What is the best way to choose a low income credit card?Posted March 2nd, 2010 and last modified June 17th, 2013
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
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%|
|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|
|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.
|Max Credit Limit||$15,000||$15,000||$40,000||$25,000||$10,000|
ANZ First credit card
ANZ first is a credit card with a low annual fee of $30. For credit card customers who’ve already racked up a credit card debt want to transfer their balances to a lower interest rate to create some breathing room and to save some money, the ANZ First has a balance transfer rate of 0% p.a. for 9 months.
It has a low purchase rate of 19.39% p.a. and a minimum annual income requirement of $15,000.
Here are credit cards with low minimum income requirements.
The ANZ Low Rate credit card
The ANZ Low Rate is one an example of a card accessible to low income earners. It has a low purchase rate of 12.99% p.a. combined with an annual fee of just $58.
The ANZ Low Rate has a minimum annual income of $15,000. This equates to a weekly income of only $300.
It’s also a good option if you want to transfer balances over from your existing credit card. The ANZ Low Rate has a balance transfer rate of 0% p.a. for 9 months, this feature offers relief for cardholders who are incurring high interest charges on an existing credit card.
Commonwealth Bank Low Rate credit card
The CBA Low Rate also has an annual fee of $78, so the savings made using the low purchase rate aren’t swallowed up by expensive fees. If you have an existing balance from another credit card the CBA will also give you an introductory transfer rate of 5.99% for 5 months. The transfer rate promotion isn’t as long as low as the ANZ Low Rate, but it’ll still go some way to helping you get your financial freedom back.
St. George Vertigo MasterCard
St. George’s Vertigo is another worthy addition to the low rate credit card stable. It boasts a low purchase rate of 13.24% p.a. with a balance transfer rate of 0% p.a. for 8 months. The Vertigo could be a great card to carry out your daily spending on and pay off any stubborn credit card debts.
It also has a low annual fee of $55 p.a. and no listed minimum income.
Suncorp Clear Options Standard credit card
Suncorp Bank Clear Options Standard is an enticing low rate, low annual fee credit card worth considering. It is hard to beat this low purchase rate of 12.74% p.a.. This card is good for customers who struggle to pay their balance in full every month, as the interest rate on purchases is one of the lowest around and represents great value.
It also has a low annual fee of $55 p.a. and a minimum income of $25,000.
Virgin No Annual Fee credit card
Virgin No Annual Fee offers a cracking free annual fee. For consumers who are carrying an existing credit card debt, the balance can be transferred to this card for a low balance transfer rate of 2.9% p.a. for 6 months. Doing so could be a saviour for customers looking to payoff debt with a low interest rate.
It also has a minimum income of $25,000 and a purchase rate of 18.99% p.a..
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.
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.
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 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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