Best Credit Cards

A credit card can be a useful tool to have when used responsibly, but different spenders will need different things from one. Our guide goes through different types of credit cards, interest rates, fees, repayments, benefits (like cash rewards) and more, so that you can better compare your options. Continue reading...

Most Popular Brands in Credit Cards

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BankWestMacquarie BankAmerican ExpressKogan MoneyLatitude FinancialColesCommonwealth BankVirgin MoneyWoolworths MoneyANZWestpacSt. George BankNABING DIRECThumm90HSBC
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114 listings
Latitude 28 Degrees Global Platinum Mastercard
No Annual Fee Credit Cards and Frequent Flyer & Travel Credit Cards

Latitude 28 Degrees Global Platinum Mastercard

3.8 from 1,795 reviews
Purchase Rate21.99% p.a.
Annual Fee$0.00 p.a.
Interest Free Period 55 days

One of the most popular travel cards in Australia, this card has no annual fee and no foreign transaction fees.

No Annual Fee
No International Transaction Fees
No Currency Conversion Fees
Reviewers complain about fees when paying off the card (e.g. $0.95 BPAY fee)
Website and app experience seen as sub-par
  • Transparency
    4.3 (1,071)
  • Customer Service
    4.2 (1,100)
  • Rates and Fees
    4.4 (1,113)
  • Rewards
    2.7 (208)
  • Online Experience
    4.2 (1,067)
  • Application Process
    4.5 (926)
  • Foreign Transaction Fee 0%
  • BenefitsNo Foreign Transaction Fee
  • Minimum Credit Limit $6,000.00
  • Contactless PaymentsApple Pay, Fitbit Pay, Garmin Pay, Google Pay and Samsung Pay
2nd Best Credit Card
Qantas American Express Discovery
No Annual Fee Credit Cards, Frequent Flyer & Travel Credit Cards, Balance Transfer Credit Cards and Rewards Credit Cards

Qantas American Express Discovery

4.1 from 56 reviews
Purchase Rate20.74% p.a.
Annual Fee$0.00 p.a.
Interest Free Period 44 days
No Annual Fee
No Points Earn Cap
0.75 point-per-dollar rate is reasonable for a $0-annual fee card
  • Transparency
    4.3 (40)
  • Customer Service
    4.5 (38)
  • Rates and Fees
    4.3 (36)
  • Rewards
    4.1 (35)
  • Online Experience
    4.3 (36)
  • Application Process
    4.5 (37)
  • BenefitsTravel Credit
  • Minimum Credit Limit $2,000.00
  • Maximum Credit Limit $100,000.00
  • Minimum Income $35,000.00
  • Rewards ProgramQantas Frequent Flyer
  • Points Earn Rate 0.75 points per $1
  • Contactless PaymentsApple Pay, Fitbit Pay, Google Pay and Samsung Pay
3rd Best Credit Card
Latitude Infinity Rewards Visa
No Annual Fee Credit Cards

Latitude Infinity Rewards Visa

4.0 from 64 reviews
Purchase Rate20.69% p.a.
Annual Fee$0.00 p.a.
Interest Free Period 55 days
$0 Annual Fee
Up to 55 days interest free
3% International Transaction Fees
$0.95 BPAY Fee
  • Transparency
    3.9 (51)
  • Customer Service
    3.9 (56)
  • Rates and Fees
    3.9 (51)
  • Rewards
    4.0 (44)
  • Online Experience
    3.7 (52)
  • Application Process
    4.1 (38)
  • Foreign Transaction Fee 3%
  • Contactless PaymentsApple Pay, Fitbit Pay, Garmin Pay, Google Pay and Samsung Pay
Qantas American Express Ultimate
Frequent Flyer & Travel Credit Cards, Balance Transfer Credit Cards and Rewards Credit Cards

Qantas American Express Ultimate

3.7 from 72 reviews
Purchase Rate20.74% p.a.
Annual Fee$450.00 p.a.
Interest Free Period 44 days

Sign-Up Bonus Points100,000

Regular Bonus Point Offers
High Points Earn Rate
Uncapped Annual Points Accrual
$450 annual Qantas Travel Credit
Two complimentary Qantas Lounge invitations
High Annual Fee ($450)
1% Balance Transfer Establishment Fee
$65,000 minimum income requirement
Reviewers commonly complain that AmEx is not accepted everywhere
  • Transparency
    4.0 (41)
  • Customer Service
    4.3 (43)
  • Rates and Fees
    3.3 (43)
  • Rewards
    4.3 (42)
  • Online Experience
    4.0 (41)
  • Application Process
    4.2 (44)
  • Foreign Transaction Fee 3%
  • BenefitsComplimentary Travel Insurance, Sign-Up Bonus Points Offer and Travel Credit
  • Minimum Credit Limit $3,000.00
  • Minimum Income $65,000.00
  • Rewards ProgramQantas Frequent Flyer
  • Points Earn Rate 1.25 points per $1
  • Contactless PaymentsApple Pay, Google Pay and Samsung Pay
Latitude Gem Visa
Low Rate Credit Cards

Latitude Gem Visa

3.3 from 1,066 reviews
Purchase Rate21.45% p.a.
Annual Fee$0.00 p.a.
Interest Free Period 55 days
6 Months Interest Free on purchases over $250 with participating retailers
Three 0% Interest Payment Plans to choose from
No Annual Fee
Monthly Account Service fee of $8.95, applied to balances of $10 or more
3% International Transaction Fee
Payment Handling Fees ($0.95 online, $2.50 in person)
High 21.45% p.a. Purchase Rate
  • Transparency
    3.5 (682)
  • Customer Service
    3.5 (704)
  • Rates and Fees
    3.3 (669)
  • Rewards
    2.5 (258)
  • Online Experience
    3.5 (653)
  • Application Process
    4.0 (603)
  • Foreign Transaction Fee 3%
  • Minimum Credit Limit $1,000.00
  • Introductory Rate 0% interest for 6 months on purchases over $250
  • Contactless PaymentsApple Pay, Fitbit Pay, Garmin Pay, Google Pay and Samsung Pay

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Super Funds Awards 2022!

A good super fund can make a substantial difference to the amount you retire with. From retail super funds to self managed super funds, view reviewer ratings for the top-rated super funds of 2022.

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What you need to know about store finance credit cards

A store credit card can help if you need to make an emergency purchase but you don’t have the money. Read on to learn how store credit cards work and discover what to watch out for.

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Credit Card Awards 2020

Whether it's the sign up bonus, rates and fees, or reliable customer service that you look for in a credit card, a credit card is often used everyday, so it's important you choose one that meets your needs and that you're happy with. These are the top-rated credit cards this year, as decided by ProductReview.com.au reviewers.

Wendy Z.
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Commonwealth Bank Low Fee
Low Rate Credit Cards and Balance Transfer Credit Cards

Commonwealth Bank Low Fee

3.9 from 46 reviews
Purchase Rate19.74% p.a.
Annual Fee$29.00 p.a.
Interest Free Period 55 days
$0 Annual Fee in the first year and waived in subsequent years when you spend $1,000 or more on purchases or cash advances in the previous year
Minimum credit limit of $500
3% International Transaction Fee
No attached rewards program
  • Transparency
    4.3 (37)
  • Customer Service
    4.2 (37)
  • Rates and Fees
    3.8 (37)
  • Rewards
    2.9 (13)
  • Online Experience
    4.3 (37)
  • Application Process
    4.3 (31)
  • Foreign Transaction Fee 3%
  • BenefitsReduced First Year Annual Fee
  • Minimum Credit Limit $500.00
  • Maximum Credit Limit $50,000.00
  • Minimum Income $15,000.00
  • Introductory Rate 0% p.a. for the first 15 months
  • Reduced First Year Annual Fee $0.00
  • Contactless PaymentsApple Pay, Fitbit Pay, Garmin Pay, Google Pay and Samsung Pay
Bankwest Zero Platinum MasterCard
No Annual Fee Credit Cards, Frequent Flyer & Travel Credit Cards and Balance Transfer Credit Cards

Bankwest Zero Platinum MasterCard

3.9 from 44 reviews
Purchase Rate17.99% p.a.
Annual Fee$0.00 p.a.
Interest Free Period 55 days
$0 Annual Fee
No Foreign Transaction Fees
Complimentary Overseas Travel Insurance
2.99% p.a. on Balance Transfers for the first 9 months
No attached rewards program
  • Transparency
    4.4 (31)
  • Customer Service
    3.9 (33)
  • Rates and Fees
    4.5 (30)
  • Rewards
    2.1 (10)
  • Online Experience
    4.1 (33)
  • Application Process
    4.3 (30)
  • Foreign Transaction Fee 0%
  • BenefitsComplimentary Travel Insurance and No Foreign Transaction Fee
  • Minimum Credit Limit $6,000.00
  • Maximum Credit Limit $50,000.00
  • Minimum Income $65,000.00
  • Contactless PaymentsApple Pay and Google Pay
Commonwealth Bank Awards
Balance Transfer Credit Cards and Rewards Credit Cards

Commonwealth Bank Awards

3.5 from 86 reviews
Purchase Rate20.24% p.a.
Annual Fee$59.00 p.a.
Interest Free Period 55 days
Entry-level credit limit of $500 minimum
Low $59 Annual Fee
High Balance Transfer Rate (5.99%)
Awards points earn rate capped at 50,000 per annum
  • Transparency
    4.0 (51)
  • Customer Service
    4.2 (50)
  • Rates and Fees
    3.6 (50)
  • Rewards
    3.9 (39)
  • Online Experience
    4.4 (48)
  • Application Process
    4.2 (39)
  • Foreign Transaction Fee 3%
  • Minimum Credit Limit $500.00
  • Rewards ProgramCommBank Awards
  • Points Earn Rate 1 points per $1
  • Contactless PaymentsApple Pay, Fitbit Pay, Garmin Pay, Google Pay and Samsung Pay
Westpac Low Rate
Low Rate Credit Cards and Balance Transfer Credit Cards

Westpac Low Rate

3.6 from 60 reviews
Purchase Rate13.74% p.a.
Annual Fee$59.00 p.a.
Interest Free Period 55 days
$400 Cashback with $1,000 minimum spend within 90 days of card approval
Low $59 Annual Fee & Low Interest Rate of 13.74% p.a. on purchases
One additional cardholder at no extra cost
0% p.a on Balance Transfers for 28 months
3% Foreign Transaction Fee
1% Balance Transfer Fee
  • Transparency
    4.0 (40)
  • Customer Service
    4.1 (41)
  • Rates and Fees
    3.7 (42)
  • Rewards
    3.4 (21)
  • Online Experience
    4.2 (37)
  • Application Process
    4.2 (37)
  • Foreign Transaction Fee 3%
  • BenefitsCashback Offer
  • Minimum Credit Limit $500.00
  • Maximum Credit Limit $25,000.00
  • Minimum Income $15,000.00
  • Contactless PaymentsFitbit Pay, Garmin Pay, Google Pay and Samsung Pay
Coles No Annual Fee MasterCard
No Annual Fee Credit Cards, Balance Transfer Credit Cards and Rewards Credit Cards

Coles No Annual Fee MasterCard

3.1 from 175 reviews
Purchase Rate19.99% p.a.
Annual Fee$0.00 p.a.
Interest Free Period 55 days

The Coles No Annual Fee Mastercard lets you collect Flybuys points when you make eligible purchases, and has up to 55 interest-free days and 0% p.a. on balance transfers for 12 months.

No annual fee
$10 off Coles supermarket shop at the checkout each time you redeem 2,000 flybuys points
Low flybuys points earn rate of 1 Flybuy Point per $2
Relatively high 19.99% interest rate
Reviewers mention poor customer service should an issue arise
  • Transparency
    3.6 (109)
  • Customer Service
    3.5 (112)
  • Rates and Fees
    4.1 (108)
  • Rewards
    3.8 (93)
  • Online Experience
    3.5 (107)
  • Application Process
    4.1 (94)
  • Foreign Transaction Fee 2.5%
  • Minimum Credit Limit $2,000.00
  • Maximum Credit Limit $60,000.00
  • Minimum Income $25,000.00
  • Rewards Programflybuys
  • Points Earn Rate 0.5 points per $1
  • Contactless PaymentsApple Pay and Samsung Pay
Commonwealth Bank Diamond Awards
Frequent Flyer & Travel Credit Cards and Rewards Credit Cards

Commonwealth Bank Diamond Awards

3.5 from 42 reviews
Purchase Rate20.24% p.a.
Annual Fee$349.00 p.a.
Interest Free Period 55 days

Sign-Up Bonus Points100,000

100,000 Bonus Points on offer
Earn 1.25 Awards Points per $1
International Travel Insurance included
Cashback offers with Mastercard Travelers Rewards
$349 Annual Fee
3% International Transaction Fee
Minimum Credit Limit of $15,000
  • Transparency
    3.9 (29)
  • Customer Service
    4.2 (31)
  • Rates and Fees
    3.2 (32)
  • Rewards
    3.3 (29)
  • Online Experience
    4.2 (30)
  • Application Process
    4.1 (24)
  • Foreign Transaction Fee 3%
  • BenefitsComplimentary Travel Insurance and Sign-Up Bonus Points Offer
  • Minimum Credit Limit $15,000.00
  • Maximum Credit Limit $50,000.00
  • Rewards ProgramCommBank Awards
  • Points Earn Rate 1.25 points per $1
  • Contactless PaymentsApple Pay, Fitbit Pay, Garmin Pay, Google Pay and Samsung Pay
GO MasterCard
No Annual Fee Credit Cards

GO MasterCard

2.8 from 1,151 reviews
Purchase Rate19.95% p.a.
Annual Fee$0.00 p.a.
Interest Free Period 55 days
0% interest for a set period with eligible partners
Three repayment options to choose from
$8.95 Monthly Fee when outstanding balance is greater than $10
High rate once the interest-free period ends (22.74%)
3% International Transaction Fee
  • Transparency
    3.4 (646)
  • Customer Service
    3.4 (666)
  • Rates and Fees
    3.2 (651)
  • Rewards
    2.6 (261)
  • Online Experience
    3.4 (596)
  • Application Process
    3.9 (563)
  • Foreign Transaction Fee 3%
  • Minimum Credit Limit $1,000.00
  • Maximum Credit Limit $25,000.00
  • Contactless PaymentsApple Pay, Fitbit Pay, Garmin Pay, Google Pay and Samsung Pay
Latitude Low Rate Mastercard
Low Rate Credit Cards

Latitude Low Rate Mastercard

3.2 from 43 reviews
Purchase Rate9.89% p.a.
Annual Fee$69.00 p.a.
Interest Free Period 55 days
$69 Annual Fee
Low Interest Rate of 9.89% on purchases & up to 55 days interest free
Price Protection (buy now and if the price drops within 30 days, the difference will be refunded)
Purchase Protection (if an eligible purchase is accidentally damaged or stolen within 90 days, Latitude Financial Services will help repair or replace it)
Extended Warranty (1 year extra warranty on eligible purchases that have an existing one-to-two-year manufacturer's warranty)
3% International Transaction Fee
Payment Handling Fees ($0.95 online including BPAY, $2.50 in person)
  • Transparency
    3.3 (40)
  • Customer Service
    3.1 (39)
  • Rates and Fees
    3.1 (38)
  • Rewards
    2.1 (15)
  • Online Experience
    3.1 (37)
  • Application Process
    3.5 (38)
  • Foreign Transaction Fee 3%
  • Contactless PaymentsApple Pay, Fitbit Pay, Garmin Pay, Google Pay and Samsung Pay
Westpac Altitude Platinum
Balance Transfer Credit Cards and Rewards Credit Cards

Westpac Altitude Platinum

 · includes 8 listings
3.3 from 41 reviews
Purchase Rate20.24 to 20.49% p.a.
Annual Fee$49.00 p.a., $150.00 p.a. and $200.00 p.a.

Sign-Up Bonus Points15,000 to 80,000

Uncapped points earn rate
Complimentary Insurance covers, including Overseas Travel, Purchase Security and Transit Accident Insurance
$150 Annual Fee (additional $50 if you choose Velocity or Qantas)
3% Foreign Transaction Fee
  • Transparency
    3.9 (19)
  • Customer Service
    3.9 (18)
  • Rates and Fees
    3.2 (20)
  • Rewards
    3.8 (16)
  • Online Experience
    3.6 (19)
  • Application Process
    4.1 (18)
  • Foreign Transaction Fee 3%
  • BenefitsComplimentary Travel Insurance, Sign-Up Bonus Points Offer and Reduced First Year Annual Fee
  • Minimum Credit Limit $3,000.00 to $6,000.00
  • Minimum Income $30,000.00
  • Rewards ProgramQantas Frequent Flyer, Velocity Frequent Flyer and Westpac Altitude Rewards
  • Points Earn Rate 0.5 to 2 points per $1
  • Reduced First Year Annual Fee $99.00 and $149.00
  • Contactless PaymentsGoogle Pay, Samsung Pay, Fitbit Pay and Garmin Pay
Virgin Money No Annual Fee Visa
No Annual Fee Credit Cards and Balance Transfer Credit Cards

Virgin Money No Annual Fee Visa

2.8 from 171 reviews
Purchase Rate18.99% p.a.
Annual Fee$0.00 p.a.
Interest Free Period 55 days
No Annual Fee
0% p.a. for 12 months on balance transfers
0% p.a. for 12 months on purchases
3.3% International Transaction Fee
You can't earn Velocity Points even though this card is issued by Virgin
Balance Transfer Rate at the end of the offer period reverts to the Cash Advance Rate of 20.99% p.a.
  • Transparency
    1.7 (23)
  • Customer Service
    1.7 (23)
  • Rates and Fees
    2.2 (19)
  • Rewards
    1.9 (14)
  • Online Experience
    1.8 (21)
  • Application Process
    2.2 (21)
  • Foreign Transaction Fee 3.3%
  • BenefitsIntroductory Interest Rate
  • Minimum Credit Limit $2,000.00
  • Minimum Income $25,000.00
  • Introductory Rate 0% p.a. for 12 months on purchases
  • Contactless PaymentsSamsung Pay

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How to get in front of credit card debt with a credit card balance transfer.

Credit card balance transfers are becoming an increasingly popular way for people with growing credit card debts to manage their finances. But are they really a magic bullet? We're going to look at the ins and outs of credit balance transfers, so you can find the best way to manage credit card debt and get your finances back in the black.

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Westpac Altitude Black
Balance Transfer Credit Cards and Rewards Credit Cards

Westpac Altitude Black

 · includes 6 listings
2.8 from 87 reviews
Purchase Rate20.24 to 20.49% p.a.
Annual Fee$199.00 p.a. and $250.00 p.a.

Sign-Up Bonus Points90,000 to 150,000

Uncapped points earning
Lounge passes and travel insurance included
Annual fee is not inclusive of Velocity or QFF membership fee
$75,000 minimum income required
  • Transparency
    3.2 (54)
  • Customer Service
    3.2 (57)
  • Rates and Fees
    2.8 (52)
  • Rewards
    3.6 (53)
  • Online Experience
    3.3 (54)
  • Application Process
    3.4 (46)
  • Foreign Transaction Fee 3%
  • BenefitsComplimentary Travel Insurance and Sign-Up Bonus Points Offer
  • Minimum Credit Limit $3,000.00 to $15,000.00
  • Maximum Credit Limit $75,000.00
  • Minimum Income $75,000.00 to $750,000.00
  • Rewards ProgramQantas Frequent Flyer, Velocity Frequent Flyer and Westpac Altitude Rewards
  • Points Earn Rate 0.75 to 3 points per $1
  • Contactless PaymentsApple Pay, Google Pay, Samsung Pay, Fitbit Pay and Garmin Pay
ANZ Platinum
Balance Transfer Credit Cards

ANZ Platinum

3.4 from 27 reviews
Purchase Rate20.24% p.a.
Annual Fee$87.00 p.a.
Interest Free Period 55 days
0% p.a. for 25 months on purchases and $0 Annual Fee in the first year
Ongoing Annual Fee Waiver: $0 if you make $20,000 in eligible purchases on the card in 12 months
Complimentary Overseas Travel Insurance and Purchase Security Insurance
Add up to 9 Additional Cardholders at no additional cost
2% Balance Transfer Fee
3% International Transaction Fee
No attached rewards program
  • Transparency
    3.6 (16)
  • Customer Service
    3.6 (18)
  • Rates and Fees
    3.4 (18)
  • Rewards
    3.5 (6)
  • Online Experience
    3.7 (18)
  • Application Process
    3.8 (14)
  • Foreign Transaction Fee 3%
  • BenefitsComplimentary Travel Insurance, Introductory Interest Rate and Reduced First Year Annual Fee
  • Minimum Credit Limit $6,000.00
  • Minimum Income $35,000.00
  • Introductory Rate 0% p.a. for the first 17 months
  • Reduced First Year Annual Fee $0.00
  • Contactless PaymentsApple Pay, Fitbit Pay, Garmin Pay, Google Pay and Samsung Pay
Coles Rewards Mastercard
Balance Transfer Credit Cards and Rewards Credit Cards

Coles Rewards Mastercard

2.7 from 158 reviews
Purchase Rate19.99% p.a.
Annual Fee$99.00 p.a.
Interest Free Period 55 days
20,000 bonus flybuy points on offer
$0 Annual Fee in your first year
$10 off Coles supermarket shop at the checkout each time you redeem 2,000 flybuys points
Earn 2 flybuys Points per $1 on eligible spend
0% p.a. on balance transfers for 18 months
Relatively high $99 Annual Fee
$30 Late Payment Fee
1.5% Balance Transfer Fee
  • Transparency
    3.0 (130)
  • Customer Service
    2.7 (137)
  • Rates and Fees
    3.2 (115)
  • Rewards
    3.7 (101)
  • Online Experience
    2.9 (123)
  • Application Process
    3.2 (110)
  • Foreign Transaction Fee 2.5%
  • BenefitsReduced First Year Annual Fee and Sign-Up Bonus Points Offer
  • Minimum Credit Limit $2,000.00
  • Rewards Programflybuys
  • Points Earn Rate 2 points per $1
  • Reduced First Year Annual Fee $0.00
  • Contactless PaymentsApple Pay and Samsung Pay
Commonwealth Bank Low Rate
Low Rate Credit Cards and Balance Transfer Credit Cards

Commonwealth Bank Low Rate

4.4 from 12 reviews
Purchase Rate13.24% p.a.
Annual Fee$59.00 p.a.
Interest Free Period 55 days
Low purchase interest rate of 13.24%
Accessible minimum credit limit of $500
$59 Annual Fee
3% International Transaction Fee
No attached rewards program
5.99% p.a. on Balance Transfers for 5 months, reverting to the high Cash Advance Rate of 21.24% thereafter
  • Transparency
    4.3 (7)
  • Customer Service
    4.6 (7)
  • Rates and Fees
    4.4 (7)
  • Rewards
    2.7 (3)
  • Online Experience
    4.3 (7)
  • Application Process
    4.5 (8)
  • Foreign Transaction Fee 3%
  • BenefitsCashback Offer
  • Minimum Credit Limit $500.00
  • Contactless PaymentsApple Pay, Fitbit Pay, Garmin Pay, Google Pay and Samsung Pay
ANZ Low Rate
Low Rate Credit Cards and Balance Transfer Credit Cards

ANZ Low Rate

3.1 from 37 reviews
Purchase Rate12.49% p.a.
Annual Fee$58.00 p.a.
Interest Free Period 55 days
Low Interest Rate of 12.49% p.a. on purchases
$0 Annual Account Fee in First Year, $58 in subsequent years
0% on Balance Transfers for 30 months with no Balance Transfer Fee
Up to 3 Additional Cardholders at no additional cost
3% Foreign Transaction Fee
  • Transparency
    4.0 (13)
  • Customer Service
    3.9 (13)
  • Rates and Fees
    4.2 (13)
  • Rewards
    2.4 (5)
  • Online Experience
    4.0 (12)
  • Application Process
    3.8 (10)
  • Foreign Transaction Fee 3%
  • BenefitsReduced First Year Annual Fee
  • Minimum Credit Limit $1,000.00
  • Minimum Income $15,000.00
  • Reduced First Year Annual Fee $0.00
  • Contactless PaymentsApple Pay and Google Pay
Page 1 of 6

How does a credit card work?

A credit card is a line of credit that you can use for spending. If you get one, you'll get a statement each month that tells you the amount you owe for the billing period. You can choose to pay the entire amount owed or a portion of it - there will be a minimum repayment each billing period that’s typically around 2-3% of the total owed.

Unlike a personal loan which you pay off over a fixed term, a credit card can be used on an ongoing basis.

Credit cards are not bank debit cards, which are the cards you use to access the available funds in your bank account.

A man entering his pin on an EFTPOS machine to make a purchase with his credit card.

Should I get a credit card?

Credit cards can help boost your credit rating, be used all over the world, and provide funds when you’re short on cash or in an emergency. However, these handy pieces of plastic do come with risks, and can be expensive if you choose one that isn’t right for you and you don’t make your repayments on time.

That’s why you should know the conditions attached to a credit card as well as its benefits. You should also consider your own spending habits and how you’ll pay off a credit card.

We’ve outlined some advantages and disadvantages of using a credit card below.

Pros

Enable access to a revolving line of credit that can be a safety net for when you’re strapped for cash.
You can take advantage of an interest-free period for purchases.
Can get rewards, such as cashback benefits and frequent flyer points.
Can help you build a credit history, and if you use it responsibly, a good credit rating.
They’re often optimised for travel.

Cons

You may be charged interest, particularly if you don’t pay your whole closing balance by the due date.
There are often fees for using the card.
Because these are unsecured forms of credit (in that your debt isn’t backed up by collateral), you’ll typically pay higher interest rates than other loans.
Rewards can encourage you to spend more than you usually would or can afford.
Can negatively impact your credit score if you miss repayments.

Types of credit cards

Frequent Flyer & Travel Cards · See All

Frequent flyer or travel credit cards are designed for those who want to get rewards for their spending that can be redeemed for flights, upgrades, and other travel perks.

If you’re in the market for one of these, check the fine print to see whether the conditions of the card make it a good fit for you.

Look for things like:

  • The frequent flyer program the card is attached to.
  • Expiration dates on points earned.
  • Whether points you earn can be transferred to a different frequent flyer program.

Rewards Credit Cards · See All

Rewards credit cards allow you to earn points for every eligible dollar spent on it. These rewards can then be redeemed for things like vouchers, entertainment tickets, flights or flight upgrades, and cash back (this gives you a certain percentage, usually around 5%, of what you spend back into your account).

Credit cards with rewards programs typically have higher interest rates and more fees attached to them.

Put things into perspective

A lot of the time, one reward point roughly equals one cent. Take this into consideration so that you’re not swayed by deals offering a huge amount of points, because these may not actually be worth much.

Balance Transfer Cards · See All

A balance transfer card lets you transfer the balance (the amount you owe) of one credit card to another.

The new interest rate is usually 0% or a low rate for a limited period of time. If you can pay off the balance within that time, then you may save money, however you may end up paying more if you can’t.

A balance transfer card isn’t necessarily the best option for those struggling to meet their credit card repayments. You can read more about getting your debt under control at the Australian government’s Moneysmart website.

What to consider when choosing a credit card

Minimum repayments

You should work out how much you can afford to pay off each month to find a suitable loan. If you can pay the full balance each month, then consider looking for a credit card with many interest-free days so you don’t pay interest as long as you pay the balance within this period. This may be worth the higher interest rate and annual or monthly fee.

The benefits of paying more than the minimum

Paying more than the minimum monthly repayment means you can reduce the amount of interest you pay. Even paying slightly more than the minimum per month can make a big difference.

Use a credit card calculator to work out how much to pay each month

You can use a credit card calculator (found on the Australian government’s Moneysmart website as well as many bank and comparison service websites) to determine:

  • How long it will take to pay off your card by making the minimum repayments
  • How much money you can save by making higher repayments

Credit limit

When you apply for a credit card, you'll be offered a credit limit by the bank or credit provider. This is the maximum amount they will lend you. You don’t have to take the maximum amount on offer, so think about your spending and what you can afford to pay back before deciding on a credit limit.

Interest rates

How much interest you’ll pay will depend on the type of credit card, the transactions you make (for example, interest rates will vary for regular purchases, balance transfers, and cash advances), and when you make repayments.

Credit cards also sometimes have these two different interest rates:

  • Introductory interest rate: an interest rate that’s offered for a limited amount of time - not all credit cards offer this.
  • Purchase interest rate: the interest rate on purchases you make after the introductory (or honeymoon) period ends.

Interest-free period

A lot of credit cards come with an interest-free period, so you’re not charged interest on purchases made during that period, as long as you pay the outstanding balance in full by your monthly due dates. However, these cards may stil incur monthly or other fees during the interest-free period.

‘Interest-free’ credit cards often have interest-free periods of at least 55 days or at least 44 days.

Fees

Most credit cards have fees attached to them, such as:

  • Annual or monthly fee: a fee charged every year or every month. You can also find credit cards with no annual fee.
  • Late fee: for if you don’t make your minimum repayment, plus any overdue amount, by the monthly due date.
  • Cash advance fee: this is charged if you withdraw money from your credit card.
  • Overlimit fee: a fee charged if you go over your credit limit.
  • Lost or replacement card fee: when you need a replacement card delivered to you.

Ensure that you look closely at the fees of any credit card you’re considering, as these will often be higher if you opt for a credit card with special perks.

Benefits

Some credit cards come with benefits, such as:

Perks are rarely free

Be aware that benefits attached to a credit card are rarely free, as their cost is often covered by higher interest rates or fees than you’d find in other card types.

The bottom line

A credit card can be a useful thing to have as long as you use and manage it responsibly. If you pay your balance off in full every billing period, then it can provide you with benefits and rewards that won’t cost you more than they’re worth.

Any credit card comparison you do should consider interest rates, fees, and benefits, but you should first do your research and think about whether getting one in the first place is the right choice for you.

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