholders		3	3		1	4
Application Requirements
Minimum Income		$15,000	$15,000			$25,000	$25,000
Minimum Age		18 years of age	18 years of age	18 years of age	18 years of age	18 years of age	18 years of age
Available to Temporary Residents		No	No	Yes – Conditions apply	No	No	No
Credit Rating Requirement		Good	Good	Good	Good	Good	Good
Min Credit Limit This is the lowest credit card limit that you can request. It is possible to apply for a higher credit card limit but not a lower one than this figure.		$1,000	$1,000	$500	$500	$2,000	$2,000
Max Credit Limit		$15,000	$15,000		$40,000	$25,000	$10,000

Here are credit cards with low minimum income requirements.

Tips for low income earners applying for a credit card

Be prepared. Don’t be daunted by all the questions and paperwork in a credit card application. Even if you are a low income earner you generally only have to show a minimum income of only $15,000 to be approved for a low income credit card. This is roughly $290 a week.

Apply for a joint credit card. The income on a credit card application can be a total of the household’s income so apply with your partner or spouse and combine your incomes to reach the minimum. Check this page for a list of institutions that offer joint account credit cards.

Know your current debt and commitments. A credit card provider will look at your current debt ratio before allowing you to take on any more debt. This means that you too need to look at how much of your income is already going towards a mortgage, a personal loan, a car loan or any other sort of debt. If you need to, pay down some of your existing debt before you apply for a credit card to lower your debt ratio.

Increase your income. Take on extra shifts at work or start a second job. If you’ve already taken on extra work make sure to include it in your income information on your application.

Check your credit record. While income is one important factor which determines your eligibility for a credit card, the other big one is your credit record. A credit record can be a real surprise packet, and if you don’t check it, you won’t know what’s on there that could make you ineligible for a credit card. Once you’ve checked your credit file, you need to pay the bad debts that you can to increase your standing.

Only apply for one card at a time. This tip relates to your credit record once more. If you apply for more than one credit card at a time, the credit reporting system marks those applications against your name, and I can be the difference between getting a credit card and not.

Don’t lie on your application. Lying on a credit card application is considered fraud, so don’t do it.

Example

Terry is working as a part time retail assistant while he studies to become a mechanic. He earns an annual income of $17,000. This translates to a weekly income of roughly $325 before tax. He’s applying for a credit card to be able to make emergency bill payments or purchases. His wife Demelza earns an annual income of $35,000.

If Terry applies for a credit card and includes both his own income and that of his wife, he may be able to qualify for a platinum or gold credit card, which may even come with a rewards program. Their combined income in this case would be $52,000.

Terry might still want to apply for a low rate credit card with only his income if his wife already has a credit card of her own. If he does this he’ll have a credit card with a low credit limit for emergency purchases and payments.

Credit card alternatives for low income earners

If a credit card is out of reach due to your income, there are a number of ways you can shop with security and convenience when overseas or online.

A prepaid credit card doesn’t allow you to spend more than you’ve loaded onto the card at any one time. It’s also a good way to get the security benefits and flexibility of a credit card while travelling overseas or shopping online. Simply transfer funds from your savings account either online, through BPAY or over the phone.

Example

Glenda is travelling overseas next year after she graduates from university. She’s already paid for her trip with the help of a gift from her parents, and now wants to sort out how she’ll keep her spending money safe while travelling. Her credit card application was recently rejected because she only makes approximately $12,500 a year.

Glenda decides to use an OzForex Travel Card. She can load up to nine different currencies onto the card, and can lock-in exchange rates for each of them. The card also has a security chip and PIN so her money is safe from credit card scammers.

Debit cards

Debit cards may also be a good alternative to credit cards. They allow you to use your savings but with the added features and worldwide acceptance of a Visa or MasterCard. They don’t have a line of credit like a credit card has, which means you can’t borrow funds from your provider to make purchases. On the flip side they also don’t require credit checks or have a minimum income — and you can’t get yourself into debt trouble.

Having a low income isn’t a death sentence when it comes to credit cards, but it can narrow your options. Think about your needs and why you want a credit card. Applying for a credit card simply for the ability to use it overseas or online might be better served with a prepaid credit card or debit card. If you have considered this and still need a credit card there are options like the credit cards on this page.

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Low Interest Credit Cards Deals

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			Interest rate (p.a.)	Balance transfer rate (p.a.)	Annual fee	Cash advance rate (p.a.)
	Commonwealth Bank Low Rate Credit Card	A low rate on purchases and balance transfers with a low annual fee.	0% p.a. for 5 months (reverts to 12.99% p.a.)	5.99% p.a. for 5 months	$78 p.a. ($48 for qualifying customers)	21.24% p.a.
	ANZ Low Rate	Save with a low rate on purchases and balance transfers with a low annual fee and ongoing purchase rate.	12.99% p.a.	0% p.a. for 9 months	$58 p.a.	21.49% p.a.
	St.George Vertigo	Low ongoing rate on purchases, introductory balance transfer offer, plus a low annual fee.	13.24% p.a.	0% p.a. for 8 months	$55 p.a.	21.49% p.a.

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Credit Cards Comparison

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			Interest rate (p.a.)	Balance transfer rate (p.a.)	Annual fee	Cash advance rate (p.a.)
	ANZ Low Rate	A low rate on purchases, balance transfer and a low annual fee.	12.99% p.a.	0% p.a. for 9 months	$58 p.a.	21.49% p.a.
	HSBC Credit Card	No annual fee for the life of the credit card. Plus a low balance transfer offer.	17.99% p.a.	0% p.a. for 6 months	$0 p.a.	21.99% p.a.
	Commonwealth Bank Low Rate Credit Card	A low interest rate offer on purchases and balance transfers.	0% p.a. for 5 months (reverts to 12.99% p.a.)	5.99% p.a. for 5 months	$78 p.a. ($48 for qualifying customers)	21.24% p.a.
	NAB Premium Card	Long term balance transfer offer with premium benefits such as travel insurance.	19.49% p.a.	1% p.a. for 12 months	$90 p.a.	21.74% p.a.
	ANZ Platinum Credit Card	No annual fee for the first year and a balance transfer offer.	19.39% p.a.	0% p.a. for 9 months	$0 p.a. annual fee for the first year ($87 p.a. thereafter)	20.99% p.a.

* The credit card offers compared on this page are chosen from a range of credit cards CreditCardFinder.com.au has access to track details from and is not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of terms 'Best' and 'Top' are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your own personal financial circumstances when comparing cards.