Bad credit credit cards

• Are you in financial distress? Talk to your current bank before applying for more credit. You can also call the National Debt Helpline on 1800 007 007.

Why it's risky to apply for a credit card if you have bad credit

Bad credit, such as late payments, defaults of bankruptcy, can indicate that you have trouble paying off debts. This increases the risk for credit card issuers, both financially and in regards to the governments strict responsible lending obligations.

Getting rejected for credit card also puts a negative mark on your credit report. This means that someone with bad credit who applies for a credit card before fixing their credit problems could end up with a lower credit score.

While 12.1 million Australians currently have a credit card, some have run into difficulties accessing this form of credit. Of those who have been denied, unsteady income (34%) is the top culprit, followed by having a bad credit score (27%) and having too much debt (23%).

4 steps to increase your chance of approval

Step 1: Pay off existing debt. If you've got a loan, outstanding bills or other credit card debt, start making regular repayments. If you're struggling, you could also request a hardship variation. When a lender checks your credit report, regular repayments towards your existing debt will be viewed positively.

Step 2: Start saving. We know it might be easier said than done, but having some savings in the bank shows lenders that you'll be able to repay your credit card in the future.

Step 3: Wait until you meet the eligibility criteria. Most credit cards list an income requirement for approval. If you don't meet that, your application will automatically be rejected. Look for cards with a low minimum-income requirement or wait til you're eligible for the card you want.

Step 4: Get help if you need it. If you're struggling financially, you can speak with a financial counsellor for free by calling 1800 007 007 or through the National Debt Helpline online chat service.

How do I check my credit score?

It's always a good idea to check your credit score before applying for a loan or credit card. You might not even be aware that you have bad credit until you check.

Once you've got your credit score, you can see if there are any issues and take steps to address them. You might even find there's a mistake in the report, such as a debt that doesn't belong to you.

You can get these errors fixed and improve your credit score. But you won't know about them until you check.

You can also check out Finder's DIY credit repair guide for more help.

You can check your credit score for free through Finder at the link below.

Get your free credit report and credit score

Bad credit alternatives to credit cards

There are no specific credit cards for people with bad credit. That's part of why it's hard to get approved for a card as a borrower with bad credit.

A better option might be other forms of credit, like a short-term loan or a bad credit personal loan. These products are often designed for borrowers with bad credit.

• Short-term loans. This is a loan of up to $2,000 that has to be repaid between 16 days and 1 year, but usually terms are around 62 days. Keep in mind these loans come with high fees (a 20% establishment fee and a 4% monthly fee) so really consider how much you need it before you apply.
• Bad credit personal loans. If you're in need of a larger amount than a short-term loan offers, there are some bad credit personal loans available that can offer amounts up to $5,000 or even $10,000. These loans usually come with a flat interest rate and, if you repay responsibly, can be used to rebuild your creditworthiness.
• Low-limit credit cards. If you have bad credit and you're working to improve it, consider a card with a low minimum credit limit. This reduces the risk to the lender and you may be more likely to get approved. Once you prove that you can make repayments and are doing so regularly, you can choose to apply to increase your limit in the future.

Frequently asked questions

• What if there's a mistake on my credit report?

  If you think there is an error on your credit report, you can request a correction. You just have to contact the credit bureau directly, usually by filling out a simple form online.

• Are there any banks that don't check your credit?

  No. Australia has strict lending rules that dictate that every lender must assess your suitability for a credit card. This includes your credit history, assets, liabilities, income and other financial measures.

• Can Centrelink debt hurt my credit score?

  No. According to Services Australia, Centrelink debts do not affect your credit score.

Written by

Amy Bradney-George

Journalist

Amy is an experienced journalist with over 16 years of experience, contributing to major publications like Money Magazine, The Sydney Morning Herald, and ABC News Australia. Specialising in personal finance, she frequently appeared in media outlets and on radio. Amy holds a Bachelor of Arts in Journalism and Drama from Griffith University and earned RG146 certifications in Tier 1 Generic Knowledge and Tier 2 General Advice Deposit Products, ensuring her expertise is grounded in current financial regulations. Amy was Finder's Senior Writer for Credit Cards from 2016 to 2024. See full bio

Amy's expertise

Amy has written 531 Finder guides across topics including:

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Co-written by

Richard Whitten

Money Editor

Richard Whitten is Finder’s Money Editor, with over seven years of experience in home loans, property and personal finance. His insights appear in top media outlets like Yahoo Finance, Money Magazine, and the Herald Sun, and he frequently offers expert commentary on television and radio, helping Australians navigate mortgages and property ownership. Richard holds multiple industry certifications, including a Certificate IV in Mortgage Broking (RG 206) and Tier 1 and Tier 2 certifications (RG 146), as well as a Graduate Certificate in Communications from Deakin University. See full bio

Richard's expertise

Richard has written 629 Finder guides across topics including:

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