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Compare NowWhat is a credit card?
A credit card lets you spend money that you can pay back over time, usually with interest.
Unlike a debit card – where you need money in the bank – a credit card gives you a set amount you can spend (or borrow), known as your credit limit. You also get regular statements (usually monthly) and need to make repayments by the due date on them.
Want more details? Check out Finder's guide to how credit cards work.
"When comparing credit cards, decide what's most important to you. Is it a low interest rate? Low annual fee? Bonus frequent flyer points? Maybe a balance transfer deal? For instance, I pay my balance in full each month, so I ignore the interest rates and don’t look at balance transfer offers. Instead, I aim to find cards with a great points earning rate. Knowing exactly what you want, makes it easier to find the right card for you."
What types of credit cards are there?
There are 5 main types of credit cards. Here is a quick explanation of each one; every card is slightly different, so you should compare credit cards to find the best credit card that has the features that matter to you.
Card type | Principal use | Pros | Cons |
---|---|---|---|
Balance transfer | Pay off existing debt with no / low interest | Save money on interest and pay down debt faster | Minimal perks and no interest-free days on new purchases |
Rewards | Earn points on your spending | Get rewarded for money you’d spend anyway | High interest rates & annual fees |
No annual fee | Credit without an upfront cost | Costs nothing if you pay it off in full or don’t use it at all | Minimal perks and higher interest rates |
Low rate | Pay off purchases over time while paying less interest | Saves you money if you carry a balance from month to month | Minimal perks |
Business | Managing cash flow and separating spending | Offer distinct features for business (like accounting feeds) | Stricter eligibility requirements |
Credit card guides and resources
Applying & credit score
How old do you have to be to get a credit card?
In Australia, you must be at least 18 years old to apply for a credit card in your name. This is the age you are legally considered an adult and, since minors can't be held liable for contracts, only adults can apply for credit products.
This policy is part of the strict lending rules that protect young Australians from getting into debt they can't afford.
Finder survey: How old are Australians when they get their first credit card?
Response | |
---|---|
18-22 | 31.63% |
23-27 | 28.21% |
I’ve never had a credit card | 14.73% |
28-32 | 12.94% |
33-40 | 8% |
41-50 | 2.7% |
50+ | 1.8% |
How to compare credit cards
Here's a breakdown of features and charges you should look at when doing a credit card comparison.
Annual fee
- What is it? The amount you'll have to pay each year just to use the card.
- What you should know: Higher annual fees usually mean more perks and rewards.
Balance transfer rate
- What is it? The interest rate you’ll pay if you transfer a balance from another card.
- What you should know:The lower the interest rate, the better. Most introductory offers are for 0% p.a. on your balance, but you may pay a one-time fee.
Cash advance rate
- What is it? The interest rate you’ll pay if you take cash out or make an equivalent transaction.
- What you should know: This is often the highest interest rate on a credit card, so avoid cash advances unless it's an emergency.
Credit card network
- What is it? The payment system that processes all your credit card transactions. Visa, Mastercard, American Express and Diners Club are the key credit card networks in Australia.
- What you should know: Banks and brands partner with Mastercard and Visa, so you'll see their logos on your cards. American Express issues cards and has its own network for processing payments. Diners Club has more limited availability and is leaving the Australian market.
Foreign transaction fee
- What is it? The fee you'll be charged on purchases made in a foreign currency overseas or online.
- What you should know: There are plenty of cards on the market with 0% foreign fees.
Interest-free period
- What is it? The amount of time you'll get before you're charged interest on your purchases.
- What you should know: More days give you more time to pay off your balance so you won’t be charged interest.
Minimum repayment
- What is it? The lowest amount you need to pay by the due date to keep your account in good standing.
- What you should know: You can always (and should try to) pay more than the minimum amount. But paying less can lead to late payment fees and hurt your credit score.
p.a.
- What is it? This abbreviation of “per annum” is used for credit card interest rates, because the annual (or yearly) value is shown.
- What you should know: As an example, the interest you’d be charged over 12 months would be about 20% of your balance on a credit card with a 20% p.a. interest rate.
Purchase interest rate
- What is it? The amount of interest you'll pay if you don’t pay your card off in full.
- What you should know: The lower the interest rate, the less you’ll pay in potential interest.
Rewards program
- What is it? Offers points and perks that you can earn for your spending.
- What you should know: Common features include points, insurance, lounge passes and premium services.
Pros & cons of credit cards
Pros
- Flexibility. If you have a big purchase to make, a credit card can be a financial "buffer" – letting you buy it and then repay it over time. If it’s used wisely, it can be interest free.
- Convenience. Credit cards allow you to buy what you need, when you need it. You can use them to shop in-store, online and overseas, with security features to protect against fraud.
- Rewards. Everyone loves perks. A credit card can help you get frequent flyer points, cashback on your groceries, flight upgrades or even gift cards.
Cons
- Debt. Credit card interest adds up quickly if you don't pay your balance on time, which could cost you hundreds (or thousands) of dollars and take a long time to pay back.
- Can be expensive. The average interest rate for an Australian credit card is around 20%, RBA stats show. In comparison, the average interest rate for a variable rate personal loan is 14.41%.
- Sneaky fees and surcharges. Some businesses add a surcharge to credit card payments, which can be 1–2% of the total purchase cost.
Bottom line? Credit cards have a mix of great perks and understandable risks. A good rule of thumb is to compare credit cards to ensure you get one with the features you need, while having a plan for paying it off and using the benefits.
What's happening in credit cards in November?
By Finder's money editor, Richard Whitten.
Australians are spending more on their credit cards than ever, spending $426 billion in transactions over the last 12 months according to the latest figures.
But most of us are on top of our balances: the average Australian credit card balance is $3,304. But the average balance for a cardholder who is getting charged interest (meaning they haven't paid the card off in full) is $1,559. This figure was almost $1,000 higher a decade ago.
"Maintaining these records helps you track your spending, verify transactions, and catch any errors or fraudulent activities promptly. They are also useful for budgeting, filing taxes, and providing proof of purchase or payment if disputes arise. Keeping organised and accessible records of your statements, whether in digital or paper form, ensures you have a comprehensive financial history that can be referenced whenever necessary."
Should I get a credit card?
For many Australians, using a credit card is an everyday part of life. But not everyone needs a credit card.
In fact, Finder research has found that 72% of Australians could manage their money without a credit card. They technically don't need a card but still have one for different reasons, including:
- For emergencies
- To earn rewards or frequent flyer points (which are not offered by most other accounts)
- To make big purchases
- To build credit history
- To pay off debt and/or get a balance transfer
Some people also like the security of knowing that a credit card uses the bank's money, so you're not directly out-of-pocket when it comes to fraud. On the other hand, you shouldn't take on debt you don't need, especially if you're paying interest on it.
Impulse shoppers are typically more prone to credit card debt and could end up with a big balance and interest charges, which can take years to pay off.
Did you know? 2024 Finder research shows the average Australian with a credit card could save $222 over 32 months by switching cards.
Have questions about credit cards? We have answers
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Ask a question
A card that dosnt have large fees
Hi Danielle,
Check out low rate credit cards or a no annual fee credit card.
Hi, i have an existing “FPO” on my ready credit card, and i paid half way off of the contract term. And now they are offering me another “FPO” on the amount that i have already paid off. I wanted to take it, because the interest is low and i need some money. How the payment should be, is it going to combine or separate payment? Thank you.
Hi Dennis,
Yes, they would set up a brand new flexible payment option on your account, and you’ll have two seperate payment plans set up.
Hope this helps!
Hi, I am a pensioner, I pay an annual fee on my credit card but now the commbank wants an extra 8 dollars a month in fees, they obviously need it, is there a credit card that has low interest n no ongoing fees other than the yearly fee?
Regards
Trek Bakr
Hi Trek, Is your card the Commonwealth Bank Awards Card? The fee is $8 per month instead of an annual fee; it works out to be $96 a month.
If you’re not happy with that card, you can browse a few options for low-fee or no-fee credit cards here.
Hope this helps!
American Express have just rejected an increase in my credit limit. I am very surprised as I have a high income, small mortgage, large amount of equity in my house and superannuation. I have no other debt or loans. Have had the card for 6 years and pay the balance in full every month.
I am trying to get information on what income, assets, credit rating they used to assess my eligibility for a card increase. They won’t tell me anything and have been incredibly unhelpful.
How can I get information.
Which Ombudsman should I complain to – financial services?
Is a Freedom of Information request possible.
I accept that they don’t have to give me an increase but I am concerned that there is an error in the data that they are using to assess my application and want the opportunity to correct any errors. If I can’t get an increase to $12,000 on an income of $210,000 with a mortgage of $400 a week I can’t see how anyone can get a credit card.
Hi Kylie,
Most banks and lenders don’t publicly share the data and criteria they use to assess applicants, which is frustrating. If it helps, banks generally use a formula of 2-3% per month. So, if your limit is $12,000, they assess your ability to make a repayment based on $240 to $360 per month at a minimum.
In regards to your application, it could be a mistake, or there could be a valid reason why.
Some of the reasons that could contribute to this could be:
– an issue with your credit score. You can check your credit score for free in the Finder app.
– having other credit cards, especially ones with high limits. Each one is assessed as requiring a payment worth 2-3% of the credit limit each month. So, they may assess you as not being able to afford a higher limit.
– having other personal debts and loans that impact your serviceability.
– consistently late or missed payments, resulting in late payment fees; this could indicate difficult managing your current repayments, therefore they don’t want to extend you any further credit. You mentioned you pay the balance in full each month, so this is unlikely to be the reason.
It would be worth checking your credit file as a first step, and then contact Amex again and ask if they won’t approve $12,000, what limit would they approve? If you’re still not satisfied, it might be worth shopping around for a card that better suits your needs.
Hope this helps!
Looking for credit card with no exchange fees etc when used overseas, plus free travel insurance, plus perhaps pays bonus points . Happy to pay small annual fee. I always pay full balance off each Month. What would be your recommendations? Thank you
Hi Maureen,
Finder has a dedicated guide to credit cards with no foreign transaction fees, which includes a comparison table with filters for different features you’re interested in. I hope this helps.