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Getting an Australian credit card
Getting a credit card is easy in the UK after all, were a country with a high level of personal debt. But is the process as straightforward in Australia? Hannah Lindon finds out
Even in the UK, the process of getting a credit card can be strangely involved. It tends to vary from bank to bank the branch at the top of the high street might tell you gravely that your credit record isn't good enough to secure a card with them, while the branch at the bottom will welcome you with open arms.
In Australia, a country where most British migrants don't even have a credit record, the whole thing is even more complex. It's generally more difficult to get credit Down Under, and most banks and loan companies will perform stringent employment and credit checks. To avoid the problems most Australian banks will have obtaining a copy of your credit record from your British bank, it may be advisable to open your credit card with an organisation which has branches in both Australia and the UK. "Because we have a UK banking network, we are able to obtain with the client's consent a copy of their credit file," says Stuart Wallis of the National Australia Bank's UK migrant banking team. "We are then able to perform the necessary checks which will enable them to be granted a credit card." As Wallis explains, the process can be started while still in the UK. "There is one very important criterion that a migrant must meet in order to be approved for a credit card," he says. "They must have a job in Australia pre-approved. We will then be able to pre-approve them for a credit card."
Because of the more stringent regulations in Australia, anybody applying for a credit card must be able to prove a continuous and reliable source of income. It isn't enough to show that you have a large lumpsum to fall back on or that you are in the final stage of an interview process it is necessary to produce an employment contract. For the lucky ones who have employment in Australia lined up, the process of obtaining your credit card is reasonably easy. "We can arrange to supply a client with a credit card before they leave for Australia, provided they have a job offer out there," says Wallis. "Initially, we would open a regular National Australian bank account for them. Once that has been opened, we would allocate them a personal banker who can guide them through the process. "The onus is on the client to arrange a meeting with their personal banker before leaving for Australia. This meeting is necessary to activate the day-to-day bank account."
Once your regular account is activated, an international bank like the National Australia Bank will then be able to send your credit card either to your local branch or to the main branch in the city where you will arrive. If, on the other hand, you haven't yet received a job offer from Australia, you will need to wait until you are in full-time employment to apply for a credit card. You must then either obtain a copy of your credit record to show to your local bank, or apply to an international bank who will be able to access your record remotely.
In general, the rules governing credit card use in Australia are reasonably similar to those in the UK. "In both countries, everything is regulated by the Financial Services Authority (FSA)," explains Wallis. "The other similarity is that, if you pay your credit balance in full, you are not required to pay any interest. "On the other hand, there are also some major differences between the two systems. It's much harder to get a credit card in Australia, and you'll usually find that your bank will conduct stringent employment and salary checks on you." There is also another important difference, as Wallis points out.
"There is no such thing as free banking in Australia. In the UK, there is a basic free banking service and you will only pay extra for a premier service level. In Australia, you choose a package based on your standard pattern, and you will be charged accordingly. "Depending on the account you open, you will have a certain number of free transactions every month. Beyond this, you will pay transactional fees. You may also pay a fee for using an ATM."
A charge also applies to credit cards. Whether or not you use your card, you may end up paying an annual ownership fee of approximately AUS$90 per year. "Credit cards in Australia are only free when linked to a home loan package," says Wallis. "If the card is linked to your mortgage, it is likely that your bank will not charge you for it." In spite of the bank charges, however, you may find that you end up paying less for your credit card in Australia than you would in the UK. "There are some very competitive packages," Wallis explains. APRs In Australia are typically lower, although it does alter on a case-by-case basis.
For further information, contact the National Australia Bank
Typical interest rates
The National Australia Bank has a number of options available, including a Low Rate Visa card with 11.24 per cent on purchases and a Velocity card which earns you points towards international flights.
The Commonwealth Bank of Australia offers a rate of 11.49 per cent on its low rate credit card, and also has a low annual fee (AUS$24) credit card available.
The Australian bank BankWest offer the BankWest Lite MasterCard, which has an interest rate of 9.49 per cent and a AUS$49 annual fee.
The Australia and New Zealand Banking Group offer the ANZ Low Rate MasterCard, with an interest rate of 12.49 per cent on cash purchases and 17.49 per cent on cash advances. You can also choose your own card image!
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