Credit cards for immigrants

Recent immigrants can have a problem getting a credit card.  This is because there is not an adequate credit history for a standard credit card, which can mean that it can be harder to get a credit card, but there are solutions that are available to the recent arrival that needs to use a credit card.

Credit card lenders, like all other lenders, tend to rely on credit histories.  This is because credit card companies have found that the past record of how credit has been used is used is a very good indicator of future behavior with a credit card.  In this way the best interest rates, terms and conditions will tend to be given to people with good credit ratings.

This means that many people with no credit rating will find it hard to get a credit card or any other form of loan.  This is because credit histories do not tend to be shared across borders and so even if a person has a perfect credit history in another country then they will not be able to use that credit history in Australia.

Specialist credit cards are available to recent arrivals.  They are usually marketed in specialist media.  As they are aimed at people who in many cases have an incomplete credit record then the way in which the cards are handed out will not make it difficult for these people.

There are also open application cards that are available to a large number of people, no matter what their credit history.  These credit cards can have high interest rates and fees as well as having very low credit limits.  Although store cards do not tend to advertise themselves as being available to all applicants, in practice many store cards – particularly those that are given at the counter – will have laxer credit checking than other credit cards.  They do have high interest rates.  This can mean that a person with no credit history can then have a good score.

Secured credit cards are often sold as a way to build up a credit history.  These cards are backed by an asset, usually a savings bond that is kept with the bank that issued the credit card.  If the credit card user defaults then the bank can seize the asset in order to make good the loss.  This means that credit card issuers are relaxed about whom they give these cards to and as they report to credit bureaus they can build up a credit history.