Credit cards for temporary residents
You may be in Australia for an extended holiday or you’ve moved here to work, either reason you’re likely going to want to apply for a credit card. Let’s face it, the plastic is very convenient to have in your wallet!
As a temporary resident in Australia it’s not impossible to get a credit card but it can be a challenge. If you’re in Australia on a 457 visa, your chances of having your credit card application approved increases. Here are just a few reasons for applying for a credit card.
- No need to carry cash
- Paying bills and making purchases online
- Rewards e.g. frequent flyer credit card or cashback credit card
- In case of an emergency
- Convenience when travelling
- To boost your credit score and history
Banks that offer credit cards to temporary residents
Many of Australia’s major banks offer credit cards to temporary Australian residents. Each bank may have a slightly different criteria you have to meet in order for your credit card application to be approved. Approval often depends on what visa you are on.
If you are in Australia on a 457 temporary work visa there’s a good chance you will be able to get a credit card. Commonwealth Bank, HSBC, Westpac, American Express and NAB are some of the major banks that provide credit cards to non-permanent residents. Read each provider's policies before filling out an application form to find the one which you qualify for.Mozo can help you find the best credit card deals in Australia, compare over 195 credit cards from 58 banks.
Who’s eligible for a temporary resident credit card?
If you are a non-resident, there are a number of requirements you need to meet to be eligible for a credit card in Australia. Each provider may have a slightly different application eligibility criteria but these are the general requirements needed for approval.
- Minimum income requirements: Almost all of the credit card providers will outline the minimum income required to apply for a card if you are a temporary resident to Australia. While Australian citizens can apply for a credit card when earning as little as $15,000 per annum, the minimum income for non-permanent residents usually starts at $50,000 p.a.
- Credit history: As a temporary resident to Australia, your credit history needs to be just about impeccable to have you’re your credit card application approved. The credit card provider will usually check your credit history and if it’s poor or you don’t have one at all they won’t deem you eligible for a card.
- Length of visa: If you hold a 457 temporary work visa you are more than likely eligible for a credit card but you usually need to have at least two years left on the visa at the time of application. Crunch some figures into the Mozo credit card debt payments calculator to see how long it will take to pay off your card.
Who isn’t eligible for a credit card?
If you are here in Australia on a holiday, bridging, spousal or student visa your eligibility for a credit card is quite slim as you are on tight working restrictions. With limited options for income, a credit card provider is unlikely to approve your application as you can’t prove you’ll be able to make the repayments the purchases you make. Any holiday visas also make eligibility for a credit card difficult as your stay in Australia is short so card providers may not believe that you’re around long enough to clear any debt before you leave the country.
5 things you must know before you apply for a credit card
1. Credit limit: This refers to the maximum amount of funds a bank or financial institution will allow you to charge to the card. Avoid exceeding this limit as your provider will likely hit you with a penalty if you go over. Don’t borrow more than you can afford as it will cost you much more in the long run. Check out the Mozo budget planner.
2. Rates: We can’t emphasise enough how important it is to look at the interest rate the provider will charge you. A low interest rate is usually around 14% while some can be as high as 18%. How much interest you’ll pay will depend on the card you have, the purchases you make and when and how much you make in repayments.
3. Fees: Just because you’re not an Aussie, doesn’t mean you can avoid good old credit card fees! Make sure you are aware of all the fees that come with your credit card. Factor the fees in when you do your budget. Credit card fees include: Annual fee, cash advance fee, late payment fee and overseas currency conversion fees. Read our guide on avoiding credit card fees.
4. Repayments: For every purchase you make with your credit card you go into debt. The amount which you have borrowed on your credit card needs to be repaid to your provider. Repayments are usually made monthly. Use the Mozo credit card debt payments calculator to see how and when you’ll be debt free!
5. Minimum payment:
If you can’t afford to pay the full balance owing on your credit card at least pay the minimum amount by the due date. But when you only pay the minimum amount owing you will incur interest, fail to reduce the balance and may never become debt free!
Information you’ll need to apply for a credit card as a temporary Australian resident
Here’s a checklist of the information and documents you’ll need to supply your card provider. Keep in mind this is just a guide and some financial institutions may require additional information. Also, you still may not have your credit card approved just because you can supplied the following documents.
- Photocopy of your visa, which will be stuck to your passport
- Photocopy of the ID page of your passport (photo page)
- Letter of employment (on company letterhead) stating your salary and length of employment
- Proof of residential address in Australia e.g. utility bill, lease agreement or bank statement
Alternatives to a credit card while in Australia
If you don’t meet the credit card criteria there are other options to the plastic while you’re a temporary resident in Australia.
- Debit card – With a debit card you use your own money not the banks. So it can be easier to apply for a debit card; as your provider won’t need to do a credit check and you’re not borrowing money from them with the risk of not paying it back. One of the main advantages of a debit card is, you won’t fall into debt. Read the Mozo debit card guide to learn the main differences between a debit and credit card.
- Prepaid travel card – Preload a travel card before you hit the shores of Australia, that way you have Aussie dollars when you arrive and you’ll avoid overseas conversion fees. A prepaid travel cards also allows you to lock in an exchange rate before you travel so you don't have to worry about negative fluctuations while on holiday. Unlike your standard debit card, you do not need to have a bank account linked to the prepaid card.