In order to apply for a credit card, you will need to meet several eligibility criteria conditions, including the following:
- Over 18 years of age
- A New Zealand citizen or permanent resident
- Not bankrupt
- Earning enough to repay the maximum credit limit on that card
- Relatively good credit rating
The income requirement is needed so that the bank knows you have enough income to pay off the credit card you are applying for. The minimum income you need to earn in order to be eligible can be anything from $10,000/year or $100,000/year, depending on your choice of bank and choice of card.
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Eligibility for a credit card also includes satisfying the bank that your financial position is secure. The purpose of this is to reassure the bank that you have sufficient income to pay back the credit they lend you. The bank needs to know that you fulfil the following criteria for financial position:
- Earning enough income – proof includes bank statements or payslips
- Steady job – proof includes employment details, such as length of employment and the contact number for your boss
- Own some assets – financial assets include your car, home, investments, and other possessions (e.g. computer, bicycle)
- Expenses and liabilities are not too big – proof includes statements for any outstanding debts and loans you owe, and the bank also wants a figure for your monthly expenses including rent, groceries, fuel, insurance, etc.
- Credit rating – your credit rating should be good, with no black marks on your credit report
When you are planning to apply for a credit card, it is very important that you know you can meet these eligibility criteria beforehand. This is because if you apply for a credit card but you are not eligible and you are rejected, this is a black mark on your credit history report. This would make it more difficult to be approved when you apply for future credit cards or loans (see above regarding your credit rating).
You may also want to consider whether a debit card attached to a transaction account may fill your needs just as well as a credit card – without the financial risk of overspending up to your credit limit.
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