Credit cards for expats and temporary residents - no citizenship required

If you’re living in Australia on a student or working visa, getting your finances set up can be confusing. Credit cards can be overwhelming at the best of times, whether you were born here or abroad.

Things become that little bit more complicated when you don’t have citizenship or permanent residency. While banks still consider the same criteria, a lack of Australian banking and credit history add some extra steps that homegrown Aussies might not have to worry about.

Why should I get an Australian credit card?

Thinking about using the same plastic you did back home? It might be tempting to keep the same routine, but there are definitely some perks to applying to a local card.

• Skip fees. Every transaction you make on a foreign credit card can attract foreign transaction fees, often added on as a percentage of the purchase price.

• Miss out on expensive conversion rates. While you might occasionally benefit from fluctuating exchange rates, adding the cost of an exchange on top of every transaction can be costly. On top of that, many cards charge a fee for performing the conversion.

• Easy repayments. With an Australian bank account, you can set up your card repayments to direct debit. Matching the currency keeps you from losing money on those repayments.

What do I need before I apply for an Australian credit card?

Every card has different requirements, so it’s definitely worth checking what is needed by the one you’re looking into.

Some common things you might find in the requirements are:

• Your visa. In lieu of citizenship or permanent residence, banks will have an eye on your visa. You’ll need a valid visa, often with a certain amount of time left. The type of visa is likely to be considered - working holiday and transit visas are unlikely to be approved for credit cards with their short term nature, while work and student visas that allow you to work are more likely to get approved. Each bank is different.

• An Australian bank account. In order to hold an Australian credit card, you’ll need an Australian bank account.

• An income in Australia. In order to make your payments in Australia and to show your eligibility for credit, most credit cards will require you to show a source of income. If you are applying in advance, a letter of employment or contract work in the place of payslips. Some banks might have minimum income requirements or length of contract requirements for credit card applicants - make sure to check.

• 100 points of identification. If you are applying for a credit card through the same bank, you may not have to do all the same ID checks. If you are going through a new provider, this is a standard identification check. It can involve your passport along with ID including a licence, a student card, bank statement, recent rent records, recent utility bill and more (all of which have a points value).

• Proof of address in Australia. In addition to proving your identity, your address is essential. This is shown through records of rent, rate notices or utility bills.

How do I build my credit score in Australia?

Australian providers are less interested in your credit history before you came here and far more interested in the credit you’ve taken on since arriving.

If your credit score is non-existent or looks a bit low, it could be because most of your credit history exists overseas. You can still build your creditworthiness and improve your credit score by setting up direct debits for household utilities and paying them off in full and on time. Similarly, small loans you can pay off in full in a set time frame can get your credit score looking good - just make sure not to take on more than you can handle to end up with bad credit.

If you have less (or less than spotless) credit history, more basic credit card options with lower credit limits are more likely to get approved. Paying this off in a timely manner allows you to work up to credit cards with higher limits and more perks.

What should I look for in a credit card as a temporary resident?

Choosing a credit card as an expat is much the same as choosing a credit card at home, so you’ll be looking for similar things.

If points and rewards are important to you, you’ll look for a card that prioritises rewards (just make sure you have time to cash them in while you’re here). If you want to keep the interest rate low on any outstanding balance you carry from month, you could be suited to a low interest rate card. 

The main things to consider if you’re applying for a credit card as a temporary resident are any restrictions or requirements on offers and card holders. For instance, if a card includes complimentary travel insurance, will you be covered and is that a worthwhile inclusion for you? If you’re prone to homesickness and planning on making some purchases from overseas, be wary of credit cards with high foreign exchange fees.

Check out our general guide to applying for a credit card to see more about the process. Find some highlights with a look at Mozo’s award-winners for best credit cards.