Applying for a credit card only takes a few minutes, but there’s more to it than submitting your information. Present as someone capable of handling credit by preparing and improving your approval chances before you try to get a credit card.
Step-by-step guide to applying for a credit card
Before you start the application process, it’s crucial to have a clear understanding of the type of credit card you want. You’ll also want to consider your credit health and active card promotions.
Follow the below steps to apply for a credit card.
1. Check your credit score
Your credit score is a big factor in determining whether or not you can qualify for certain cards. The higher your score, the more trustworthy you appear to lenders, like the credit card companies that issue cards. Knowing your credit score before applying gives you a better idea of the cards you may get approved to use.
For example, if you have a bad credit score, you may not qualify for a traditional, unsecured card with lots of perks. Applying for these cards might lead to multiple hard credit inquiries and rejections, hurting your score. Instead, you may want to apply for a secured card, which doesn’t base eligibility on credit scores.
You can access a free credit report every three months from any or all of Australia’s three major credit reporting agencies: Equifax, Experian, and Illion. While it’s a sound financial practice to do this once or twice a year, it’s even more crucial if you’re applying for credit or focusing on increasing your score.
🤓 Nerdy Tip
To improve your credit score, make payments to any and all lines of credit on time, keep balances low on existing credit cards and avoid taking on new debt.
2. Check eligibility requirements
Look at any age, residency or income requirements before you apply. For example, some cards may require you to earn at least $100,000 annually.
Most banks and card issuers will require applicants to be:
- 18 years or older
- Receiving a regular income
- Having a verifiable income
- An Australian or New Zealand citizen or permanent resident.
Knowing the most basic requirements before you apply can save you time and prevent unnecessary damage to your credit score. Every time you apply for a credit card, your score takes a hit, so giving yourself the best shot at approval is essential.
3. Prepare your documents
When you apply, you’ll be asked similar questions no matter which company is issuing the card.
You’ll need to share confidential personal information to prove your identity and eligibility, such as a driver’s licence, bank statements or passport.
Get all your supporting documents together before you apply. These documents might include:
- Bank statements or payslips
- Employment details, such as job title and employer
- Most recent tax return
- Proof of current assets, such as a car and debts, such as a mortgage
- Proof of residency or Visa documents
- Examples of general living expenses, such as utility bills.
4. Complete the application
Each issuer has its own application process, but there are similarities. You can generally apply for a credit card online through the issuer’s website.
Either way, when you apply, you’re typically required to complete the following steps:
- Enter personal contact details, such as your legal name, address and email
- Enter employment and income details (if you’re self-employed, you may need to provide your accountant’s phone number)
- Enter information on your current spending habits and debt
- Review your application to ensure all of the information you provided is correct
- Select any additional card features
- Select your credit limit
- Upload any required documents, such as a copy of your ID or bank statements.
Then, submit your application.
You can also apply for a credit card at one of the issuer’s brick-and-mortar locations. Make sure to bring physical copies of all required paperwork with you.
🤓 Nerdy Tip
Apply for a credit limit that matches your needs. If you’re not confident you’ll get approved, select a lower limit first. The lower the limit, the higher your chances of approval. Once you’ve been a customer with a positive track record for some time, you can increase the limit.
5. Provide additional documents, if required
After you submit your application, you may receive conditional approval, meaning the lender needs additional information before issuing the credit card. For example, the missing information might be a bank statement or payslip to verify your income.
What happens after you apply for a credit card?
If your application is approved, the issuer will typically mail your new card within a week. Once it arrives, you need to activate the card. That can often be done online, via the mobile banking app or over the phone. Then, it’s up to you to use your card responsibly.
If your application is not approved, the issuer will inform you of their decision. You can apply for a free credit report from Equifax within 90 days of a declined application to see what factors may have impacted the decision.
Remember, though, that credit is only one factor in determining eligibility — your income, employment stability and spending habits also play into the decision-making process. Ideally, you want to wait several months before applying for another credit card, as multiple applications at one time can adversely impact your credit score.