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.
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.
How do I compare low rate credit cards?
Ask yourself the following if you’re looking for the a low annual fee credit card:
- What’s the annual fee?Low rate credit cards are your best bet when it comes to paying low ongoing interest, and an easy way to compare these cards is to look at their annual fees.
- Is there a downside to the low annual fee?
To make up for the low annual fee certain cards might not offer features that most credit card users take for granted. Make sure that the card you’re applying for offers interest-free days on purchases, and find out how many interest-free days you can get.
- Is the low fee ongoing?
Certain credit cards offer annual fee waivers for the first year, after which an ongoing annual fee comes into effect. Look for a card that charges little or no ongoing annual fees.
- What is the interest rate? Watch out for credit cards that try to offset low annual fees with high interest rates. This is not much of a concern if you plan to pay your account’s closing balance in full every month.
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.
How do I compare balance transfer credit cards?
Balance transfer offers can help you save a tidy sum in the form of interest, but make sure you pay attention to the following aspects at the very onset:
- What is excluded?
Find out if the new card issuer accepts balance transfers from your existing card issuer, because this is not always the case. You should also confirm what percentage of the credit limit can be transferred and calculate whether this works for you.
- What’s the balance transfer rate
This refers to the interest transferred balances attract, which can go as low as 0% p.a. The time period these introductory rates stay in place tend to vary.
- What’s the revert rate?
At the end of the promotional period, any outstanding balance starts attracting the card’s purchase rate or cash advance rate. Bear in mind that the cash advance rate can be considerably higher than the purchase rate. This aspect is not a concern if you pay the transferred balance in full during the promotional period. Find out more about balance transfer revert rates.
- Are there other fees?
The annual fee you end up paying should not outweigh how much you save through the balance transfer, and account for any balance transfer fees you might have to pay.
- Initiating the process
Most credit card issuers that offer balance transfer promotions require new cardholders to initiate the balance transfer process at the time of application, or no later than when they activate their new cards. So make sure you confirm these details before applying to avoid missing out.
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.
How do I compare rewards credit cards?
While how you can earn and redeem rewards are important considerations, factors like interest rates and annual fees still need your attention. With respect to rewards cards, pay attention to the following:
- What’s the earn rate?
Rewards credit cards come with different earn rates, and this can have a significant effect on how quickly you earn rewards. Some premium cards give you the ability to earn up to three reward points per dollar spent on eligible transactions.
- Value of reward points
Establish what a card’s reward points translate to when converted to dollar value. If you, for instance, spend 15,000 reward points to redeem a reward worth $100, and you earned one point for every dollar spent, 150 reward points translate to one dollar.
- Are the points capped or limited by an expiry date?
Certain credit cards place limitations on the maximum number of points you can earn each year, and in some instances, your points can expire after a given number of years. This not only depends on the rewards program you’re part of, but also on the card you choose.
- Redeeming points
Not all rewards programs offer as much freedom when it comes to redeeming accumulated reward points. Find a rewards card that allows you to choose from travel and shopping rewards as well as a range of merchandise, and you can also look forward to redeeming your points for cashback or transferring them to your frequent flyer program account.
- Annual fees
If you’re paying high annual fees, ensure that the rewards you earn make up for the same.
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.Back to top
Frequently Asked Questions
Can I apply for a credit card online?
Leading credit card issuers in Australia accept online applications, and you can apply for the cards listed on this page by clicking on their corresponding ‘Go to Site’ buttons.
How quickly can I get a new credit card?
Can I apply for multiple credit cards at the same time?
You can, but it’s not a good idea. This is because credit applications find a mention on your credit file, and no credit card issuer likes seeing too many applications for credit in a short span of time.