What do I need to get a credit card?

To get a credit card in Australia, there are a few basic requirements that you need to meet. These are:

• You must be 18 years or older to apply for a credit card.
• You should be an Australian citizen, a permanent resident or hold a valid and eligible visa.
• You must have a regular source of income and show that you can repay the debt you incur on the card.
• It’s essential to have a good credit score, as it helps the credit card providers to determine your creditworthiness.
• You'll need to verify your identity by providing identification documentation, such as your passport or driver's license.

The minimum credit score required to qualify for a credit card may vary depending on the card issuer and the specific card you're applying for. However, before applying for a credit card, you'll typically want your credit score to be in the 'good' to 'excellent' range for the best chance of approval. 

If you're wondering what's a good credit score, you’ll typically find that credit scores around 650 or more would be classed as ‘good’. In Australia, Equifax, Experian, and illion are the three main credit reporting agencies that each provide the information for calculating your credit score. While all three have slightly different score ranges and tiers, they’ll all rate a credit score of around 650 or higher as good. Of course, the higher you score over 650, the greater your chances of qualifying for a credit card with a competitive interest rate and any other benefits that may interest you. 

If you're planning to make a credit card application, remember to check your credit score first to ensure you're in a healthy financial position. If your score is lower than expected, consider ordering a copy of your credit file and reviewing it for any errors or issues. Another option is to wait some time and work on boosting your credit score before applying. However, a high credit score doesn’t guarantee that your credit card application will be approved.

While your credit score is a vital factor, it's not the only one card issuers consider when reviewing your application. Your income, employment status, and debt-to-income ratio are also considered. With some cards, there will actually be minimum income criteria you’ll have to meet before applying for the card. This is especially true for premium credit cards. Therefore, checking the eligibility criteria of various credit cards and ensuring that you meet them before applying is important. 

When applying for a credit card, you'll need to provide information to prove your identity, your financial history and your current financial capacity to repay the card. You'll typically need to provide the following documents to support your credit card application:

• A valid Photo ID card, such as your driver's license (if you have one), passport, or proof of age card.
• Documentation to prove your income, which generally includes your payslips and bank statements. If you're self-employed, you’ll likely be asked to provide your ABN and the last couple of years worth of tax returns.
• Details of any additional assets (such as your savings, a car or property you own or shares).
• Details of any existing liabilities, such as personal loans, HECS or HELP debt, mortgage, and other credit cards.

Getting a credit card could be a helpful tool for managing your finances, but it could also lead you into a debt spiral if you're not careful. 

A credit card could help you break down bigger expenses into smaller monthly repayments and earn rewards or other freebies for your spending. When used responsibly, a credit card could also help you to build your credit score. However, credit cards could make it easier to spend money you don't have. You may want to reconsider applying for a credit card if you find it challenging to stick to a budget or you think you won’t be able to repay the balance each time you’re sent a bill. 

Carrying a balance on your credit card could lead you to accrue debt that you may find challenging to pay off. Consider your spending habits and financial situation before applying for a credit card. Although you could use a credit card to manage your monthly expenses and handle unexpected costs, it's not a solution for getting out of debt or improving your financial situation.