While applying for a new credit card only takes a few minutes online, it does come with certain risks – including a declined application and a listing on your credit file. While making sure you meet the eligibility requirements is crucial, there are some other ways to improve your chances of approval when applying for a new credit card.
Use this guide's 10 tips to increase your chances of getting approved for a credit card, including what to do before you apply and submit your application, plus the mistakes to avoid when requesting a new credit card.
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How to prepare before you apply for a credit card
What you do before you apply for a credit card is actually more important than the act of filling out the application. This is because after you've applied for a card, the credit card issuer will look at your income, credit history and the documents you've provided in your application to determine whether you're a high- or low-risk applicant. Essentially, they're looking for signs that you have the ability to repay the money you borrow.
So while it may take only 15 minutes to complete the online form, getting your affairs in order so that you’re ready for the bank’s assessment of your application will take a bit more time and preparation. Check out these tips to get started.
Tip #1. Take your time
It’s never a good idea to rush into things and it is your right as a consumer to assess the bank before it assesses you. Don’t jump at the first credit card deal you see because that’s usually not going to be the right one for you. Instead, spend some time comparing your credit card options and doing your research so you can find a card that suits your financial needs.
Tip #2. Know your needs
There are many types of credit cards that suit different types of cardholders. Before you begin your search, think about what you want, need and can afford with your next credit card. For example, if you're studying and this the first credit card you're applying for, you might want to apply for a student credit card or a low-income credit card to ensure you meet the eligibility requirements. On the other hand, if you also want to keep your interest costs down, then you might decide to apply for a low rate credit card.
Even if you already use a credit card, it's worth taking this time to reconsider your goals. For example, if you're a regular spender who regularly repays their balance, you could get rewarded for your spending with a frequent flyer credit card. If you have some big ticket items in mind but want to keep your interest costs low, a 0% purchase rate credit card could come in handy. Otherwise, if you're struggling to repay an existing debt, a balance transfer credit card with a 0% promotional offer could help you get your finances in control. Whatever the case, getting specific about the type of card you want will help you find one that fits with your circumstances.
Tip #3: Compare your options
Once you've decided what type of card you want, it's time to begin comparing your options. You can use the reviews and tables on Finder to compare the following features so that you understand the costs and benefits associated with each card.
- Interest rates on purchases, cash advances and balance transfers
- Annual fees
- Interest-free periods
- Rewards programs including the partnered program, earn rates and how you can earn and redeem points
- Complimentary insurances including travel insurance, purchase protection and extended warranty cover
- Additional cardholders and whether they come with an additional fee
- Extra benefits such as concierge services and airline lounge passes that'll help you offset the costs of the card
Comparing your credit card options will help you narrow down your search and will ensure that you're selecting your next card based on an informed decision.
Tip #4: Check the eligibility requirements
You'll need to meet a set of eligibility requirements to be approved for any credit card you apply for. Make sure you confirm that you meet the eligibility criteria before you submit your application, as rejected credit card applications can have a negative impact on your credit score. In the Australian credit card market, the eligibility requirements usually include:
Credit card eligibility requirements
- Age. Cardholders must be at least 18 years of age.
- Minimum income. You'll need to meet a minimum annual income to apply, which can start at $15,000 p.a. for low-income credit cards and go up to $100,000 p.a. and beyond for higher income products.
- Residential status. Credit card issuers usually require you to be a permanent Australian resident or hold a specific visa to apply for a credit card.
- Good credit history. You'll need to have a good credit history with no defaults or evidence of bankruptcy to receive approval. See this guide for five ways to improve your credit rating.
There are specific eligibility requirements for every credit card, so make sure you know what these are and are confident you have met them before applying.
Tip #5: Check and improve your credit rating
Banks typically use a credit rating system when assessing your eligibility for the card and card limit in question. Based on your credit history, repayment habits and current credit lines, the lender will work out how much you can safely borrow. This information is available to lenders whenever you apply for any form of credit.
Your credit report is also available to you at any time. If you request a free copy of your credit history before you apply for a credit card, you'll be able to correct any possible errors on it and know exactly what the bank will see when they assess your application. If your credit report is less than ideal, it may be wise to delay your credit card application and spend some time improving your credit score to increase your chances of future card approval.
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Tip #6: Lower your credit utilisation ratio
If you already have a credit card balance, it’s wise to pay off your existing balances before submitting a new credit card application. This is because having a high debt utilisation ratio is a poor indication of credit-worthiness and reduces the likelihood of a successful application. To calculate your ratio, divide the total current balances on your cards by their total limits.
How to lower your utilisation ratio
For example, if the limits on your three cards are $5,000 each, and you have $4,000 balance on each of them, your ratio is $12,000/$15,000 = 80%. A healthy ratio is typically 30% or less. If you're struggling to repay your debts because of high-interest rates, consider consolidating your debt with a 0% balance transfer credit card.
What to remember during the credit card application process
Once you've done some research, found a credit card you like and checked that you meet the eligibility requirements, you can apply for your chosen credit card. When you're filling out your application, make sure you keep the following tips in mind:
Tip #7: Check your details
You'll be asked to provide a lot of information during your credit card application including addresses, contact numbers, referee details, current and previous employment, salary, outstanding debts and monthly expenses (just to name a few). While it might seem like a lot of information, it's important to fill it out correctly and read over it before submitting the application. Mistakes on your application could slow down the process or result in a declined application.
Tip #8: Organise the required documents
As well as eligibility requirements, you'll be required to provide a number of documents with your credit card application. Supporting documents you'll typically be asked for include your driver's licence, proof of residential status, recent payslips and tax return. Make sure you confirm what you need to provide before you start the application to ensure a swift and successful application.
Tip #9: State your actual income
This is no time to be modest or to exaggerate your income. Deflating your income may sabotage your application by reducing the bank’s opinion of your ability to finance a debt. So if you have multiple sources of income (such as from part-time employment, freelance jobs or government payments), make sure to include these details. Fabricating or inflating your income, on the other hand, is considered fraud and punishable by law.
How to apply for a credit card when you’re self-employed
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Mistakes to avoid when applying for a credit card
Aside from the tips to follow before and during your application, there is one common mistake people make after the application that you should avoid.
Tip #10: Don’t apply for multiple cards at once or within a short period
You may be tempted to apply for more than one credit card just in case your first one doesn’t get approved, but don’t. Each credit enquiry that a lender makes about your credit history is listed on your credit file for five years. If you apply for a lot of credit cards at once or within a few months, it could appear to lenders that you have a lot of debt, even if that isn’t true. This could leave you in a vicious cycle of applying for credit cards and not having them approved.
In fact, some banks will automatically reject your application if you’ve recently applied for a credit card. For example, Citi states in its terms and conditions that your application may not be approved if you’ve applied for and been accepted for another Citi offer in the prior nine months. Be aware that this may be the case for other lenders too.
Applying for a credit card is a relatively simple process and can take as little as 15 minutes. However, if you don't do your research beforehand, ensure you meet the eligibility requirements and prepare the necessary documents, you'll likely reduce your chances of approval.
Pictures: Shutterstock
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Sally McMullen is Finder's credit cards and frequent flyer editor by day and a music maven by night. Her byline can be spotted on Yahoo Finance, Dynamic Business, Financy and Mamamia as well as Music Feeds and Rolling Stone.
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Hi,
I have been discharged from bankruptcy for 2 years now. I have had a car loan for just over a year with no defaults. My partner and I are looking for a credit card for emergency expenses when we required. We are both low income earners and I also receive FTB from centrelink. We have been rejected by a couple of credit card applications a few months ago now.
Who can we contact to talk our situation through. Fiance broker etc? Im not really sure of the terminology of the finance field. I don’t want to speak to the banks directly. More so someone that can guide us in the right direction.
Thank you.
Hi Carissa,
Thanks for getting in touch with finder. I hope all is well with you. :)
You mentioned that you were discharged from bankruptcy. This guide helps you know how to repair your credit after bankruptcy.
As low income earners, you may want to explore your options here. On that page, you will see a table that allows you to conveniently compare your options. Once you found the right one for you, click on the “Go to site” green button to learn more or initiate your application.
To avoid getting rejected, before applying for a credit card, please review the criteria, details of the product and contact the bank directly to discuss your options and eligibility. It would also be helpful to review the criteria, details of the card.
A financial adviser or planner could help you. If you need a qualified professional who will assess your financial situation and give you advice, then speaking to an expert would be a wise decision. Read our guide entitled, How to find the best financial planner, to learn more.
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua
Hi. I just applied for Anz rewards black card today. After talking back and forth with the Anz consultant about converting my rewards points to Qantas frequent flyer points. She said this can be done. But after reading all the fine prints and on here. Anz rewards black card cannot be converted to Qantas points. My application is not approved yet as had to provide more info.
My questions are:
1. can I cancel the application as it is clearly miscommunicated to me and not what I am after.
2. what ramification does this cancellation have if I want apply for a credit card that suits at a later date
3. Does this affect my credit rating. If so, Should I just keep it for 12 months then cancel?
Thanks
Hi Jen, thanks for your inquiry.
1. You can cancel this application by contacting ANZ customer service. We would recommend asking for a record of your interaction with them, preferably by email.
2. The general rule is not applying for more than one credit card per 3 months.
3. Credit ratings take your loan applications into account. Whilst we cannot comment on exactly how much this affects your rating, we can say that banks see what you have applied for which may impact your chances of being approved if you apply too frequently.
It is possible that you could ask ANZ to shift your application to the ANZ Frequent Flyer black, which provides Qantas instead of Rewards points.
Best,
Jonathan
Hi
Is it best for me to change my license over to the state I have moved to before applying for a credit card?
Thanks
Hello Dane,
Thank you for your question.
It is not necessary for you to change your license. Most (if not all) creditors would weigh more the authenticity and correctness of your identification and the other documents.
Please take note that there are credit card companies that may request a proof of your residence. If this happens, you only need to provide them an updated paperwork for verification. Don’t forget to talk to your issuer if you need to move out in the future.
Hope this helps.
Cheers,
Jonathan
Hi, I have just accepted an international teaching position for 2 years and leave Perth in August. Is there any chance that an Australian bank would give me a credit card based on my foreign employment contract for the 2 year period Aug 17-Aug 19? Obviously, it would be more difficult to obtain a credit card from a foreign bank in the country I’m moving to, so just wondering what my chances are here before I leave Australia?
Thanks.
Hi Hayley!
You can check our full guide on this page. :)
Most of the card issuers would require your passport, visa, proof of employment with at least 6 months remaining, and pay stub.
Kindly ensure you meet minimum eligibility requirements. You may click “Go to Site” green button of your chosen card to proceed with your application.
Hope this helps.
Cheers,
Jonathan
Hi Jonathon, thanks for your reply. My original post wasn’t very clear…
I am an Australian – born here and lived here all my life. I have accepted a teaching position in China for 2 years, so will be moving there in August. I was trying to find out if any of our Australian banks would even consider giving me a credit card, knowing that I’ll be out of the country for 2 years and working for a foreign company.
Thanks
Hi Hayley!
Thanks for getting back on us and clarifying your inquiry. We do appreciate that! :)
You may visit this page. This is our guide and list of card issuers that may approve you for your plans to use this card overseas.
Hope this helps.
Cheers,
Jonathan
I recently applied for ANZ credit card, what is the status on my credit car application?
Hi Selva,
Thanks for getting in touch.
Please note that you have come through to finder.com.au we are a financial comparison website and general information service and we do not represent any credit card company like ANZ.
As we don’t have access to your application, I’m afraid you may need to get in contact with ANZ directly to follow-up your application. For your convenience, I’ve forwarded to your email the phone number of ANZ.
I hope this has helped.
Cheers,
May
I recently applied Citibank signature and got rejected. It is not related to the credit rating though. And they just simply said have not met our credit criteria. Would like to apply for another card with different provider. Is it safe to apply or should I wait? How many is too many in a specific period of time?
Hi CorTan,
Thanks for your question and we’re sorry to hear about your rejected application.
You may not have met the eligibility requirements (such as income, credit score, provided necessary documents) when applying.
No, it’s not a good idea to apply for another credit card straight away as applying for multiple credit cards within a short period can reflect badly on your credit score and decrease your chances of approval in the future.
You should wait a few months before applying for another card. In the mean time, you can start comparing other credit cards and making a shortlist of cards you’re eligible for. Make sure to read all of the relevant product disclosure statements and contact the providers to discuss your chances of approval before applying.
I hope this has helped.
Cheers,
Sally
This is my ref no plz check the status and get back to me
Hi Vishal,
Please note that you have come through to finder.com.au, not a provider. As such, we’re unable to check the status of your application. You’ll need to contact your provider to confirm this information. If you can confirm the provider you’ve applied with, we may be able to guide you in the right direction.
I hope this has helped.
Cheers,
Sally
how is my credit card application progressing
Hi Sharon,
Thanks for your question.
Please note that you’ve come through finder.com.au, an online comparison service and is not directly affiliated with any bank.
Please see this page for information on how to check on your credit card application.
I hope this has helped.
Sharon
I got conditional aaproval for a coles mastercard, is this approved? I have sent through the paperwork they asked for. Just looking for clarification.
Hi Barb,
Generally if you have been conditionally approved, and the documentation you’ve sent in supports everything you’ve stated in your application, then your application should go through.
Cheers,
Shirley
How is my application progressing?
Hi Ernest. Thanks for your question. Please see this page for information on how to check on your credit card application. Jacob.