Find some of the terms in this table confusing? Jump down to our glossary to learn about key features and how to compare credit cards.
A credit card lets you spend money that you can pay back over time, usually with interest.
Unlike a debit card – where you need money in the bank – a credit card gives you a set amount you can spend (or borrow), known as your credit limit. You also get regular statements (usually monthly) and need to make repayments by the due date on them.
Want more details? Check out Finder's guide to how credit cards work.
"When comparing credit cards, decide what's most important to you. Is it a low interest rate? Low annual fee? Bonus frequent flyer points? Maybe a balance transfer deal? For instance, I pay my balance in full each month, so I ignore the interest rates and don't look at balance transfer offers. Instead, I aim to find cards with a great points earning rate. Knowing exactly what you want, makes it easier to find the right card for you."
- Sarah Megginson, Finder's head of editorial
There are 5 main types of credit cards. Here is a quick explanation of each one; every card is slightly different, so you should compare credit cards to find one that has features that matter to you.
| Card type | Principal use | Pros | Cons |
|---|---|---|---|
Balance transfer | Pay off existing debt with no / low interest | Save money on interest and pay down debt faster | Minimal perks and no interest-free days on new purchases |
Rewards / frequent flyer | Earn points on your spending | Get rewarded for money you’d spend anyway | High interest rates & annual fees |
No annual fee | Credit without an upfront cost | Costs nothing if you pay it off in full or don’t use it at all | Minimal perks and higher interest rates |
Low rate | Pay off purchases over time while paying less interest | Saves you money if you carry a balance from month to month | Minimal perks |
Business | Managing cash flow and separating spending | Offer distinct features for business (like accounting feeds) | Stricter eligibility requirements |
Here's a breakdown of features and charges you should look at when doing a credit card compari.
Bottom line? Credit cards have a mix of great perks and understandable risks. A good rule of thumb is to compare credit cards to ensure you get one with the features you need, while having a plan for paying it off and using the benefits.
By Finder's money editor, Richard Whitten.
Australians are spending more on their credit cards than ever, to the tune of $419 billion in transactions over the last 12 months according to the latest figures.
The average balance for a cardholder who is getting charged interest (meaning they haven't paid the card off in full) is $1,373. That number is creeping up from its lowest point in late 2022, but it is still very low compared to where it was over a decade ago.
For many Australians, using a credit card is an everyday part of life. But not everyone needs a credit card.
In fact, Finder research has found that 72% of Australians could manage their money without a credit card. They technically don't need a card but still have one for different reasons, including:
Some people also like the security of knowing that a credit card uses the bank's money, so you're not directly out-of-pocket when it comes to fraud. On the other hand, you shouldn't take on debt you don't need, especially if you're paying interest on it.
Impulse shoppers are typically more prone to credit card debt and could end up with a big balance and interest charges, which can take years to pay off.
Did you know? 2024 Finder research shows the average Australian with a credit card could save $222 over 32 months by switching cards.
You pay nothing. Finder is free to use. And you pay the same as going direct. No markups, no hidden fees. Guaranteed.
You save time. We spend 100s of hours researching credit cards so you can sort the gold from the junk faster.
You compare more. Our comparison tools bring you more credit cards from across the market.
Discover exactly how the average Australian uses their credit card.
A limited number of payment platforms give you a way to pay rent with a credit card, but are the costs worth it?
Compare the surcharges that you can expect when you pay with a credit card and pick up tips to avoid these extra fees.
While there isn't one best credit card, you can find a card that suits your needs by comparing the features, deals and offers that are trending here.
Learn why you shouldn't apply for multiple credit cards at once and pick up healthy financial habits to improve your credit score.
When you apply for a credit card online, you could receive a response within 60 seconds. Find out how you to find a card that you're eligible for and increase your chances of approval.
Find out how much you need to earn each year to apply for a credit card and compare low income credit cards in this guide.
While a credit card is linked with a line of credit, a debit card is connected to your own money. Compare the differences between the card types in this guide.
Calculate how much you're paying in interest based on your current credit card repayments and discover how much you should pay each month to meet your financial goal.
Find out how you can keep your overseas spending costs down by comparing credit cards with no foreign transaction fees and no currency conversion fees.
Hi, I am a pensioner, I pay an annual fee on my credit card but now the commbank wants an extra 8 dollars a month in fees, they obviously need it, is there a credit card that has low interest n no ongoing fees other than the yearly fee?
Regards
Trek Bakr
Hi Trek, Is your card the Commonwealth Bank Awards Card? The fee is $8 per month instead of an annual fee; it works out to be $96 a month.
If you’re not happy with that card, you can browse a few options for low-fee or no-fee credit cards here.
Hope this helps!
American Express have just rejected an increase in my credit limit. I am very surprised as I have a high income, small mortgage, large amount of equity in my house and superannuation. I have no other debt or loans. Have had the card for 6 years and pay the balance in full every month.
I am trying to get information on what income, assets, credit rating they used to assess my eligibility for a card increase. They won’t tell me anything and have been incredibly unhelpful.
How can I get information.
Which Ombudsman should I complain to – financial services?
Is a Freedom of Information request possible.
I accept that they don’t have to give me an increase but I am concerned that there is an error in the data that they are using to assess my application and want the opportunity to correct any errors. If I can’t get an increase to $12,000 on an income of $210,000 with a mortgage of $400 a week I can’t see how anyone can get a credit card.
Hi Kylie,
Most banks and lenders don’t publicly share the data and criteria they use to assess applicants, which is frustrating. If it helps, banks generally use a formula of 2-3% per month. So, if your limit is $12,000, they assess your ability to make a repayment based on $240 to $360 per month at a minimum.
In regards to your application, it could be a mistake, or there could be a valid reason why.
Some of the reasons that could contribute to this could be:
– an issue with your credit score. You can check your credit score for free in the Finder app.
– having other credit cards, especially ones with high limits. Each one is assessed as requiring a payment worth 2-3% of the credit limit each month. So, they may assess you as not being able to afford a higher limit.
– having other personal debts and loans that impact your serviceability.
– consistently late or missed payments, resulting in late payment fees; this could indicate difficult managing your current repayments, therefore they don’t want to extend you any further credit. You mentioned you pay the balance in full each month, so this is unlikely to be the reason.
It would be worth checking your credit file as a first step, and then contact Amex again and ask if they won’t approve $12,000, what limit would they approve? If you’re still not satisfied, it might be worth shopping around for a card that better suits your needs.
Hope this helps!
Looking for credit card with no exchange fees etc when used overseas, plus free travel insurance, plus perhaps pays bonus points . Happy to pay small annual fee. I always pay full balance off each Month. What would be your recommendations? Thank you
Hi Maureen,
Finder has a dedicated guide to credit cards with no foreign transaction fees, which includes a comparison table with filters for different features you’re interested in. I hope this helps.
What’s a good credit card for a poor credit rating?
Hi Rhiannon, this guide on credit cards for applicants with poor credit may be useful.
As an alternative, you may be eligible for a Good Shepherd no interest loan, of up to $3000 – these are usually available to help with urgent medical bills and housing costs, like rent.
Hope this helps!
If you’re cancelling an Amex business card and apply for a new personal Amex card, do you get bonus reward points?
Hi Jack, If the Amex was in your personal name, then you may not be eligible for the bonus offer. According to their official policy: American Express Card Members who currently hold or who have previously held any Consumer or Small Business Card product in the previous 18 month period are ineligible for Welcome offers.
If in doubt, contact them directly for confirmation just to be sure!