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Best Credit Card Australia
With a surplus of choice, choosing the best credit card in Australia is an onerous task. But rather than selecting a card with bells and whistles, an understanding of your spending habits will help you pick the right card.
No matter the bank or institution, most credit cards have distinct features intended to benefit different spending profiles. In banking circles, these profiles are often referred to as ‘revolvers’ and ‘transactors’.
Transactor
A transactor is usually a cashed-up customer who pays the full closing balance off their card each month, thus avoiding a monthly interest charge.
Generally speaking, the best credit card in Australia for a transactor will offer plenty of interest free days. This gives a transactor more time to get the cash together to pay off the closing balance. That said, should a transactor miss a monthly payment, they can lose the interest-free days altogether and be slapped with a late fee.
Revolver
A revolver is the lender’s favourite customer as they only make minimum monthly payments. For this, they are regularly whacked with hefty interest charges.
For this reason revolvers are better off with a credit card with lower interest charges and no rewards program. Any interest free days are also immaterial as they apply only if the previous month’s balance was paid in full by the due date.
Balance transfer card
If you’re a revolver and looking for a way out of the red, a ‘balance transfer’ or ‘low interest rate’ card might be the best credit card in Australia for you.
A balance transfer card offers a honeymoon period solely for the amount you transfer from an existing credit card. The carrot is that a balance transfer card includes a very skinny, and therefore appealing, interest charge. However when the honeymoon is over, the card reverts to a higher interest charge.
To make a balance transfer card work for you, try to consistently chip away at the debt before the interest rate reverts. If you’re sensible, a balanced transfer card can slash hundreds of dollars in additional interest payments and help get you back into the black.
