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Credit Cards: The pros and cons of owning a credit card

There are many pros and cons to credit card ownership, and having a full understanding of these will allow you to enjoy a healthier relationship with your credit card.

The main pro is the convenience of being able to pay for goods or services without physically handing over cash or organising a bank transfer of some sort. Look for a low interest credit card or a low or $0 annual fee credit card. The main con is the possibility of ending up in financial straits from overspending or not managing your debts wisely. If debt is an issue, perhaps a debit card should be considered.

The pros of credit cards

  • Flexibility. Credit cards allow the customer to avoid having to carry large amounts of cash around. They are perfect for those occasions when an unexpected purchase becomes necessary, and sufficient cash is not available. They also allow for quick and simple phone and internet transactions.
  • Safety. When cash is lost or stolen, there may be no way of recovering it. If your credit card is lost or stolen, the card will be replaced, and your maximum liability for fraudulent use is limited by law to $50. However, Visa, Mastercard and American Express all operate zero-liability policies so that the customer is not liable for even a single cent.
  • Spending power. Credit limits on credit cards often mean that customers can purchase large goods straight away that they would normally have to save up for over many months.
  • Rewards programs. These reward the customer for their spending on a credit card so that they can claim rewards in various areas such as flights, retail rewards, and cashback.
  • Special offers and rates. Credit card providers will often announce special offers with affiliated companies, and regularly allow new or existing customers to make balance transfers at preferential rates.

The cons of credit cards

  • Overspending. When talking about the pros and cons of credit cards, this is the classic downside. Some individuals can get easily carried away with their credit card, creating a debt that is beyond their means to pay off. Credit cards should not be seen as having access to "free money". In fact, once the interest starts kicking in, you will end up paying more than the purchase price of your goods.
  • Multitasking. A credit card should be used for just one task. If it has a good rate for purchases, then it should be reserved for that. If a balance transfer is made to a credit card, then it should be used for nothing else. Problems arise when customers think it's okay to carry out both these transactions on their credit card simultaneously. This creates a conflict of interest - literally. The lower interest debt is always paid off first, which means the higher interest purchases will keep accruing interest untouched by your repayments.
  • False sense of security. Covering everyday purchases on a credit card can lead customers to believe they have more cash available than they really do. Having cash in your pocket must be logically balanced by the level of your credit card debt. If your credit card debt is building, your ready cash should be set aside to cover it at the end of the month.These are the main pros and cons to be aware of with credit card ownership. Remember that owning a credit card means you are involved in a legally-binding contract, so you need to make sure you are playing a straight game.

Compare credit cards

Rates last updated September 22nd, 2018
Name Product Purchase rate (p.a.) Interest Free Period Annual fee Balance transfer rate (p.a.) Product Description
St.George Vertigo Platinum - Online Offer
12.74% p.a.
Up to 55 days on purchases
$99 p.a.
0% p.a. for 25 months
Long-Term Balance Transfer Offer
Save with 0% p.a. interest for up to 25 months on balance transfers with no BT fee. Plus, platinum perks, including overseas travel insurance.
Citi Clear Platinum Credit Card
12.99% p.a.
Up to 55 days on purchases
$0 p.a. annual fee for the first year ($99 p.a. thereafter)
0% p.a. for 14 months
Platinum Credit Card with a Low Interest Rate *
Offers a 0% p.a. for 14 months balance transfer and $0 first year annual fee. Plus, insurance covers and Citibank Dining Program perks.
ANZ Low Rate
12.49% p.a.
Up to 55 days on purchases
$58 p.a.
0% p.a. for 15 months
Long-Term Balance Transfer Offer*
Save with a 0% p.a. introductory rate on balance transfers for 15 months with no BT fee. Plus a low 12.49% p.a. interest rate on purchases.
Citi Simplicity Card
19.99% p.a.
Up to 55 days on purchases
$0 p.a.
0% p.a. for 15 months with 1.5% balance transfer fee
Low Intro Balance Transfer Interest Rate with No Annual Fee
Save with 5% cashback on eligible purchases (capped at $50 per month) for the first 90 days from approval. Plus, a 15 month balance transfer offer.
Westpac Low Rate Card
13.49% p.a.
Up to 55 days on purchases
$0 p.a. annual fee for the first year ($59 p.a. thereafter)
0% p.a. for 24 months with 1% balance transfer fee
$0 First Year Annual Fee & Balance Transfer Offer*
Offers a 0% for 24 month balance transfer option, first year annual fee waiver and a competitive purchase rate.
Suncorp Clear Options Platinum Credit Card - Exclusive Offer
20.74% p.a.
Up to 55 days on purchases
$99 p.a. annual fee for the first year ($129 p.a. thereafter)
0% p.a. for 18 months
Exclusive Balance Transfer Card Offer*
finder Exclusive: Ends 30 September 2018 Receive a long 18-month, 0% p.a., no fee balance transfer and earn Suncorp Rewards Points or Qantas Points per $1 spent.
Citi Clear Platinum - Exclusive Offer
14.99% p.a.
Up to 55 days on purchases
$49 p.a. annual fee for the first year ($99 p.a. thereafter)
0% p.a. for 24 months with 1.5% balance transfer fee
Reduced First Year Annual Fee & Balance Transfer Offer*
finder Exclusive: Ends 30 September 2018 Receive 0% p.a. for 24 months on balance transfers and a discounted annual fee in the first year. Plus, access to Citi World Privileges.
Qantas Premier Everyday
19.99% p.a.
Up to 55 days on purchases
$0 p.a. annual fee for the first year ($49 p.a. thereafter)
4.9% p.a. for 24 months
$0 First Year Annual Fee & Bonus Points Offer
Take advantage of up to 40,000 bonus Qantas Points, a $0 first year annual fee plus complimentary overseas travel insurance.
HSBC Platinum Credit Card
19.99% p.a.
Up to 55 days on purchases
$129 p.a.
0% p.a. for 22 months with 2% balance transfer fee
Annual Fee Refund & Balance Transfer Offer*
Offers a 0% p.a. for 22 months balance transfer and an annual fee refund each year when you spend $6,000. Plus, 2 airport lounge passes every year.
Qantas Premier Platinum
19.99% p.a.
Up to 55 days on purchases
$299 p.a.
0% p.a. for 15 months
60,000 bonus Qantas Points with Balance Transfer Offer
Get 60,000 bonus Qantas points and a $300 Qantas Flight Voucher when you spend $4,000 in 90 days. Plus, complimentary lounge passes.
American Express Velocity Platinum Card - Exclusive Offer
20.74% p.a.
Up to 55 days on purchases
$375 p.a.
0% p.a. for 12 months with 1% balance transfer fee
70,000 Velocity Points Credit Card*
finder Exclusive: Ends 26 September 2018 Receive 70,000 bonus Velocity Points when you spend $3,000 within the first 3 months. Plus, Status Credits & lounge passes.
ANZ First Visa Credit Card
19.74% p.a.
Up to 44 days on purchases
$30 p.a.
0% p.a. for 18 months with 2% balance transfer fee
Low Annual Fee and up to 44 days interest-free
Get up to 18 months interest-free on balance transfers and save with a low $30 annual fee. Plus, up to 44 days interest-free on purchases.
Bendigo Bank Low Rate Mastercard
11.99% p.a.
Up to 55 days on purchases
$45 p.a.
Low Rate Credit Card Offer*
A no-frills card with a competitive annual fee, a low variable purchase interest rate of 11.99% p.a. and up to 55 interest-free days on purchases.
NAB Low Fee Platinum Card
19.74% p.a.
Up to 44 days on purchases
$90 p.a.
0% p.a. for 24 months with 2% balance transfer fee
Platinum Credit Card with Balance Transfer Offer*
Offers 7 complimentary insurance covers, a 0% p.a. for 24 month balance transfer and access to a 24/7 concierge service for a $90 p.a. annual fee.
Virgin Australia Velocity Flyer Card - 0% Interest Offer
0% p.a. for 14 months (reverts to 20.74% p.a.)
Up to 44 days on purchases
$129 p.a.
0% p.a. for 6 months
0% for 14 months Purchase Offer with Virgin Australia Gift Voucher*
Enjoy 0% p.a. interest on purchases for 14 months. Plus, the chance to earn 1 million Velocity Points. Ends 31 Oct 2018.
Bankwest Zero Platinum Mastercard
17.99% p.a.
Up to 55 days on purchases
$0 p.a.
2.99% p.a. for 9 months
$0 Annual Fee & 0% Foreign Transaction Fees
Offers a $0 annual fee, 0% foreign transaction fees, complimentary international travel insurance and a balance transfer offer.
St.George Vertigo Visa
13.74% p.a.
Up to 55 days on purchases
$55 p.a.
0% p.a. for 16 months
Low Annual Fee with Balance Transfer Offer*
Get 0% p.a. interest for up to 16 months on balance transfers with no BT fee. Plus, a competitively low annual fee and purchase rate.
Virgin Money Low Rate Credit Card
11.99% p.a.
Up to 44 days on purchases
$49 p.a.
0% p.a. for 14 months
Low Purchase Rate & Balance Transfer Offer*
Offers a $49 annual fee, 10% cashback on purchases made in the first 3 months (capped at $100) and 0% p.a. for 14 months on balance transfers.
American Express Explorer Credit Card
20.74% p.a.
Up to 55 days on purchases
$395 p.a.
0% p.a. for 12 months with 1% balance transfer fee
75,000 Bonus Points*
Get 75,000 bonus Membership Rewards points, a yearly $400 Travel Credit and 2 entries per year to the American Express Lounge. Ends 26 Sept 2018.
Westpac Altitude Platinum Card - Qantas
20.24% p.a.
Up to 45 days on purchases
$50 p.a. annual fee for the first year ($200 p.a. thereafter)
Bonus Points and Annual Fee Offer*
Earn 60,000 bonus Qantas Points when you spend $3,000 within 90 days of card approval. Plus, a $50 first year annual fee.
Virgin Australia Velocity Flyer Card - Bonus Points Offer
20.74% p.a.
Up to 44 days on purchases
$64 p.a. annual fee for the first year ($129 p.a. thereafter)
0% p.a. for 18 months
Up to 60,000 bonus Velocity Points Offer*
Earn up to 60,000 bonus points in the first 3 months with a $64 first year annual fee. Plus, the chance to win 1 million Velocity Points.
St.George Amplify Signature - Qantas - Online Offer
19.49% p.a.
Up to 55 days on purchases
$179 p.a. annual fee for the first year ($279 p.a. thereafter)
Reduced First Year Annual Fee & Bonus Points Offer*
Offers 90,000 bonus Qantas Points when you spend $4,000 within 90 days, two yearly Qantas Club lounge passes and a reduced first year annual fee.
HSBC Platinum Qantas Credit Card
19.99% p.a.
Up to 55 days on purchases
$199 p.a.
0% p.a. for 12 months
Bonus Points & Balance Transfer Offer*
Receive 60,000 bonus Qantas Points when you spend $3,000 within 3 months of card approval, plus enjoy complimentary travel insurance.
NAB Low Fee Card
19.74% p.a.
Up to 44 days on purchases
$30 p.a.
0% p.a. for 18 months with 2% balance transfer fee
Low Annual Fee & Balance Transfer Offer
Receive complimentary purchase protection insurance, a 18 month balance transfer offer and special offers from Visa Entertainment.
NAB Low Rate Platinum Card
0% p.a. for 9 months (reverts to 13.99% p.a.)
Up to 55 days on purchases
$100 p.a.
0% p.a. for 6 months with 2% balance transfer fee
Platinum Credit Card with an introductory Purchase Offer*
Enjoy a 0% p.a. interest rate offer on purchases for 9 months and the protection of 7 complimentary insurances including overseas travel insurance.

Compare up to 4 providers

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Credit Card Offers

Important Information*
Citi Clear Platinum Credit Card

Interest rate

12.99

Annual fee

0*

*$99 p.a. after first year

Westpac Altitude Platinum Card - Qantas

Interest rate

20.24

Annual fee

50*

*$200 p.a. after first year

ANZ Low Rate

Interest rate

12.49

Annual fee

58

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