Applying to credit card as a contractor

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Hi CC churners,

I might switch job from a permenant position to become a contractor. Do you know how this impact CC application success? Any advice on how to keep being approved once a contractor?

Thanks!
 

Dr Ralph

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Hi CC churners,

I might switch job from a permenant position to become a contractor. Do you know how this impact CC application success? Any advice on how to keep being approved once a contractor?

Thanks!
PAYE income is favoured in your applications. Banks seem to understand this more easily than any other type of income. Maintain PAYE if at all possible.
 
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PAYE income is favoured in your applications. Banks seem to understand this more easily than any other type of income. Maintain PAYE if at all possible.
Thanks Dr.

Is PAYE equivalent to PAYG?
I understood that I can get PAYG for my upcoming contract, or I can set up my own company if I prefer, and invoice. If I pick the latter, can I still pay myself with PAYG?
 

RooFlyer

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As a contractor for 18 years, I never had any problem in getting credit cards. I churned a little.

From memory, I had to supply last (two?) statements from tax office and some other stuff ( maybe Tax returns) and always asked to give accountant’s details for the bank to contact but I don’t think any of them ever did.
 
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Matt_01

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I can set up my own company if I prefer, and invoice. If I pick the latter, can I still pay myself with PAYG?
In short, yes you can. You will also have to comply with the ATO reporting and payment requirements. It will all depend on how you structure your business.
 

Mattg

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I've generally been asked to prove my income by showing my notice of tax assessment from the ATO for the previous financial year. Haven't really had any issues with applying for credit cards so far.
 

RooFlyer

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I understood that I can get PAYG for my upcoming contract, or I can set up my own company if I prefer, and invoice. If I pick the latter, can I still pay myself with PAYG?

The way I operated my consulting company (I was the sole employee, Director and shareholder)

Company invoiced client; client paid. I paid company expenses out of company account. If I paid anything personally that was a company expense, it got put down as a loan to the company. I withdrew surplus funds from the company account as my salary - irregular in timing and amounts. Because I had only one client for the past 10 years, the 'Personal Services Income' test and rule applied (I'm retired now, so I forget what they actually were).

I suffered using MYOB for years before the accountant transferred me onto Xero. Bliss!!

In May each year, the accountant reviewed my Xero file to see that various hurdles would be met by the end of the FY. Then , at the end of the FY, the accountant waved their magic wand and all surplus funds from company was salary and company had nil tax liability.

There are surely more sophisticated ways to do it, especially if you have a spouse but the simplicity of the arrangement (endorsed by several accountants over the year) suited me its and important to remember that I was sole employee etc.
 
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That's it, I am a contractor :)
I now have to wear a suit and shave everyday :eek:

I hope to be able to get approved for 2 credit cards applications this year, and this is my situation:
- 1 year contract for Australian gov, can be extended for another 2 years
- paid through an agency that does payroll, ato, super etc... Essentially, I get what looks like a regular payslip except that it indicates my total number of hours worked and my hourly rate. And of course, if I don't work the same number of hours each fortnight, two consecutive payslip might look a bit different, which might impact applications approval, or not.

Do you guys think I will be approved for credit cards applications under those circumstances? I am concerned at what happens when I specify I have a fixed term contract (1 year). In addition, when applying, is my employer the contracting agency (that's the one who provides payslip, and pay me), or the Australian gov I am contracting for?
 

kamchatsky

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That's it, I am a contractor :)
I now have to wear a suit and shave everyday :eek:

I hope to be able to get approved for 2 credit cards applications this year, and this is my situation:
- 1 year contract for Australian gov, can be extended for another 2 years
- paid through an agency that does payroll, ato, super etc... Essentially, I get what looks like a regular payslip except that it indicates my total number of hours worked and my hourly rate. And of course, if I don't work the same number of hours each fortnight, two consecutive payslip might look a bit different, which might impact applications approval, or not.

Do you guys think I will be approved for credit cards applications under those circumstances? I am concerned at what happens when I specify I have a fixed term contract (1 year). In addition, when applying, is my employer the contracting agency (that's the one who provides payslip, and pay me), or the Australian gov I am contracting for?
I have been a PAYG contractor for more than 2 years, and have no issues applying about 8 credit cards in that period of time.
 

aerotravel

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I have given up on being full time employee many years ago and became a PAYG contractor via agency...
No issues with getting card approved. I recently got a mortgage as a contractor too.

So, yea...! No issues there.
 

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