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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 July 21st, 2018
Name Product Purchase rate (p.a.) Interest Free Period Annual fee Balance transfer rate (p.a.) Product Description
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: 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.
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: Receive a long 18-month, 0% p.a., no fee balance transfer and earn Suncorp Rewards Points or Qantas Points per $1 spent.
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.
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
Introductory Purchase Rate Offer*
Buy now and pay later with 0% p.a. interest on purchases for 14 months. Plus, 0% p.a. on balance transfers for up to 6 months.
American Express Westpac Altitude Platinum Bundle - Exclusive Offer
20.24% p.a.
Up to 45 days on purchases
$0 p.a. annual fee for the first year ($199 p.a. thereafter)
$0 First Year Annual Fee and Bonus Points Offer*
$0 first year annual fee & up to 90,000 bonus Altitude Pts when you meet T&C with this Visa (issued by Westpac) & Amex (issued & serviced by Amex).
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
$0 p.a. annual fee for the first year ($129 p.a. thereafter)
0% p.a. for 22 months with 2% balance transfer fee
$0 First Year Annual Fee & Balance Transfer Offer*
Offers a 0% p.a. for 22 months balance transfer, $0 annual fee for the first year and an annual fee refund each year when you spend $6,000.
NAB Low Fee Platinum Card - Exclusive Amazon Offer
19.74% p.a.
Up to 44 days on purchases
$90 p.a.
0% p.a. for 24 months with 2% balance transfer fee
Cashback & Balance Transfer Offer*
finder Exclusive: 10% cashback with amazon.com.au for 12 months (capped at $25 per month). Plus, 0% p.a. on balance transfers for 24 months.
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, up to $100 cashback when you make a purchase within 3 months and 0% p.a. for 14 months on balance transfers.
American Express Westpac Altitude Platinum Bundle - Qantas
20.24% p.a.
Up to 45 days on purchases
$50 p.a. annual fee for the first year ($249 p.a. thereafter)
Reduced First Year Annual Fee and Bonus Points Offer*
Up to 90,000 bonus Qantas Points when you meet the criteria with this dual Visa (issued & serviced by Westpac) & Amex (issued & serviced by Amex).
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.
Citi Rewards Platinum Credit Card
20.99% p.a.
Up to 55 days on purchases
$49 p.a. annual fee for the first year ($149 p.a. thereafter)
0% p.a. for 26 months with 2.5% balance transfer fee
0% p.a. for 26 months Balance Transfer Offer*
Earn reward Points per $1 spent, take advantage of a 0% p.a. for 26 month balance transfer offer, plus complimentary international travel insurance.
St.George Vertigo Platinum - Online Offer
12.74% 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 24 months with 1% balance transfer fee
$0 First Year Annual Fee & Balance Transfer Offer
Platinum card benefits including complimentary insurance, plus first year annual fee waiver and 0% p.a. for 24 months on balance transfers.
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 Velocity Points in the first 3 months and enjoy a discounted annual fee of $64 for the first year.
Westpac Altitude Platinum Card - Qantas
20.24% p.a.
Up to 45 days on purchases
$50 p.a. annual fee for the first year ($150 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.
HSBC Low Rate Credit Card
13.25% p.a.
Up to 55 days on purchases
$79 p.a.
0% p.a. for 20 months with 2% balance transfer fee
Long-term Balance Transfer Offer*
Receive up to 20 months interest-free on balance transfers with a 2% BT fee. Also enjoy exclusive offers with the home&Away Privilege Program.

Compare up to 4 providers

Images: Shutterstock

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Credit Card Offers

Important Information*
Citi Clear Platinum - Exclusive Offer
Citi Clear Platinum - Exclusive Offer

Interest rate

14.99

Annual fee

99
Qantas Premier Everyday
Qantas Premier Everyday

Interest rate

19.99

Annual fee

49

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