Credit Cards Guide - Step 1 of 7 - Usage

Like a set of keys, there is no one-size-fits-all credit card. What's important to one person won't be for the next so in order to hunt down your plastic companion you need to take a look at your spending habits, as this will shine a light on what's really important.

Credit cards are generally used as an additional financial source to purchase goods and services, however people use credit cards in many different ways. Some people struggle to pay off their card each month, using it as a short or long term loan, whereas others chase reward points and never pay interest, always paying their bill on time.

It’s handy to recognise these types of spending habits as it will play a vital part in choosing a credit card. Based on these habits there are four main spending profiles to help show you what type of card will best suit your patterns. By working out which profile you best match, you are well placed to save money on a great credit card deal.

The Habitual Spender

Struggling to pay your card off each month?

Interest, what’s that? Habitual spenders use their credit card like they do their debit card and are constantly incurring interest and paying off debt.

If you struggle to pay off your credit card each month, you may benefit from a low rate card with a very low or no annual fee. If you are truly habitual and already carry a solid credit card debt, then also consider a balance transfer or a personal loan.

The Impulse/Occasional Spender

Not using your card often?

Your credit card is not an accessory but rather a necessary financial tool. You may use it to order large purchases that you don’t have the money upfront for and pay it off over an extended period.

If you only use your card for emergencies and occasional spending, such as at sales time and holidays, and then use the following couple of months to pay off the balance, you should consider finding a low rate card with a very low or no annual fee. If you just need the ability to make purchases online and overseas, a debit card may also suit.

Be aware, most low interest credit cards offer a lower rate for the introductory period so make sure you commit to paying off your entire debt during this period because afterwards the interest rates will spike, making it much harder for you to pay it off.

The Everyday Spender

Using for essentials and always paying off?

You use your card almost every day to do your grocery shopping, buy purchases online or pay your bills, but are tedious when it comes to paying off your credit card balance on time each month. Your monthly spend may come in at around $2000 per month.

If you use your card for regular purchases and you pay off your balance each month, then you won’t be as concerned about interest rates as you will be about the card features and fees. You will need to find a card that provides a rewards programs you're interested in, such as cash back or frequent flyer points.

Keep in mind rewards cards often come with a higher annual fee, so make sure you choose one you will get the most out of, at the lowest cost.

The Big Spender

Using for everything and always paying off?

As the name suggests, you are a big spender forking out over $5000 per month on your credit card. Perhaps you use your credit card to gain reward points, or for the convenience, but you are always conscientious about paying off your credit card debt in full each month.

If you’re a high income earner and big spender who always pays off your balance, you might be in the market for a card that provides features and perks that you use frequently. These may include free travel insurance, concierge services and rewards programs. Look for a rewards card that you will get the most out of.

Selecting the right credit card for your lifestyle is extremely important. Find a card that fits your spending needs, and don't select a credit card with a bunch of added extras unless you truly need them. You may end up paying a high annual fee for services and features you don't require.

Now you’ve identified your spending profile you can start doing a credit card comparison on RateCity. You will notice that most cards listed are given a star rating out of five, with five stars representing outstanding value for money. This can help you decide on which financial institution and credit card offers great value for your needs.

To view your next credit card steps, click through from the list below;

Credit Cards Guide - Step 2 of 7 - Interest
Credit Cards Guide - Step 3 of 7 - Rewards
Credit Cards Guide - Step 4 of 7 - Features
Credit Cards Guide - Step 5 of 7 - Brands
Credit Cards Guide - Step 6 of 7 - Type
Credit Cards Guide - Step 7 of 7 - Checklist



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.