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Credit card options for applicants with bad credit

Want to apply for a credit card when you have a bad credit score? Here's what you need to know.

It’s challenging to get a credit card in New Zealand when you have a bad credit history. Typically, issuers only approve credit card applications if you have a good credit history.

While a bad credit score can harm your chances of getting a credit card in the short term, it is possible to improve your credit rating (and increase your chances of credit card approval) over time. Use this guide to learn more about your credit score and how it affects credit card applications. You can also compare other available credit options if you have bad credit.

What is my credit score?

Your credit score is based on the details recorded on your credit history file and helps determine your success in applying for credit. There is no standardised way of calculating credit scores, and the three major New Zealand credit bureaus, Equifax, Centrix and illion, use their own rating systems. Obtaining a copy of your credit score from one of these sources can help you figure out how likely (or unlikely) you are to receive approval when you apply for a credit card or other loan product.

What financial products can I get with bad credit?

While you may be looking for a credit card, it is difficult to receive approval if you have bad credit. Bad-credit rating credit cards and no-credit-check credit cards aren’t available in New Zealand, so you may need to consider some of the following options:

  • Low limit credit cards. If your credit score is weak, but you’re working to improve it, you could consider a card with a low minimum credit limit, which reduces the risk to the lender, and you may be more likely to receive approval. Once you prove that you can make repayments and are doing so regularly, you can choose to apply to increase your limit in the future.
  • Prepaid Travel Cards. Travel cards allow you to load them with your funds and may allow you to access perks due to your spending.
  • Debit cards. A sensible way to avoid debt is to steer away from credit and only spend the money you have. Debit cards are debt-proof and widely accepted as payment. However, using a debit card has zero effect on your credit report and cannot help you rebuild your credit rating.
  • Prepaid credit cards. Prepaid cards are similar to debit cards in the sense that you only spend the money you have. However, unlike a debit or credit card, you load funds onto the card before using it. These cards also don’t affect your credit rating but don’t charge interest, so they are an excellent way to improve your budgeting skills. Most prepaid cards are either Visa or Mastercard, so you should be able to use them in the same places you’d use a credit or debit card.
  • Bad credit payday loans. A cash or payday loan is typically between $300 and $2,000 for a period of 2 days to six months, but some providers may lend up to $5,000 and give you up to one year to repay it. Bad credit payday loans can be a quick answer to short-term money woes, and some lenders even skip the credit check as long as you’re employed. Repaying this loan on time can help rebuild your creditworthiness, but there may be high interest rates and fees for choosing this option.
  • Bad credit personal loans. Personal loans are traditionally used when borrowing a substantial amount of money and typically have a stricter approval process than payday loans. However, some bad credit personal loans on the market cater primarily for people with a poor credit rating. These loans usually come with a flat interest rate and can be used to rebuild your creditworthiness if you repay it responsibly.

Other options for Bad Credit

It could prove tricky to get a credit card with bad credit. However, you can consider comparing other options for bad credit borrowers.

The bottom line

Ultimately, a bad credit rating can have a significant impact on your financial options, making it difficult to get a credit card, car loan, or another form of credit. However, instead of looking for bad credit cards or no credit check options, you can improve your chances of approval by rebuilding your credit rating and managing money responsibly.

Compare all credit cards

Name Product Purchase Rate Annual fee Balance Transfer Rate
OFFER
Farmers Mastercard
25.95% p.a.
$50
0% p.a. for 15 months
0% on balance transfers for 15 months plus link your Farmers Club Card prior to transferring balances and get $200 worth of Farmers Club Vouchers. Offer is for new customers only and ends 30 September 2021.
Flight Centre Mastercard
22.95% p.a.
$50
N/A
Use your Flight Centre Mastercard for everyday shopping and earn rewards as you spend. Earn 2 Flight Centre rewards for every $100 spent at a Flight Centre Store and 1 reward point for standard purchases. Subject to lending criteria. Ts&Cs apply.
AIRPOINTS
American Express Airpoints Card
0% for 6 months (changes to 19.95% p.a.)
$0
N/A
Be rewarded with 50 bonus Airpoints Dollars. Simply apply, be approved, and spend $750 on your new Card in the first 3 months of membership. This offer is available to new Card Members only.
OFFER
American Express Platinum Edge Credit Card
2.99% for 6 months (changes to 19.95% p.a.)
$149
N/A
Enjoy a low rate on purchases and earn 20,000 Membership Rewards Bonus Points if you apply, are approved and spend $750 in the first 3 months of Card membership. This offer is available to new Card Members only.
AIRPOINTS
American Express Airpoints Platinum Card
19.95% p.a.
$195
N/A
Limited time offer: Be rewarded with 500 bonus Airpoints Dollars when you apply online by 27 September 2021 are approved, and spend $1,500 on your new Card within the first 3 months. This offer is available to new Card Members only. Ts&Cs apply. You will also earn 1 Airpoints Dollar for every $59 you spend on your card.
OFFER
American Express Platinum Card
N/A
$1,250
N/A
Get the new metal Platinum Card, 80,000 Membership Rewards bonus points, up to $300 dining credit and $200 to spend on travel each year. Offer available to new customers who apply online, are approved and spend at least $1,500 in the first 3 months. Exclusions, Ts&Cs apply.
LOW RATE
The Co-operative Bank Fair Rate Credit Card
12.95% p.a.
$20
0% p.a. for 6 months
0% p.a. on balance transfers for 6 months, plus benefit from a low rate of 12.95% on both purchases and cash advances.
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