Yes, you can get a credit card while on Centrelink — even if you’re unemployed — as long as you meet the provider’s eligibility criteria.
Should you get a credit card on Centrelink?
A credit card can be a powerful way to demonstrate smart money management skills to future lenders when used responsibly. However, overspending can lead to credit card debt that takes years to pay off.
Everyone should be wary of the temptations of a credit card, but this is especially true if you’re in between jobs, unable to work as much as you would like or are navigating changing circumstances at home.
Types of credit cards worth considering if you’re on Centrelink
If you choose to get a credit card, focus on options suitable for beginners. For example, look for entry-level cards with minimal application requirements, which the Big Four and many smaller banks offer.
Other types of credit cards to consider include:
- Interest-free and zero-interest credit cards
- Low-interest credit cards
- Student-friendly credit cards
- Options available for applicants with bad credit.
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Aim for a credit card with a low minimum credit limit, for example, $500 to $1,000. Then, plan to pay off the balance in full to avoid interest charges.
Understanding eligibility requirements
Eligibility requirements vary across credit card companies, but approvals and limits depend on an individual’s income. Fortunately, banks and credit card companies view ‘income’ beyond just the salary.
Eligible income also includes any type of government payment. So, you may be approved for a credit card if you’re on benefits, such as JobSeeker or another Centrelink for carers, families, older Australians, people with disabilities, students, and rural residents. Some of these programs include:
- Carers allowance
- Parental leave pay
- Parenting payment
- Single income family supplement
- Youth allowance
- Mobility allowance.
How to use Centrelink payments as proof of income
Check with your specific bank to make sure they accept Centrelink as a form of income, as each lender’s eligibility requirements will differ. Assuming they do, the following steps depend on whether or not you’re also employed.
Banks need to see regular money coming into your bank. The more streams of income, the better. Check with your bank to see what documents they require. For example:
- Westpac requires applicants to submit a Government letter or Centrelink statement providing details of eligible benefits.
- NAB asks for your most recent bank statement or list of transactions from the past 90 days — showing three months of consecutive allowance payments. They also require a letter or statement from the government agency that’s made a payment in the past 90 days.
Employed applicants with multiple income sources
If you are employed and receiving government support, prepare any evidence of recent payments – such as bank statements, list of transactions, and correspondence from the relevant government agency. Recent payslips, bank statements and tax returns are the most commonly required documents.
» MORE: Types of employment in Australia
How to apply for a credit card on Centrelink
Applying for a credit card while on Centrelink is a fairly straightforward process. However, before you begin, see if you can increase your approval odds first. Start by:
- Assessing your debt. If needed, aim to reduce your expenses and debts, as your liabilities come into play when determining creditworthiness.
- Checking your credit score. Obtain a free credit report to see what the banks see. Then, take steps to build your score.
Once you feel confident enough to apply, take these steps:
- Shortlist two to three credit cards with a low fee, interest rate and minimum limit.
- Review the eligibility requirements and call each bank to discuss your situation and income type. Be explicit about the Centrelink payment you receive to find out what counts as proof of income for the credit card. Remember that credit card applications and rejections impact your credit score.
- Prepare your Centrelink and additional income documents. Have them ready to submit during the application process.
- Lodge your application online at your chosen bank and wait for the outcome. Only apply for one credit card at a time — ideally, no more than one every six to 12 months.
Once you get your card, make sure you use your credit card responsibly.
Frequently asked questions about getting a credit card on Centrelink
You can apply for a credit card while on JobSeeker if you meet the eligibility criteria. While you won’t have a salary, you might have other forms of income through investments, real estate or superannuation to supplement your JobSeeker payments. There are also other types of government support beyond unemployment that banks might consider.
No single credit card or product category exists for people on Centrelink or government support. So, while a ‘Centrelink credit card’ doesn’t exist, that doesn’t mean you can’t qualify for certain types of credit cards while on Centrelink.