A guide to credit cards for people with bad credit in 2025
There are many reasons why a low credit score can affect your financial situation. Whether it's late payments, credit card debt or frequent loan applications, these factors can lower your credit score. This article will give you a detailed introduction to credit card options for Australians with bad credit in 2025 and provide practical strategies for rebuilding your credit.
What is bad credit?
In Australia, a credit score below 550 (Equifax score range 0-1200) is generally considered bad credit. This may be due to:
• A history of late payments
• Multiple credit inquiries
• Bankruptcy or debt agreement
• High credit utilisation
Key steps to rebuilding your credit
1.Get a credit report: Get one at AnnualCreditReport.com.au
2.Correct errors: Dispute inaccurate information in your credit report
3.Pay on time: Set up automatic payments to avoid missing payments
4.Reduce debt ratio: Keep credit card balances below 30% of the credit limit
Credit card options for people with bad credit in Australia
Secured credit cards
These credit cards require the cardholder to deposit a certain amount of money as a guarantee for the credit limit, which reduces the risk for banks or card issuers, so they are more willing to approve applications from people with bad credit. Common secured card issuers in the Australian market include:
St. George Bank Secured Credit Card
ANZ Secured Credit Card (available from some banks)
These cards generally report repayments to credit institutions, which is helpful for rebuilding credit records.
Retail store credit cards
Common retailers and large supermarkets in Australia (such as Woolworths and Coles) offer their own co-branded credit cards. These cards are often easier to obtain, but have lower credit limits and relatively high interest rates. Reasonable use and full repayment can help gradually improve your credit.
Prepaid credit cards
Prepaid cards do not require credit approval, for example:
Ansarada Prepaid MasterCard
Humm Prepaid Card
These cards are suitable for daily budget control and online shopping, but they cannot directly improve credit scores.
Credit Builder Loans in Australia
Some Australian financial institutions offer credit builder loans. The loan amount is deposited into a savings account, and your regular repayment records are reported to credit agencies, gradually improving your credit. Common agencies include:
Wisr Credit Builder Loan
SocietyOne Credit Builder.
Comparison of credit cards for people with bad credit in Australia
| Card type | Detailed description | Main providers | Annual fee (AUD) | Credit score required | Deposit requirement | Security and features | Remarks |
|---|---|---|---|---|---|---|---|
| Secured credit card | A deposit is required to guarantee the credit limit | St. George Bank, ANZ, Westpac | 30-50 | Not high (can be for bad credit) | Proportionate to credit limit (e.g. $500-$1000) | Report to credit bureau to help rebuild credit | Suitable for people who are gradually rebuilding credit |
| Retailer credit card | For use by specific retailers | Woolworths, Coles, Big W | 0-50 | Lower | None | Higher interest rate, smaller credit limit | Use with caution and avoid high-interest debts |
| Prepaid credit card | Top up first and spend later | Ansarada, Humm | 0-40 | None | None | No credit risk, but no credit promotion | Suitable for budget management and online payment |
| Credit building loan product | Loan amount is deposited into a locked savings account | Wisr, SocietyOne | There may be a handling fee | Not high | None | Repayment history reported to credit bureau | Powerful tool to accelerate credit reconstruction |
Basic Strategies to Improve Your Credit
• Check and correct errors in your credit report regularly.
• Try to pay your bills on time, even if money is tight.
• Reduce your credit card utilization ratio (less than 30% is recommended).
• Prioritize paying off existing debts and reduce the number of past due dates.
• Consider adding a family member as an authorized user on their credit card (you need to trust them).
• Use a secured credit card responsibly for at least 6 months before applying for a new credit card.
• Avoid applying for multiple new cards in a short period of time.
Credit rebuilding methods without a credit card
If you can’t get a credit card, you can still rebuild your credit through the following methods:
Rent reporting services: such as CreditSimple can include rent payment records on your credit report
Utility bills: Some companies report on-time payment records
Credit building loans: such as the credit rebuilding loans offered by MoneyPlace
Buy now, pay later services: Afterpay, Zip, etc. (use in moderation)
The information provided in this article is current as of the date of publication. Please conduct your own research for more current information.