Applying for a credit card on the Age Pension

When your only source of income is the Age Pension – or any other Centrelink payment – applying for a credit card can be difficult, though not impossible. Applying for a credit card can be one way to organise your income, and there are many options available. But there are obstacles.

While your income is certainly one factor taken into account when you apply, it is just one of many.

If you have a good credit score, many lenders may be willing to offer you a card with a lower limit. Some even have cards specifically intended for low-income earners, though they are rarely advertised.

Should you apply for a credit card?

Before you even begin looking at different cards, ask yourself if a credit card is really what you need.

If you’re thinking of applying for a credit card in order to pay other debts, it is easy to fall into a debt spiral if you cannot make your repayments.

You can access free financial counselling through the National Debt Helpline by calling 1800 007 007 or visit if you’re facing financial difficulties.

On the other hand, if you’re confident you can make your repayments, a credit card can be a good way to manage emergency expenses. Regular repayments will also help boost your credit score.

Do your research before applying

Applying for a credit card and being rejected will negatively affect your credit score. You’re much better off taking the time to find the card that’s right, rather than applying to a bunch of different lenders and hoping one accepts.

One way to improve your chances of being accepted on a low income is to request a lower limit. Some cards offer credit limits as low as $500. Having a low-limit card is also a good way to keep your debt at manageable levels.

Something to keep in mind when researching a credit card is the product’s Target Market Determination (TMD).

As part of legislation that came into effect last year, financial institutions must now publish a document for most financial products they offer explaining who the product is suitable for.

A TMD will include information on who is likely to buy the product, their income and ability to meet their financial obligations and endure financial losses. If you don’t have a similar financial situation to the card’s TMD, you are much less likely to be accepted.

What type of credit card should you apply for?

There are two kinds of credit cards that are best suited to someone living on a Centrelink payment – low interest cards and interest-free cards.

Low-interest credit cards

A credit card with a low interest rate can help keep repayments manageable. If you don’t plan on paying off your card in full each month, it makes sense to minimise the amount that debt is costing you.

Generally speaking, credit cards with interest rates lower than approximately 15 per cent are considered ‘low interest’.

Make sure to check that a low interest rate credit card doesn’t come with high annual fees, which just adds to the card cost.

Interest-free credit cards

An interest-free credit card may sound too good to be true, but such cards do exist. Rather than lending you free money, interest-free simply charge you a flat monthly fee along with your repayments.

Interest-free cards can be easier to budget for if you are living on the Age Pension, as you have a more solid idea of what you’ll owe. If you plan on paying your outstanding balance in full each month, then some cards even waive the monthly fee altogether.

However, if you have a low credit limit, the monthly fee can work out to be much the same as paying a high rate of interest.

Do you manage your finances with the use of a credit card? What tips can you offer? Why not share them in the comments section below?

Read: How phones have replaced cash, credit and loyalty cards

Brad Lockyer
Brad Lockyer
Brad has deep knowledge of retirement income, including Age Pension and other government entitlements, as well as health, money and lifestyle issues facing older Australians. Keen interests in current affairs, politics, sport and entertainment. Digital media professional with more than 10 years experience in the industry.


  1. Good luck with that! About 5 years ago we wanted to access a second credit card in case something happened to our current card. With substantial cash and equity and a pension from our SMSF we were rejected each time we applied ( 3 times)!

  2. As Marg says, good luck. Most likely it will be a waste of time and effort.

    I applied twice, once for a Qantas Credit Card (managed by Citibank for QF) and the other for an American Express card. Both rejected.

    With Amex, my income was just shy of the amount they wanted, but I had been a good customer (gold card holder) in the past, and could easily service the payments each month. I decided to fight them and wrote a letter justifying why I should get the card. In the end they gave it to me. About 12 months later they wrote and offered me a better card (more points etc, but higher fee) but with same spending limit as previous card. I was fine with that. 5 years later and I have never missed a monthly payment, and all is well. I also have a Woolworths Visa card, but only use that when a place won’t take Amex. The woolies card is very inferior, but the chances of being able to replace it with a better Visa card are almost impossible I fear.

  3. When WooIies recently stopped their credit card I didn’t want to take up the offer of a Macquarie card as they don’t offer Qantas FF points.
    I applied to my bank (St George) for a Qantas credit card and was knocked back as my income wasn’t high enough (notwithstanding a near 7 figure superannuation amount) after some “discussion” with the bank they agreed that if my income was higher I would get the card; answer – download a Centrelink statement (on-line) showing income to be $7000 per month (a significant increase from my normal drawdown), print it off, send it to the bank and then immediately reverse my drawdown amount to where it was.
    Problem solved. Credit card approved. Stupid bank decision making!!!

  4. I’ll never have a credit card.
    I know that on my meagre age pension I can ‘save for a rainy day’ rather than rely on other funds and pay exorbitant interest rates.
    At least I receive interest on all my accounts. It may not be much, but it’s something.

  5. As self-funded retirees (no Government pension) I wondered what would happen if my husband died as I was attached, for some 30+ years, to his credit card. I had no card in my own name. The bank manager advised as the card was in my husband’s name it would die with him.
    The first time I applied I was rejected as I had no EMPLOYMENT income, despite receiving a pension from our own SMSF.
    As a member of National Seniors I decided, after talking with them, to try the credit card provider recommended by NS. Gave them every piece of information but was ultimately rejected. Then I played the discrimination card, we were wealthy and had a regular income from our SMSF. Within a few hours I was approved!!!

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