Are the cheapest credit cards right for you?

Is the cheapest credit card in Australia the best for you? As it turns out, it may not be. Credit cards offer many features, some you will benefit from and others you won't. There is one rule to finding the right credit card for you - know your individual spending habits.

If you are on a mission to sniff out the cheapest credit cards in Australia, the first thing to consider is how you are likely to use your credit card. There isn't one card that suits everyone so to find the cheapest card for you ask yourself these three important questions about your spending habits:

Do you pay off your card in full?

If you always pay off your card in full each month, one of the cheapest credit card for you may be one with no annual fee and 55 days interest free. These cards typically have a higher interest rate, however, so it’s important to pay your bill on time.

Do you need time to repay your balance?

If you cannot pay off your credit card balance each month, it’s best to search for a credit card with a low interest rate otherwise you will end up paying a lot more in interest. So, even with an annual fee around $80, a low interest rate card will most likely save you more money versus a no annual fee card with a higher interest rate. This is an example of where a card that appears more expensive will end up being cheaper in the long run.

Do you spend big on your credit card?

If you repay your card in full and use it excessively, a rewards credit card may be the cheapest card for you. If you are considering a rewards credit card, calculate how much you are likely to spend in a year, check how many points you will receive and how you can claim those points. This way you can compare different rewards cards to find the best deal, and if the rewards beat the higher cost of the card, then this could be the card for you. And remember to choose the card with the best rewards for your lifestyle.

Low interest rates, no annual fees or rewards, each has its own perks it's just a matter of finding which ones really matter to you and will save you more money in the long run.

To start the search for your best credit card use the RateCity low rate credit card comparison tool.

This is an information service. By browsing on the website and/or using our search tools, you are asking RateCity to provide you with information about products from multiple financial institutions. We will try to show you a range of products in response to your request for information. The search results do not include all providers and may not compare all features relevant to you, for further details refer to our FSCG. The rating shown is only one factor to take into account when considering these products. We are not a credit provider, and in giving you product information we are not making any suggestion or recommendation to you about a particular credit product. If you decide to apply for a product, you will deal directly with a financial institution, and not with RateCity. Rates and product information should be confirmed with the relevant financial institution, and you should review the PDS before you decide to purchase. See our terms of use for further details. This advice is general and has not taken into account your objectives, financial situation or needs. Consider whether this advice is right for you.