Flexibility, safety & rewards with Australia’s leading credit cards
Credit cards offer flexibility. They are safer than carrying cash, and often come with benefits that reward you for your spending.
There are hundreds of credit card providers operating on the Australian market and subsequently, thousands of different cards. These include a host of banks, credit unions, building societies, alternative credit providers and major retailers.
Credit cards are essentially a revolving line of credit which can be used to manage cash better, earn rewards, transfer balances and reduce interest, avoid paying currency conversion fees, get extended warranty on all purchases among many other things.
Credit card providers
As mentioned there are hundreds of credit cards providers in Australia and although this means that issuers have to offer more value, lower their rates and simply better service it also means it tough to sort through them and find the one for you.
To help you find and choose the best credit card for your needs let’s first look at the different credit cards or, more accurately, credit card functions before delving into the best way to find and compare different products.
Section 1: Types of credit cards
Rewards credit cards
These are very popular among travelers and are usually used in television and print advertisements to attract new customers. Rewards cards vary wildly because each credit card issuer may have their own reward scheme.
From frequent flyer to voyager miles and eBucks – you can find a card that will incorporate your favorite retailers and give you maximum rewards or cash backs for the things you would normally do and things you normally spend money on.
It’s important to remember that any card with above average rewards is more than likely to carry higher annual card fees or even a high interest so always ensure you’re prepared to pay balances off as quickly and efficiently as possible when opting for this type of credit card.
You can also obtain a platinum credit card which, offers everything a typical reward card would but at an accelerated rate with more complimentary offers.
0% Interest cards
These credit cards are perhaps one of the most popular among new applicants who are interested in the interest free purchases that can be made. You will get a very low or a 0% interest for a period ranging from 55 days to 12 months.
Although people tend to focus on the time period that the introductory 0% interest periods will run -what’s perhaps more important to consider is the interest rate that it will revert to after this interest free period.
Credit cards with low interest
These cards carry a below average interest rate and are especially good for people that typically carry a balance over on their credit card. If you have a history of not paying credit card balances in full this is likely to be the best option for you.
What’s important to remember with a low rate credit card is that you will very likely be charged annual fees and that you should always ask for these to be disclosed and even compared prior to accepting any deals.
Balance transfer credit cards
This is a credit card that financial savvy spender often opt for to cut out interest and save themselves a decent amount of money. Balance transfer cards allow holders to transfer balances from other credit cards that have a balance and carry an interest.
Many of these cards have interest free periods that go all the way up to 24 months but, once the introductory of 0% offer period expires the revert rate is typically higher than on many other types of credit cards.
To make sure you utilize a balance transfer credit card the right way, always repays the transferred balance in full before the 0% interest rate expires.
If you do not, you may end up in a worse position than you were initially in. In addition, always check and compare the revert rate and annual fees you’ll be paying to find the best possible card for you.
Credit cards with no annual fees
This type of credit card is the most suitable for prudent spenders that always pay off their credit card balances in full.
With this card you do not pay any annual fees or very little and, since you repay your credit card balance in full and on time you do not incur any interest!
It is important, however, to still check the interest and compare different no fee credit cards to see which offer the highest value overall.
Loyalty, branded, sport & charity credit cards
Loyalty credit cards are, for example cards issued by airlines for their most loyal members. One such card is the ever popular frequent flyer card. Branded or sport credit cards are products that are branded with a certain sports team or a charity organization and any transactions you perform on the card will either let you gain points towards tickets or memorabilia or will donate a certain percentage of the transaction to the chosen charity.
Foreign currency or Travel credit cards
These cards are for people that travel a lot or for people that are planning a trip and do not want to dish out hundreds of dollars on currency conversion fees.
These cards let you load credit and use credit up to your set limit in a foreign currency so you do not get charged every single time you draw money or use cash while overseas or on holiday.
Section 2: What to look for
When looking for a credit card you first have to know what to look for. This includes everything from card fees, interest rates, introductory periods and insurance among others.
Here is a checklist of things to consider:
- The credit card scheme – American Express, MasterCard or VISA
- Any introductory offers such as the 0% interest on purchases or balance transfers
- Interest rate and/or revert rates
- Annual fees
- Currency conversion rates
- Cash advance interest rate
- Insurance offered
- Rewards offered
- Late payment penalties
Section 3: Comparing credit cards
Why it’s important to compare credit cards
Comparing credit cards will not only help you find the best interest rate, the lowest annual fees and the best rewards programs but it will help you eliminate all credit cards that are absolutely irrelevant and all those which do not suit your needs.
Comparing credit cards online
With so many options to choose from the best way to go about finding a credit card is to use a comparison site. These sites list and compare a massive range of credit cards – usually in a table format – so you can compare interest free periods, annual fees, rewards and so on, easily.
Comparing cards online means that you can save a lot of time and effort since you do not have to visit multiple websites to review their credit card products and it also means your research will be more accurate since you don’t have to take notes manually or search through pages and pages of content just to find the revert rate.