From premium credit cards that offer points and other perks to 0% interest options and no-frills accounts, here’s how to find the best Australian credit card for you.
Everyone has a different opinion about which credit card is the best option in Australia. For some people, it could be a frequent flyer card that offers thousands of introductory bonus points, while for others it could be a balance transfer card that offers 0% p.a. for 24 months or more. There are also people that prefer high-end cards with premium perks, or those who think no-frills cards with low ongoing costs are ideal.
What all of these options show is that the best credit card actually varies depending on your goals, needs and preferences. So instead of rushing to apply for a card that someone else has singled out as the “best Australian credit card”, you can use this guide to compare different options based on your goals and find a card that works for you.
How to find the best Australian credit card for you
The key to finding the best credit card for you is to think about why you want a credit card and what you'll use it for. To get started, think about the following questions:
- What is the main reason for getting a credit card? Is it to pay off existing debt, earn rewards or enjoy perks such as complimentary travel insurance? Once you have narrowed down your focus, you can start looking at cards that offer these particular features.
- Will I carry a balance? Credit cards attract interest charges if you don't pay off your account at the end of each statement period. So if you want the flexibility to pay off your balance over time, you could look at cards with low ongoing interest rates to help keep costs down.
- How much am I willing to pay in fees? As well as charging interest when you carry a balance, most Australian credit cards have an annual account fee. This could be as low as $25 or as high as $700 or more, depending on the card. So think carefully about how much you want to pay for the card and weigh this against the value you could get from any extras such as rewards or complimentary insurance.
Once you have answered these questions, you can compare credit cards based on your goals.
Compare some of the best credit cards
Different types of credit cards
Most credit card websites and comparison services separate cards based on different features. This can help you narrow down your search for a credit card when you know what you want. If you're still not sure what type of credit card is right for you, here's a brief rundown of some of the most popular credit card categories in Australia.
Balance transfer credit cards
If you're struggling to repay an existing credit card debt, you can transfer your balance to a card with 0% on balance transfers. You can then pay off your debt faster without paying any interest for a promotional period. The introductory period will vary from card to card, but it's not uncommon to come across cards with interest-free periods from 12 to 24 months or more.
At the end of the promotional period, any remaining debt will collect the revert rate (which is usually the standard cash advance or purchase interest rate). This means you should pay more than the minimum repayment and aim to clear the entire debt before the introductory offer ends. Please note that these cards often come with annual fees and balance transfer fees (which is usually 2%-3% of the balance transfer amount).
Frequent flyer credit cards
If you're a regular traveller and big spender, you could consider a frequent flyer credit card that'll earn points for every dollar you spend. In Australia, some of the most popular frequent flyer credit cards are linked to the Qantas Frequent Flyer program or Virgin Australia's Velocity frequent flyer scheme. Many of these cards offer thousands of bonus points on sign up and when you meet the spend requirement, which can help you boost your points balance. You'll also earn points for every $1 you spend on eligible purchases, although the specific earn rates will vary between cards. Once you've earned enough points, you can redeem them for flight rewards, flight upgrades, accommodation, travel packages and more.
Designed to suit travellers, these cards also often come with travel-centric perks including complimentary international travel insurance, airport lounge passes, travel credits or complimentary flight vouchers and concierge services. Although these cards are packed with perks, they usually come with higher annual fees and purchase rates. As such, these cards are better suited to cardholders who can earn enough points to outweigh the annual fee and can afford to pay their balance in full each month.
Rewards credit cards
Many card issuers offer rewards credit cards that are linked to the bank's own loyalty program. Similar to frequent flyer cards, these products also often come with bonus points offers and their own specific earn rates. However, you can usually redeem your points for products from the reward program online store including gift cards, merchandise, experiences and more.
Many bank loyalty programs are also partnered with frequent flyer programs, so you can transfer your points to specific airline loyalty programs. This can come in handy if you prefer your points to have a little more flexibility or if you belong to a frequent flyer program that isn't directly linked with any credit cards in Australia (such as Singapore Airlines' KrisFlyer or Air New Zealand's Airpoints). Just keep in mind that these cards also generally come with higher annual fees and interest rates, so they're not suited to cardholders who carry a balance from month to month.
Cheapest credit cards
The cheapest credit card for you will depend on how you're using the card. If you only use your card for emergencies or always pay your balance in full, you could benefit from a card with $0 annual fee. Or if you struggle to pay off your credit card in full each month, you could reduce interest costs with a card with 0% on purchases for a promotional period or a low ongoing purchase rate. To find the cheapest credit card, make sure to consider how you're going to use the card and the fees you're most likely to collect before you apply.
Choose the best card for you
With so many different options to choose from, finding the best credit card for you will depend on your personal financial situation and spending habits. To get started, check our finder's guide to the best credit cards.
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