Improve your chances of getting a new credit card with these handy tips.
Whether it’s your first or fiftieth time applying for a credit card, the application process can be unpredictable and overwhelming. If you’re considering getting a new card, it’s useful to get guidance on how to apply and the information you’ll need to provide. If it’s been a long time since you submitted an application, or if your last application was declined, going over the foundations again can help improve your chances of success.
Whatever the case, this guide will provide you with steps to help get your application approved. We will also go through some common reasons your application might be declined and what to do after you have been declined so that you have a higher chance of success when you next apply.
Steps to help get your credit card application approved
While there is no guarantee that your credit card application will be approved, these steps are designed to help you get a positive outcome:
- Compare cards. Before applying, always research, analyse and compare available cards on the market. This will help you find a card that’s compatible with your personal circumstances. Credit card comparisons can also reduce the risk of making too many credit card applications, which can hurt your credit score.
- Check the eligibility criteria. While researching your options, it’s important to consider the eligibility requirements for each credit card. These criteria vary but typically include a minimum age of 18, residency requirements and minimum income or employment. Make sure that you meet all the requirements for a card before applying, since failing to do so will naturally result in rejection.
- Gather supporting documentation. Doing this prior to your application helps speed up the process, since you’ll then be ready to submit all the necessary documents along with your application. Such documentation can include payslips, bank statements, tax receipts and proof of assets.
- Provide as much detail as possible on the application. When filling out your application, try not to leave any blank fields. Instead, provide as much relevant information as you can, including contact information and exact figures where applicable.
- Choose a responsible credit limit. In general, your chances of approval will be higher when you request a modest credit limit. Asking for a high credit limit that’s beyond your financial ability wouldn’t be looked upon favourably by the credit card issuer. Alternatively, you could opt to have the issuer assign a limit for you, which they will do based on the details you provide. You can also increase your credit limit later on, after using the card for a time and establishing a responsible repayment history.
- Review your application. Double-check your application before submitting it and avoid making errors, as it will delay the application and verification process.
- Upload or submit any requested documents. You will find the document upload function particularly easy with online applications. In any case, most card providers will request that you submit the relevant documents after your initial application. The sooner you provide these documents, the sooner your application can be approved.
If you apply for a credit card online, most issuers will provide you with an “instant response”. This notification comes moments after you complete and submit the application form, so you should know then if you’ve been approved. In some cases, the issuer will require more information (such as your supporting documentation) before the application process can be completed and full approval is granted. By following these steps, you can ensure all aspects of your application are covered, which will also improve your chances of approval.
Why might my credit card application be rejected?
If you’re worried that your application may be declined, here are some of the most common situations that lead to rejection and the possible ways to address them:
- Lack of income. Most credit cards stipulate a minimum income requirement, with even low income credit cards requiring that you earn at least $15,000 annually. If you’re currently unemployed, it might be wise to put off applying for a new card until you’ve settled into a stable job, so as to avoid likely rejection. Otherwise, you could also consider loans for the unemployed.
- A new job or job instability. If you’re transitioning between jobs or entering a new career, it can be hard to provide the payslips that credit card providers may require as supporting documentation for your application. In this case, you could call the provider to discuss your personal circumstances, or wait a few months until you have the necessary documentation to prove a stable income.
Default accounts. Having default listings on your credit file can be damaging to your credit card application. Unfortunately, there is no quick way around this. You may wish to start working on removing the black marks and defaults from your credit file, or consider other credit options if necessary.
Compare other credit options if you have a bad credit rating
- Too many credit enquiries. Every time you apply for a credit card (or any other form of credit), a credit enquiry is recorded on your credit file and remains there for five years. Too many of these enquiries in a short amount of time can have a negative impact on your credit rating. While there’s no way to remove credit enquiries from your file, these listings tend to hold less weight the longer they are there. For example, credit issuers are more likely to be forgiving about credit enquiries made a few years ago than ones made a month ago.
- Limited credit history. This can be a problem if you’re just starting out at work, or if you’ve just moved countries. Fortunately, you can do something about this by actively building good credit. Begin by establishing small credit accounts such as phone or utility accounts. Make sure you pay these in full and on time to help establish yourself as a reliable borrower.
Residency status. Unfortunately some credit cards require that card applicants be Australian citizens or permanent residents. There are also a limited number of cards that cater to visa-holders. You should seek out the right credit card for your residential status before applying.
Compare credit cards for temporary residents
When it comes to applying for a new credit card, the most important work lies in research and comparison. Make sure you choose the most suitable card for your personal needs and that you meet the relevant eligibility requirements. Be sure to prepare all necessary documentation to submit alongside your detailed application, as this will ensure you are approved as quickly as possible.
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