What credit card is recommended for young professionals looking to create a credit history? I'm earning $40k and will only be using the card to buy my normal purchases and pay it off straight away. I'd imagine I'm after a card with low fees.
Cheers
Credit Card for New Earners Looking to Create a History?
JoJoker on 28/04/2016 - 18:24
Comments
That might have been true in the past under Australia's negative credit reporting system but it's changing. Under the new positive reporting system, OP has exactly the right idea.
It's hard to say how long it will take the loans officers at all the banks to catch up but in the future they'll all be very happy to see a long record of paying off small debts. They'll take this as better evidence of financial responsibility than a sum of money that probably came from your parents and says little about the borrower's habits.
Note: This is general advice.
There are credit cards available with no annual fees. I know that if you pay off the credit card straight away, you won't need to pay any interest.
When talking to the bank consultant, he said that it is better to have a long term saving account to prove that you are saving money. Paying off bills, credit cards, etc on time will also help build your credit history.Here's a list of low limit credit cards with low/no annual fee.
https://www.anz.com.au/personal/credit-cards/low-annual-fee/…
http://www.westpac.com.au/personal-banking/credit-cards/low-…
http://www.nab.com.au/personal/banking/credit-cards/nab-low-…
https://www.commbank.com.au/personal/credit-cards/low-rate/l…I've never understood the reason why people think getting a credit card will create a good history. (Genuinely interested)
I have two home loans and everytime I wanted to borrow, every credit card affected it (negatively - even having one or two and even if you have $0 balance on it, but a $30,000 limit, it counts as a $30,000 card…..)I'm not loan broker, but surely they care about your steady income and savings
my 2c
I've never understood the reason why people think getting a credit card will create a good history.
It's important in the US where recruiters, employers, and banks can look at credit history for jobs, loans, etc. Over here, less so.
Ah, I see. Wasn't aware the US was like that. Thanks!
Australia changed from exclusively negative credit reporting to American-style positive (and negative) credit reporting in March 2014. Under this system, credit bureaux keep a record of how much credit you used each month and whether you paid it off on time. (Other factors include how many enquiries you make and how long you've had your oldest line of credit.) An easy way to cultivate your score under this system is to use a small percentage of your available credit and always pay it off.
the laws allow credit bureaus to hold this information. They have to convince companies to provide the data to them though. I checked my credit history a month or so ago and there was nothing in there about all the stuff I pay on time.
You have been sweating on this for three years now.
https://www.ozbargain.com.au/node/97154#comment-1302457
Just apply for your card of choice and they will post it out to you. No damage done.
I would suggest either the 28 degrees as scotty mentioned 3 years ago or an amex to take advantage of the offers that get posted here.
I went back to study so I didnt have the income for a cc.
Commbank offer a student cc for free, but you'll probably only get a $400 limit.
But it is handy when it comes to things like phone payments that get direct debited and stuff.
When I was younger I asked a neighbour who was a bank manager about getting a "good credit rating" to buy a house and he said it was an American term that didn't apply in Aus.
He said here they look at bad credit rating ie didn't make your payments, defaults etc and borrowing potential ie how much you have and how much you earn how stable your income is etc.
I personally don't believe in credit history. Any bank or organisation will see a credit card as bad credit to the limit of the card even if you keep it paid off.
I never did this when I was younger (no credit history) and showed up to the bank with a nice bank deposit and was more than happy to give me a loan for my first house.