A young lady sitting on couch holding a credit card

The importance of your first credit card

Information verified correct on January 24th, 2017

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 January 24th, 2017.

ANZ Frequent Flyer Black

75,000 bonus points extension with $2,500 minimum spend + annual fee waiver for the first year.

November 29th, 2016

HSBC Platinum Credit Card

Annual fee refund + 0% p.a. for 15mos balance transfer offer have been extended until 30 June 2017.

December 27th, 2016

Citi Simplicity Card

0% p.a. for 9 months has been updated to 15 mos. on balance transfers. Offer ends 30 June 2017.

January 13th, 2017

View latest updates

Jonathan Choi Jonathan
Annual fee Purchase rate (p.a.) Balance transfer rate (p.a.)
American Express Essential Credit Card
Receive a $50 credit on eligible spend and get Smartphone screen insurance combined with a no annual fee for life card. Also enjoy a 0% p.a. balance transfer rate for 12 months.
$0 p.a. 14.99% p.a. 0% p.a. for 12 months with 1% balance transfer fee Go to site More info
HSBC Platinum Credit Card
Receive a full annual fee refund and save $149 if you meet the $6,000 spend requirement. Enjoy a balance transfer offer and platinum card benefits such as complimentary insurances and concierge services.
$149 p.a. 19.99% p.a. 0% p.a. for 15 months Go to site More info
ANZ Frequent Flyer Black
Earn 75,000 bonus Qantas Points when you spend $2,500 on eligible purchases within the first 3 months plus enjoy $0 annual fee for the first year. Also, receive complimentary airport lounge access and 24/7 concierge service.
$0 p.a. annual fee for the first year ($425 p.a. thereafter) 19.99% p.a. Go to site More info
Citi Simplicity Card
Pay no annual fee to ever, plus receive access to complimentary purchase insurance and the Citibank Dining Program.
$0 p.a. 19.99% p.a. 0% p.a. for 15 months with 1.5% balance transfer fee Go to site More info
ANZ Platinum Credit Card - Exclusive Offer
Receive a low introductory offer of 0% p.a. on purchases for 3 months and 0% p.a. on balance transfers for 12 months. Also, enjoy an annual fee waiver in the first year.
$0 p.a. annual fee for the first year ($87 p.a. thereafter) 0% p.a. for 3 months (reverts to 19.74% p.a.) 0% p.a. for 12 months Go to site More info
Virgin No Annual Fee Credit Card
No annual fee credit card with $100 cashback and a long term low rate balance transfer offer of 0% p.a. for 18 months with 2% balance transfer fee. Spend criteria applies for cashback offer.
$0 p.a. 18.99% p.a. 0% p.a. for 18 months with 2% balance transfer fee Go to site More info
ANZ Frequent Flyer Platinum
Get 50,000 bonus Qantas Points when you apply online, are approved and spend $2,500 on eligible purchases within the first 3 months. Enjoy a waived annual fee for the first year and earn up to 1.5 Qantas Points per dollar spent.
$0 p.a. annual fee for the first year ($295 p.a. thereafter) 19.99% p.a. Go to site More info

Compare credit cards for travel

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.

How much should you pay off your credit card each month?

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Sally McMullen

Sally McMullen is a journalist 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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