The best credit card for your needs will depend on your own individual circumstances, including your spending habits and how you will pay off your credit card balance. The features and costs of individual credit card products can vary significantly, depending on the issuer’s rules (the lender or bank where you signed up for the card), the type of card, and the network the card uses. In Australia, the three main credit card networks are Visa, Mastercard and American Express (AMEX).
There are five main types of credit cards in Australia:
1. Low fee Credit CardsA low fee credit card charges low or no ongoing fees (annual fees or monthly fees). Low fee cards typically come with fewer bells and whistles, like rewards programs or complimentary insurances.
2. Low Rate Credit CardsA low rate credit card offers a low interest rate. Some credit cards charge no interest, either for a limited time or for the life of the card.
3. Rewards Credit CardsA rewards credit card offers a rewards program, such as the ability to earn rewards points, cashback or shopping vouchers.
4. Frequent Flyer Credit CardsA frequent flyer credit card allows you to earn frequent flyer points, such as Qantas points or Velocity points, on everyday eligible spending.
5. Balance Transfer Credit CardsA balance transfer is when you transfer your existing credit card balance onto a new card. Credit cards may he 0% balance transfer offers, where you are charged no interest on your transferred balance for a limited time. At the end of the offer period, the interest rate reverts to a higher rate.
To work out what credit card best suits your needs and circumstances, questions to consider could include:
Why do you need a credit card? Will you realistically pay it off each month? Will any frequent flyer points or other rewards on offer justify the cost? If you want to pay off debt using a card with a balance transfer offer, will you be able to pay it off within the offer period?If you think you won’t pay off the full balance each month, you might want to look for a ‘no-frills’ card with a low interest rate and low fees. If you only intend to use the card in emergencies and will pay off your balance in full, you may choose to look for a no annual fee card. If you’re intending to pay off debt, you might want a card with a long 0% balance transfer offer and low revert rate in case you don’t repay your balance in time.
Also think about whether you need a credit card in the first place or whether you’d be better off sticking with a debit card, which allows you to use your sings when making payments. Using a credit card means that you are borrowing money from a financial institution, and you could be charged interest on that debt.
Explore further→ How do credit cards work?You can use the table at the top of this page to compare different types of credit cards from our Online Partners and their Star Rating, as well as other features such as:
Low rate Low fee Rewards Frequent Flyer Balance Transfers Overseas trel