Minimum income requirements for credit cards
The minimum income requirement can be as low as $15,000 per year for some credit cards but others won't list a requirement. Here's what you need to know.
When you apply for a credit card, your income is an important factor that the bank will use to help judge your ability to make repayments. While minimum income requirements for credit cards generally start at $15,000 per year (before tax), you also need to provide proof of income, list your expenses and meet other eligibility criteria to get approved.
What are minimum income requirements?
Minimum income requirements show you the lowest amount of money you need to earn to apply for a credit card. This amount is typically based on what you earn each year, before tax.
If you apply for a credit card with an income requirement that is higher than what you earn, you'll be declined, which can hurt your credit score.
Other credit card income requirements
All credit card applications in Australia require details of your income, including cards that don't list a specific minimum income requirement.
This is because credit card income criteria help banks and card issuers meet their responsible lending obligations. They have to assess each credit card application based on your ability to repay the credit limit over a 3-year period, with interest, to make sure the account is appropriate for the individual's financial situation.
Compare credit cards with low minimum credit limits
How can I find out what the income requirement is for a credit card?
If a credit card has a minimum income requirement, you'll see it listed in the "Eligibility" section of credit card reviews on Finder. You'll also see it on the credit card provider's website and on the application page (before you apply).
What if there's no income requirement listed?
Credit card providers don't legally need to list a minimum income requirement, as your annual earnings are only one of the factors used to assess your application. Other key factors include your employment status, assets and savings, existing debt and regular expenses.
So if you can't find an income requirement, check if you meet the card's other eligibility requirements. You could also try contacting the issuer to ask about your eligibility based on how much you earn.
How can I figure out if I'm eligible to apply for a card when no minimum income is listed?
The card's other eligibility requirements will help you work out if a card is appropriate for your situation. This usually includes your Australian residency status, age and credit history.
Making sure you meet the eligibility requirements that are listed and including as much detail as possible on the application can improve your chances of approval.
*Finder's Chance of Approval feature provides an indication only. It is not a guarantee of approval. Applications for credit products are always subject to the lender's T&CS and application and lending criteria.
Another factor to consider is the card's minimum credit limit. While credit limits are subject to approval, having enough income to service the minimum limit on a card does give you an idea of how appropriate it could be for your circumstances.
As an example, if you budgeted $100 per month for repayments, a credit card with a minimum limit of $6,000 would not be appropriate because it would take over 5 years to pay off the entire balance if you maxed out the card – and that's not including interest charges.
In comparison, a credit card with a $1,000 minimum credit limit could be more appropriate, as monthly repayments of $100 would clear the balance even if the card had a 19.82% p.a. interest rate (which is the average standard variable credit card rate in Australia right now).
Comparison: High vs low minimum income requirement
The following table shows the differences between a card with a high minimum income requirement and one with a low minimum income requirement. In general, high income credit cards offer more “other features”, while low income credit cards are good for basic money management.
|Credit card||Minimum income||Minimum credit limit||Purchase rate||Other features|
|Citi Prestige||$150,000||$20,000||21.49% p.a.|
|Virgin No Annual Fee||$25,000||$2,000||18.99% p.a.|
The examples in this table also show that high minimum income credit cards tend to have bigger minimum credit limits and more expensive purchase rates. These features, as well as the complimentary extras, are designed to benefit people who earn and can spend more money. They're also suited to people who regularly pay off their balance in full to avoid interest rates.
In comparison, credit cards with lower minimum income requirements tend to have smaller credit limits and fewer features as well as more competitive purchase rates and fees.
Why are some income requirements so much higher than others?
The relationship between income and credit cards can influence a wide range of credit card features, from the credit limit and interest rate of the card right through to complimentary extras or rewards programs. In general, cards with high minimum incomes will have a lot more features than low income credit cards, but there are still many different credit cards you can choose from if you make a relatively low income.
Other factors that affect your credit card application
- Supporting documentation. When you apply for a credit card, make sure you include as much detail as possible about your finances. This could include:
- Recent payslips
- Bank statements
- Your savings account balance
- Accurate information about your household expenses
- Credit score. Your credit history or credit score has details of your current and previous loans, cards and other credit accounts (such as utilities). Generally, you need to have at least a "good" credit rating to apply for a credit card. The other accounts you need to service could also be factored into the lender's assessment when you apply. If you don't know what your credit score is, you can get a copy of your credit report for free through Finder.
- Residency status. While credit card issuers generally prefer people who are citizens or permanent residents of Australia, there are some credit cards available for people with temporary residency status. These cards may have higher minimum income requirements to help meet lending standards.
- Employment status. Credit card issuers typically prefer people to have full-time employment. But you could still be eligible for some cards if you work part-time or casually, are self-employed, are a student or if you have a pension. Usually, you'll just be asked for supporting documentation that's specific to your situation.
- Income vs expenses. When you apply for a credit card, you will have to provide information about your current income, spending habits and existing debts or financial responsibilities. These details help issuers determine your eligibility and can include details of regular household bills, loan repayments or even buy now pay later accounts.
If you're unsure if you'll be approved, contact the bank beforehand to discuss your options and don't risk applying for the card if you think you'll be declined.
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