Credit Cards

A credit card is a line of credit which allows you to spend a certain amount of money even if you don’t have that money in your personal bank account. You will have to repay this money plus a rate of interest.

A rate of interest or “interest” is an amount charged on top of the original amount you spent on your credit card. This amount will continue to increase if you do not repay what you spent. There may be additional fees if you do not repay the monthly minimum amounts.

To be eligible for a credit card in Australia you must be 18, have a good credit rating and be an Australian resident.

A credit rating is a record of whether or not you have paid things back. If you fail to pay fines or an account like an electricity bill (even a previous credit card) it can have an impact on your credit rating. A negative credit rating may impact your ability to obtain a loan, mortgage and even a mobile phone plan in the future.

You should consider very carefully whether you need a credit card. Only get a credit card if you know that you are able to pay the amount that you have spent plus the interest within the time specified by the bank.

Remember, just because you are offered a credit card, it does not mean you can afford it.

If you get into financial trouble and cannot make the required payments on your credit card you should talk to the bank and seek financial counselling immediately. Usually if you talk to the bank you may be able to come to an arrangement that will allow you to repay it at an affordable rate – just don’t leave it too long.

If you intend to travel overseas and use your credit card you should notify your bank or financial institution in advance so they do not freeze your account. They may suspect fraud if transactions appear from another country.

If you lose your credit card you should notify your bank and the police immediately.

Tip: Emails that seem to be from your bank asking for your credit card details are often scams. If you have any doubt at all call your bank instead.

Check out this MoneySmart Rookie video produced by ASIC to find out how to avoid getting into trouble with credit. (Safe link to an external site)

Differences between states

Northern Territory

If you are struggling with paying your credit card, talk to your bank or get help from Anglicare NT or CatholicCare NT for advice and financial counselling to assist with budgeting and money management.

You can contact the Central Australian Women’s Legal Service for legal advice on credit and debt matters – phone 08 8952 4055 or 1800 684 055.

Depending on where you live, you could alternatively contact the Darwin Community Legal Service on 1800 812 953 or the Katherine Women’s Information and Legal Service on 1800 620 108.

ACT

If you are struggling with credit card debt you can get help from Care Financial Counselling Service or Salvation Army Moneycare – they might be able to help you communicate with your bank, and help you work out a payment arrangement.

Western Australia

Debt can put financial and personal pressure on a person or relationship.  If you are struggling with credit card debt, you may want to speak to a financial counsellor about how best to approach your financial problem and communicate with relevant financial services.

You can get advice from the Financial Counsellors’ Association of Western Australia by calling their helpline on 1800 007 007.  If you want to see a financial counsellor in person you need to make an appointment. The waiting period for an appointment is approximately two weeks.

You can also find a financial counsellor near you, using the Financial Counselling Australia website or ASIC’s MoneySmart website.

NSW

If you are struggling with credit card debt you can get help from the Credit and Debt Hotline operated by the Consumer Credit Legal Centre NSW on 1800 007 007- they might be able to help you communicate with your bank, and help you work out a payment arrangement.

Victoria

If you are struggling with paying your credit card, talk to your bank. You may also want to speak to a financial counsellor about how best to approach your financial problem and communicate with relevant financial services.

Find a financial counsellor near you, using the Financial Counselling Australia website or ASIC’s MoneySmart website.

You also might find some helpful information on the Victorian Government Money Help website.

You may also wish to contact the Financial Services Ombudsman.

South Australia

If you are struggling with paying your credit card, talk to your bank. You may also want to speak to a financial counsellor about how best to approach your financial problem and communicate with relevant financial services.

Find a financial counsellor near you, using the Financial Counselling Australia website or ASIC’s MoneySmart website.

Tasmania

If you are struggling with paying your credit card, talk to your bank or get help from Anglicare Financial Services – they might be able to help you communicate with your bank, and help you work out a payment arrangement.

Queensland

If you are struggling with paying your credit card, talk to your bank. You may also want to speak to a financial counsellor about how best to approach your financial problem and communicate with relevant financial services.

Find a financial counsellor near you, using the Financial Counselling Australia website or ASIC’s MoneySmart website.