What you need to consider when looking for your credit card
If you’ve used or compared credit cards in the past you’re probably well aware that they come with different features, and while some basic features remain the same, some can vary significantly. What makes for a top credit card*, as a result, depends on the kind of credit card you’re looking for, which can include features such as a low rate on purchases, a low annual fee, balance transfer offers, frequent flyer and rewards points or platinum privileges.
While the qualities of one card may work for one type of cardholder, it may not be compatible with another user. Consider your own personal circumstances when choosing which card is best for you. This table provides a cross-section of offers on our website to help you with your comparison.
Competitive Credit Card Offers
* The offers compared on this page are chosen from a range of products finder.com.au has access to track details from and is not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of terms "Best" and "Top" are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your personal financial circumstances when comparing products.
Some of the top types of credit cards listed
- Low rate cards
- No annual fee credit cards
- Balance transfer credit cards
- Rewards credit cards
- Credit cards with introductory offers
What are some of the credit card types to choose from?
Credit cards can broadly fit into the following categories:
Low rate cards
Low rate credit cards charge a low rate of interest on purchases you make relative to other credit card types. Low rate cards typically offer an interest free period with which to repay the balance of any purchases made.
No annual fee and discounted annual fee cards
These include cards that don’t charge any ongoing annual fees and cards that don’t charge annual fees for the first year. No annual fee cards typically charge higher rates on interest on purchases than a typical low rate credit card.
Balance transfer credit cards
These cards come with 0% p.a. or low balance transfer rates for an introductory period. You should be aware that any balance not repaid will incur interest charges at the end of the introductory period. The rate at which the unpaid balance is charged ('revert rate') is either set at the purchase or cash advance rate on the card. Determine the revert rate of the card you select when looking to do a balance transfer.
Introductory purchase rate cards
These cards charge 0% p.a. or low interest on purchases for a given time period, giving cardholders the ability to save some money on interest during the introductory period
Rewards cards are ones that reward you for your spending in the form of frequent flyer points, vouchers and cashback. Be aware that the annual fees vary and these fees need to be weighed up against the value of the rewards you will earn with the card. Interest rates on purchases are typically charged at a higher rate than a low rate card. If you are not in a position to pay off your balance, consider a low rate credit card instead, as interest charges will be lower.
Pros and cons
Each of the different card types represented have their own advantages and disadvantages, so be sure to research the card type to find out more information.
- Competitive features. Cards that come with some of the most competitive offers in their respective realms.
- Low annual fees. They can charge no, low, or discounted annual fees
- Value. Some provide great value even after the end of promotional offers
- Variety. You get a variety of card types from which to choose
- High income requirements. Platinum and premium cards come with high minimum income requirements
- Limitations. Many credit cards pose limitations, whether this refers to how you can earn or redeem rewards points or in regards to how much you can balance transfer.
What should I avoid?
No matter which credit card you use, there are several things you should try to avoid for as long as you continue using the card in question:
- A card that doesn’t benefit you financially
If you’re paying high annual fees but aren’t making use of features like rewards and other added benefits, using the card in question does not make financial sense.
- Overextending yourself
Overextending your means just to make the most of your card is not a good idea. You should not, for example, increase your spending just to earn more reward points.
- Carrying a balance
Carrying an outstanding balance from one billing cycle to the next will have you paying interest, which can add up to a tidy sum over time. This can be a particular problem if your card attracts a high purchase rate.
The Australian credit card industry is awash with options, and when it comes to applying for a new card it’s only natural for people to want what’s ideal for them. The top credit card*, in essence, depends on the specific features you’re after, and once you know what you need, take some time to compare offerings by credit card issuers.
Frequently Asked Questions
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