A young lady sitting on couch holding a credit card

The importance of your first credit card

Get your credit history off to the right start with your first credit card.

Credit cards can be a useful way to fund emergency purchases, provide flexible cash flow or consolidate debt. However, managing a credit card isn’t always easy and it’s important that you know how to use it properly to avoid falling into debt. Here we break down the best* ways to use a credit card and why your first credit card is so important.

Two reasons why your first credit card is so important

1. Your first credit card can help you build your credit history.

How you use your credit card will have an impact on your credit history. Your credit file contains information about your financial history, including telecommunications contracts, personal loans, history of repayments, loan defaults or contracts and of course credit card applications.

If you’ve never had a card before, your credit card can help build a good foundation for your credit rating. If you’re approved for a credit card, this will show future lenders that you’re a low-risk applicant. Plus, maintaining a history of complete and on-time repayments is an indication of your ability to handle and repay credit. This will especially come in handy when you’re applying for future loans such as a personal loan, car loan or mortgage.

2. You can learn how to budget with your first credit card.

A credit card can also teach you about budgeting. You can use your available credit limit to cover short-term cash flow problems, or you can use your credit card to pay for big ticket purchases. In both cases, you will need to manage how you repay what you’ve spent so you can avoid paying more in interest than you have to.

Some credit cards offer interest free promotional periods or interest-free days for the lifetime of the card. This feature gives you time to pay back the purchases you make using your credit card without incurring additional interest charges. Incorporating your first credit card into your weekly or monthly budget can give you extra credit when you need it. You'll just need to make sure you repay what you’ve spent within the interest-free period so that you can use your credit card as a form of interest-free finance.
How to build a good credit history with a credit card

Comparing credit cards for first time cardholders

Rates last updated April 26th, 2018
Name Product Annual fee Purchase rate (p.a.) Balance transfer rate (p.a.) Product Description
Citi Simplicity Card
$0 p.a.
19.99% p.a.
0% p.a. for 15 months with 1.5% balance transfer 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.
ME frank Credit Card
$0 p.a.
11.99% p.a.
Save money with a $0 annual fee for life, the same low 11.99% p.a. interest rate on purchases and up to 55 days interest-free.
ANZ Frequent Flyer Black
$0 p.a. annual fee for the first year ($425 p.a. thereafter)
19.99% p.a.
Get 75,000 bonus Qantas Points when you meet the spend requirement, unlimited Véloce airport lounge access and a $0 annual fee for the first year.
28 Degrees Platinum Mastercard
$0 p.a.
21.99% p.a.
4.99% p.a. for 6 months
No annual fee for life, up to 55 days interest-free on purchases and no foreign transaction fees.
American Express Velocity Escape Card
$0 p.a.
20.74% p.a.
0% p.a. for 12 months with 1% balance transfer fee
Earn uncapped Velocity Points on purchases, pay $0 annual fee for life and take advantage of a 0% p.a. for 12 months balance transfer offer.
Qantas American Express Discovery Card
$0 p.a.
20.74% p.a.
0% p.a. for 12 months with 1% balance transfer fee
Earn an uncapped 1 Qantas Frequent Flyer point per $1 spent, plus complimentary purchase insurance.
ANZ Rewards Platinum
$0 p.a. annual fee for the first year ($95 p.a. thereafter)
18.79% p.a.
Receive a $0 first year annual fee offer, 65,000 bonus Reward Points when you meet the spend criteria and up to 1.5 points per $1 spent.
Westpac 55 Day Platinum Credit Card
$0 p.a. annual fee for the first year ($90 p.a. thereafter)
19.84% p.a.
0% p.a. for 20 months with 2% balance transfer fee
Receive a 20 month balance transfer offer, up to 55 days interest-free on purchases, a platinum concierge service and a $0 first year annual fee.
St.George Amplify Card
$0 p.a. annual fee for the first year ($79 p.a. thereafter)
19.49% p.a.
3% p.a. for 36 months
Take advantage of 3% p.a. interest on balance transfers for 36 months. Plus, a $0 first year annual fee and Amplify or Qantas Points per $1 spent.

Compare up to 4 providers

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How to apply for your first credit card

All credit cards require that you have a good credit history. Your first credit card is likely to be the first listing on your credit file. This won’t be a problem if you’re applying for a low rate or low fee credit card; however, if you want a platinum or rewards credit card, you may need to have an established credit history first.

You can establish a credit history by entering into a basic credit agreement such as an internet or mobile phone contract. You may also want to consider a secured personal loan. Financial institutions can provide a loan to first timers if the loan is secured to an asset such as a car or a cash deposit.

As well as a good credit history, other application requirements apply.

  • Age. You must be over the age of 18 to apply for a credit card.
  • Residency. You must be an Australian resident (some financial institutions can provide credit cards for temporary residents).
  • Minimum income. You must be able to meet the minimum income requirements. If no minimum income requirement is listed, you must be able to service the minimum credit limit.

An application for a credit card can be completed online. It should only take about 15 minutes to complete and you will have an answer in minutes. You can find the application requirements for each credit card listed on our review and application pages for each card.

Beware, if you apply for too many credit cards in a short space of time, it’s going to ruin your chances of getting approved for a credit card later on. Multiple applications for credit cards (or credit in general) is a warning sign for financial institutions and paints you as a credit hungry customer.

Do's and don'ts of your first credit card

Here are some mistakes to avoid and good habits to get into with your first credit card (and every card thereafter):


  • Make regular repayments. You need to make at least the minimum monthly repayment so you can avoid late payment charges, stop your account from going into default and maintain a good credit history. The minimum monthly repayment is usually just a couple of percent of what you owe on the account.
  • Pay more than the minimum amount each month. In some cases, if you just make the minimum monthly repayment it could take decades to pay off your account. The more you pay and the sooner you pay it, the less you will pay in interest charges in the long run.
  • Educate yourself. It's important to understand how credit cards work. For example, remember that ATM withdrawals count as cash advances and will immediately charge a higher interest rate. Or even if you have a 0% purchase or balance transfer offer on your card, you'll still need to make repayments each month and you can only take advantage of interest-free days when you pay your balance in full. Understand the fees and charges that come with most credit cards before you apply or at least as soon as you get your card.


  • Make cash advances. Cash advances are an expensive way to use your credit card. When you use your credit card to get money from an ATM or to pay some bills, you’ll be charged a cash advance fee of a couple of dollars as well as the cash advance interest rate, which can be as high as 20% p.a. Furthermore, interest-free days do not apply when you use your credit card for a cash advance.
  • Overspend. It’s so easy to pay for something on credit and worry about it later. This is a toxic spending pattern that will land you in debt. Know your limits. Use a budget planner to figure out how much you can spend. A credit card repayment calculator can help you work out how much you need to pay back each month so that you can pay off your credit card debt in a timeframe that’s comfortable to you.
  • Drink champagne on a beer budget. In other words, apply for a credit card you can afford. For most people applying for their first credit card, this is a no annual fee or low rate credit card. Rewards credit cards can be a great way to get something for nothing, however, these products generally feature high annual fees and interest rates. Make sure you compare credit cards before you apply so you know that you’re getting the right credit card for your needs.

Your first credit card can help you build your credit history so that you can apply for other credit products such as a home loan in the future. If you have questions about applying for your first credit card, get in touch with us using the question form below.

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Sally McMullen

Sally McMullen is an editor at finder.com.au who is a credit cards, frequent flyer and travel money expert by day and music maven by night.

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