Bad Credit Credit Card Australia: What Are Your Options in 2026?

Quick Answer: Getting a credit card with bad credit in Australia is difficult for standard products but possible through secured credit cards or low-limit products with more flexible criteria. The danger is that high-interest credit cards with bad credit — often 24–28% p.a. — can deepen financial problems if not managed perfectly. If any defaults blocking your credit card application were listed unlawfully under the Privacy Act 1988, removing them professionally in 30–90 days opens access to competitive products at a fraction of the bad-credit rate.

Wanting a credit card when your credit file is damaged often comes from a practical place — you need something that's accepted for online purchases, travel bookings, or everyday convenience. This guide covers your real options and helps you avoid the products that look like a solution but aren't.

What Credit Card Issuers Check in Australia

All standard credit card applications trigger a full credit check through Equifax, Experian, or Illion. An active default — particularly a recent one — is a significant barrier. Some issuers have automatic rules that decline any application with an active default; others apply more discretionary assessment for borderline profiles.

The Secured Credit Card Option

A secured credit card requires you to deposit an amount (typically $200–$2,000) as security, which becomes your credit limit. You spend against the limit, repay it monthly, and your payment behaviour is reported to credit bureaus under CCR — which is the point. It's primarily a credit-rebuilding tool, not a convenient credit facility.

Key considerations: annual fees can be high relative to the low limit, interest rates are often 19–24% p.a., and the deposit is tied up for the duration. It's worth it only if the CCR reporting genuinely rebuilds your score over 12–24 months, which it does when used responsibly.

What to Avoid: High-Rate Credit Cards for Bad Credit

Some financial products marketed as "credit cards for bad credit" carry interest rates of 24–29% p.a. with annual fees, and monthly fees on top. On a $2,000 balance at 27% p.a., you pay approximately $540 per year in interest alone. Miss one payment and you've added another negative entry to the credit file you're trying to rebuild.

For Australians with bad credit looking to rebuild, there are safer options:

• Secured credit cards with reputable banks or credit unions
• Debit cards with credit card functionality (Visa/Mastercard debit)
• BNPL products (Afterpay) for day-to-day purchases — no credit check, no interest if paid on time
• Credit repair to restore access to mainstream products

Real Case Study: Ruby, Canberra — Wanted a Credit Card, Fixed Her Whole File Instead

Ruby, 31, a public servant from Canberra, wanted a credit card mainly for online purchases and work travel bookings. She'd been declined by two major banks. Her Equifax score was 518 due to a $550 default from a private health insurer — listed, she found out during her ACS assessment, three weeks after she'd lodged a complaint with the Private Health Insurance Ombudsman.

The timing made the listing a clear Credit Reporting Code breach — default listed during an active formal complaint. ACS challenged the listing.

The health insurer removed the default on day 37. Ruby's Equifax score moved from 518 to 681.

She applied for a standard credit card with a $3,000 limit through her bank. Approved within a week at 19.99% p.a. — the standard rate, not a bad-credit premium.

Result: Ruby's Equifax score moved from 518 to 681 in 37 days. Standard credit card approved. She also found that her improved file meant she pre-qualified for a personal loan at mainstream rates for a planned holiday — something she hadn't even been thinking about when she first contacted ACS. She paid only when we succeeded. Subject to individual assessment; results may vary.

Step-by-Step: Getting a Credit Card With Bad Credit

1. Pull your Equifax credit report — confirm exactly what card issuers will see
2. Get a free credit assessment — find out if any defaults have removal grounds
3. If removable, pursue credit repair first — 30–90 days and you'll have access to standard products
4. If not removable or urgent — consider a secured credit card from a reputable provider
5. Use the card responsibly — pay in full monthly, stay under 30% utilisation
6. Monitor your score — on-time payments build positive CCR history over 12–24 months

1. Get all three credit reports
2. Identify the negative entries
3. Request a free ACS assessment
4. If removal viable, pursue before applying
5. If not, apply for a secured or low-limit card

Frequently Asked Questions

Can I get a credit card in Australia with a default on my credit file? Standard credit cards from major banks are very difficult to obtain with an active default. Secured credit cards — where you deposit a set amount as security — are more accessible. Low-limit products from credit unions or second-tier lenders may also be possible. Professional removal of an unlawful default typically restores access to standard credit card products within days of removal.

What is the best credit card for bad credit in Australia? A secured credit card from a reputable bank or credit union is the safest credit-rebuilding tool — it reports repayment behaviour to credit bureaus under CCR, has a manageable limit tied to your deposit, and doesn't carry the risk of accumulating high-interest debt you can't repay. Avoid high-rate unsecured bad-credit cards with multiple fees.

Does applying for a credit card hurt my credit score in Australia? Yes — each credit card application creates a hard enquiry on your credit file, reducing your score by 5–30 points. The enquiry stays for 5 years. If you're declined and apply elsewhere, each additional application worsens your position. Get your credit file assessed first to understand why you're being declined before making further applications.

Will having a credit card help rebuild my credit score? Yes — if used responsibly. A credit card with on-time monthly payments, maintained below 30% utilisation, contributes positively to your CCR repayment history. This is one of the fastest legitimate ways to build a positive credit track record over 12–24 months.

How long after credit repair can I apply for a credit card? You can apply immediately after a default is successfully removed from your credit file — there's no mandatory waiting period. Once removed, card issuers see a file without the default and assess your application accordingly. Many ACS clients successfully apply for credit cards within days of receiving confirmation of removal.

Can a debit card be used instead of a credit card for most purposes? A Visa or Mastercard debit card linked to a transaction account works for almost all purposes where a credit card is accepted — online purchases, hotel bookings, travel, subscriptions. The key differences: you can't spend beyond your available balance (no overdraft risk), and debit card usage is not reported to credit bureaus (so it doesn't rebuild your credit score). It's a practical interim solution while your credit file is being repaired.

Fix the File — Then Unlock the Products

A free assessment from Australian Credit Solutions takes 24 hours and identifies whether any defaults on your credit file were listed unlawfully. Once removed, you're no longer choosing between bad-credit products — you have access to the same products everyone else does.

Australian Credit Solutions is ASIC-licensed (ACL 532003), lawyer-led by Principal Solicitor Elisa Rothschild, and has helped over 5,000 Australians clear their credit files since 2014. No Win No Fee. 98% success rate on accepted cases.

Get My Free Assessment → 📞 0489 265 737 🛡️ ASIC Licensed ACL 532003 | ⭐ 4.9/5 from 976+ Reviews | 🏆 Award Winner 2022–2024

Australian Credit Solutions Pty Ltd holds Australian Credit Licence ACL 532003. Credit repair services are subject to individual assessment. Results may vary. This article provides general information only and does not constitute legal or financial advice.

Related reading: How to Improve Your Credit Score → | Default Removal Services →

Verify ASIC licences at asic.gov.au. Free credit score tools available at equifax.com.au and experian.com.au. Credit information at moneysmart.gov.au.