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There are hundreds of credit cards out there in the market, so how do you know which one is the best one for you?

When looking for the best credit card for you, it’s important to compare products against your own financial situation and budget before sealing the deal. Credit cards offer a range of features but also may come with costly fees, so it’s up to you and a little bit of research to decide which card type best suits you.

Which is the best credit card in Australia?

There is no one “best” credit card in Australia, as there is such a large variety of credit card providers, types and uses in the market. To find your best credit card, you may want to look at your income, expenses, and credit card spending profile. Then, think about exactly what you want to use the credit card for to help narrow down your best credit card search. 

  • Habitual spenders - you use your credit card like a debit card and are constantly racking up interest on your outstanding balance.
    • Suggested cards - low rate credit cards, low fee credit cards
  • Impulse spenders - you use your credit card as a helpful financial tool and don't rely on it for everyday spending. You're only bringing it out for large purchases you otherwise couldn't afford in one go, in emergencies, or just when travelling/shopping online on overseas websites, and pay back this debt over time.
    • Suggested cards - low rate credit card, low fee credit card, travel credit card
  • Everyday spender - you use your credit card every day for purchases like groceries or to pay bills, but, different to the habitual spender, you ensure your credit card balance is always paid in full each statement period.
    • Suggested cards - low rate credit card, low fee credit card, rewards credit card, frequent flyer credit card, travel credit card
  • Big spender - you are a high income earner and put over $5,000 a month on your credit card. You may use your credit card for convenience or to try and earn rewards points and game point hacks. You are strict about paying off your balance in full to avoid interest charges.
    • Suggested cards - platinum credit card, rewards credit card, frequent flyer credit card  

What different types of credit cards are available?

As mentioned above, there are a range of spending profiles for each different credit card type. But what are the different types of credit cards available in Australia? 

  • Visa, Mastercard or AMEX - first and foremost, each credit card in Australia will either be a Visa, Mastercard or American Express card. Each card type has its own advantages and disadvantages, as well as individual rewards offered to customers.
  • Low rate credit cards - as the name suggests, these are credit cards offering low interest rates below the average purchase rate (generally around 16-18 per cent). These are typically ideal for cardholders who find themselves always being charged interest. 
  • No annual fee credit cards - again, as the name suggests, these credit cards either will not charge an annual fee or keep their ongoing fees very low. 
  • Rewards credit cards - whether your perks and rewards are linked to a standard rewards program, a frequent flyer program (like Qantas frequent flyer) or a store rewards program (retail gift cards and discounts), you are able to turn your everyday spending into handy extras. Bonus points are earned via spending on earned on eligible purchases. You may also enjoy perks like cash back, complimentary insurances such as travel insurance, concierge services and airport lounge access.
  • Travel credit cards - ideal for avid adventurers, travel credit cards typically suit those planning overseas travel or those who shop online on international websites. They may not charge any foreign transaction fees, and may come with complimentary travel insurance and other perks like airport lounge access. 
  • Balance transfer credit cards - When cardholders have an outstanding balance they're struggling to pay off, they can transfer this balance to a new card that has an interest-free period. The balance transfer offer may be a few months, or even years. You may be charged a balance transfer fee/balance transfer rate upon opening the new card account, which is generally a small percentage (1-3 per cent) of your balance. 
  • Platinum credit cards - Designed for big spenders, platinum credit cards are a type of premium card that carries all the bells and whistles of rewards cards, along with higher credit limits, additional perks and protections like purchase protection. You typically will need to meet a harder eligibility criteria, such as having a higher income than the average Australian. Platinum credit cards may also come with higher annual fees and purchase rates, but it's assumed the cardholders can afford these costs. 
  • Business credit cards - ideal for business owners, business credit cards are issued to a company with an Australian Business Number (ABN). They easily allow for the ordering of new cards and approving additional cardholders for various staff members. 

What are the pros and cons of having a credit card?

Unsure whether to switch from the humble debit card or savings account to a credit card? There are a few things to weigh up. 

Credit cards can be a handy asset when:

  • You don’t have a lot of cash with you;
  • You're travelling overseas; and
  • You want to earn bonus points for your everyday spending.

Keep in mind that credit card providers make money mostly by charging you interest on purchases you make when you don't pay your balance in full each statement period. They also may charge interest on money you withdraw and sting you with costly ongoing fees, such as annual fees, late payment fees and foreign transaction fees. 

That's not to say that credit cards aren’t worth getting - you just need to make sure you use them sensibly. But that convenience can also come with a cost. You might find yourself spending more when using a credit card than when using cash if you aren’t a disciplined spender.

RateCity tips for new cardholders

Be aware of the interest-free period. Remember that the interest-free period is for a limited time only. You may only have a window of no interest for the first year of the card. If you still have an unpaid balance on your credit card when the offer ends, you will be charged interest on the amount you owe. It’s best to pay off the debt before the interest-free period expires.

Credit card fees and charges

When deciding on the best credit card for your budget, a general rule of thumb is to aim for one that keeps fees and charges down. These costs can add a lot to your bill, and may result in you accumulating debt. Here are some of the main fee types you could be facing:

  • Annual fees
  • Late payments fees
  • Cash advance rate
  • Fees for exceeding your credit limit
  • Foreign transaction fees

However, not all credit card fees are considered bad. In fact, if you opt for a credit card with a rewards program, it's generally accepted that you will pay a little more in annual fees or interest rates for the benefit. These costs help to pay for the rewards, and may be unavoidable for this type of card.

  • For a full breakdown of any potential fees, read the Product Disclosure Statement (PDS) and terms and conditions linked to your credit card. It's crucial that you’re aware of these charges so that you can budget accordingly. The PDS will also have a breakdown of the earn rate on rewards programs.

How do I find the best credit cards?

The best way to find the right credit card for you is to use comparison tools, such as tables and calculators. 

Comparison tables allow you to compare apples with apples. You can filter down and sort from the options shown based on what you're looking for, such as card type, purchase rate, number of interest free days, and annual fees. This will help you to find the best credit card for your needs from RateCity's top pics. You'll also get a clear indication of any features and perks linked to the new credit card. 

Once you've narrowed down your search, it’s worth making a short list of potential cards and carefully looking at each card's PDS, key fact sheet or equivalent document. 

Once you've settled on a choice, triple check the eligibility criteria set by the credit card provider before you begin your card application. If you don't meet the card issuer's criteria, you may not get card approval and be rejected. This can seriously hurt your credit score and will be noted in your credit history. 

Also, keep in mind that credit cards can be a helpful financial tool but when misused are very capable of growing credit card debt. Maxing out your credit limit and having too much credit card debt will also hurt your credit score.

What is the best credit card interest rate?

In an ideal world, the best credit card interest rate would be no interest rate, as this is one of the biggest contributors to credit card debt. 

While some providers do offer introductory no-interest credit card offers, or zero per cent balance transfer offers, you will inevitably always have an interest rate on your credit card once this period ends. To avoid paying interest altogether, consider paying off your credit card balance in full each statement period. 

Keep in mind that like death and taxes, credit card interest is inevitable if you don’t pay your balance in full. For more premium credit cards, or those with greater perks, a higher interest rate is expected as it can help to pay for your rewards and benefits. Factor this into your search when looking for your best credit card. 

Which credit card gives you the best benefits?

There are a range of credit card benefits to choose from, including frequent flyer programs, rewards programs, cash back offers, gift cards, complimentary travel insurances and more. 

Choosing the best credit card that offers benefits will depend on exactly which type of benefits you’re after, which provider you prefer and how much you’re prepared to pay in annual fees and interest. Keep in mind that the more premium credit card offerings are typically reserved for high income earners, and you may not be eligible for every credit card on the market. 

How do I find the best frequent flyer or rewards credit card?

To find your best frequent flyer or rewards credit card for you, you’ll want to ask yourself what exactly you want out of your credit card. 

For example, is complimentary international travel insurance a must have? Or are you a lifelong Qantas frequent flyer member and need your credit card to offer Qantas rewards points? Perhaps you also want a credit card with a general rewards program that offers a low annual fee? 

Then, use a comparison table to filter down your card options via the features, fees and rate you’re interested in. You can then compare options side by side to further narrow your search for your next frequent flyer or rewards credit card. 

Frequently asked questions

How easy is it to get a credit card?

For most Australians, there are no great barriers to applying for and getting approved for a credit card. Here are some points that a lender will consider when assessing your credit card application.

Credit score: A bad credit score is not the be all and end all of your application, but it may stop you being approved for a higher credit limit. If your credit score is less than perfect, apply for the credit limit that you need, rather than the one you want.

Annual income: Most credit cards have minimum annual income requirements. Make sure you’re applying for a card where you meet the minimum.

Age & residency: You need to be at least 18 years old to apply for a credit card in Australia, and most require that you are an Australian citizen or permanent resident. However, there are some credit cards available to temporary residents.

How do you use credit cards?

A credit card can be an easy way to make purchases online, in person or over the phone. When used properly, a credit card can even help you manage your cash flow. But before applying for a credit card, it’s good to know how they work. A credit card is essentially a personal line of credit which lets you buy things and pay for them later. As a card holder, you’ll be given a credit limit and (potentially) charged interest on the money the bank lends you. At the end of each billing period, the bank will send you a statement which shows your outstanding balance and the minimum amount you need to pay back. If you don’t pay back the full balance amount, the bank will begin charging you interest.

What should you do if your credit card is compromised?

Credit card fraud is a serious problem. If your credit card is compromised and you’re wondering what to do, here are a few precautionary steps to take.

Contact you credit provider – Get in touch will your credit card provider. If you feel your card has been compromised, you should be able to lock or block it.

Monitor your accounts – Keep an eye on your credit card accounts. Any unauthorised transactions could be a sign your credit card has been compromised.

Check your credit rating – It’s also important to check your credit rating, to ensure you’re not a victim of identity theft or some other financial mischief.

What should you do when you lose your credit card?

Losing your credit card is a serious situation, and could land you in financial trouble. Here is a simple guide detailing what to do when you lose your credit card.

Lock you card – Contact your provider and inform them about your lost credit card. From here lock, block or cancel your card.

Keep track of transactions – Look out for unauthorised credit card transactions. Most banks protect against fraudulent transactions.

Address recurring charges – If your card is linked to recurring charges (gym membership, rent, utilities), contact those businesses.

Check credit rate – To ensure you’re not the victim of identity theft, check your credit rating a month or two after you lose your credit card.

How do you use a credit card?

Credit cards are a quick and convenient way to pay for items in store, online or over the phone. You can use a credit card as a cashless way to pay for goods or services, both locally and overseas. You can also use a credit card to make a cash advance, which gives you the flexibility to withdraw cash from your credit card account. Because a credit card uses the bank’s funds instead of your own, you will be charged interest on the money you spend – unless you pay off the entire debt within the interest-free period. If you pay the minimum monthly repayment, you will be charged interest. There are many different credit card options on the market, all offering different interest rates and reward options.

How to get a credit card for the first time

A credit card can be a useful financial tool, provided you understand the risks and can meet repayment obligations.

If you’re a credit card first-timer, review your options. Think about what kind of credit card would suit your lifestyle, and compare providers by fees, perks and repayments.

Once you’ve selected a card, it’s time to apply. Credit card applications can generally be completed in store, online or over the phone.

When you apply for a credit card for the first time, you must meet age, residency and income requirements. As proof, you must also provide documentation such as bank account statements.

How do you apply for a credit card?

You can apply for a credit card online, over the phone or in person at the bank. Once you’ve compared the current credit card offers, the application process is quick and easy. Before you get your application started, you’ll need to gather your personal information like proof of ID, payslips and bank statements, proof of employment and details of your income, assets and liabilities. To be eligible for a credit card, you’ll need to be an Australian citizen over 18 and earn a minimum of $15,000 each year. Once you’ve applied for a credit card, you should get a response fairly instantly. If your credit card application has been approved, you should receive a welcome pack with your new credit card within 10-15 days.

How do you cancel a credit card?

It’s important to cancel your old cards to avoid any additional fees. Unless you’re doing a balance transfer, you’ll need to pay the outstanding balance before you cancel your credit card. If you’ve opted for a card with reward points, make sure you redeem or transfer the points before you close your account. To avoid any bounced payments and save yourself an admin headache, redirect all your direct debits to a new card or account. Once you’ve done all the preparation, call your bank or credit card provider to get the cancellation underway. Once you receive a confirmation letter, destroy your card and make sure the numbers aren’t legible.

How do credit cards work?

Think of credit cards as a short-term loan where you use the bank’s money to buy something up front and then pay for it later. Unlike a debit card which uses your own money to pay, a credit card essentially borrows the bank’s money to fund the purchase. When you apply for a credit card, the bank assesses your income and assigns you a credit limit based on what you can afford to pay back. At the end of each billing cycle, which is usually monthly, the bank will send you a statement showing the minimum amount you have to pay back, including any interest payable on the balance.

Where can I get a credit card?

Looking to get your first credit card? You might be confused as to exactly where to go to apply for one. Here’s where to go when you are ready to put in that application.

The bank: Your bank is a great place to start, provided that you have a good banking history. Since you already have a financial history, you have more chance of your application being approved.

Credit card provider: Another option is to apply for a credit card directly from the issuer, such as Visa, Mastercard or Amex. This will most likely be an online application, so do your research and apply for a suitable card for your circumstances.

Major retailers: Coles, Woolworths, Myer and David Jones all have credit cards available. But watch out for the interest rate and annual fees – these cards are designed to help you spend more in store.

How to get a free credit card

There's no such thing as a free lunch. All credit cards come with associated costs when used to make purchases, even if it’s simply the cost of making repayments.

However, many lenders offer incentives for customers such as a $0 annual fee or 0 per cent interest on purchases during an introductory period. Additionally, paying off your balance in full during an interest-free period means you could only have to pay back the cost of purchases without interest. You could also be eligible for additional rewards such as cashback during that time, saving you more money.

How to get cash with just a credit card number

Banks and merchants usually will not allow you to access cash without a physical card, because doing so would open up opportunities for fraudulent activities. Even most non-cash credit card transactions (such as shopping online) require you to know the expiry date and CVV on your credit card in addition to the card number.

However, some banks offer cardless cash for transaction accounts. Using a secure app installed on your mobile phone, you can log onto an ATM and withdraw the money you need. This could be a practical and secure solution if you don’t have a card and need cash.

What is CVV on a credit card?

CVV stands for ‘card verification value’, and is also sometimes referred to as a CVC or card verification code.

A CVV code is usually needed when the card is used online or over the phone as an anti-fraud measure. Without the cardholder being physically present to sign or verify the purchase, the CVV provides an extra layer of protection. 

If you’re using Mastercard or Visa, the CVV is the three digits located on the back of the card. If you’re using an American Express, the CVV is usually four digits and is on the front of the card.

Do you need a credit card to get a loan?

You do not need a credit card to get a loan, but you usually need to have a credit history. Without a credit history, a financial institution cannot assess your ‘credit worthiness’, or your capacity to pay off the loan.

If you don’t have a credit card, your credit history can reflect any record of paying off an asset. Without any credit credit history, you’re limited in the type of loans you can apply for. But you may be able to obtain a secured loan against an asset. For more information on improving your credit score, go here

How to get a new credit card

To get a new credit card, generally you need to be at least 18 years old and have a good credit rating. You don’t need to be an Australian citizen. Usually you can apply online or in person at a branch of the card issuer. You’ll typically have to supply information like:

  • Your income and living costs (e.g. rent/mortgage, loan repayments, living expenses)
  • Your employer’s contact details
  • Details of your assets and any debts you are paying off

What is a credit card?

A credit card is a payment method which lets you pay for goods and services without using your own money. It’s essentially a short-term loan which lets you borrow the bank’s money to pay for things which you can pay back – potentially with interest – at a later date. Credit cards can also be used to withdraw money from an ATM, which is known as a cash advance. Because you’re borrowing money from a bank, credit cards charge you interest on the money you use (unless you repay the entire debt during the interest-free period). When you apply for a credit card, the bank gives you a credit limit which sets the maximum amount you can borrow using your card. Credit cards are one of the most popular methods of payments and can be a convenient way of paying for goods and services in store, online and all around the globe.

How long does it take to get a credit card?

There are a few stages you need to go through to get a credit card; each one takes a different length of time.

Applying for the card online, over the phone or in person is the fastest step. This usually takes around 15 minutes, provided you have all of your documents handy.

After submitting your application, it usually takes between one to 10 business days for the lender to assess your eligibility. Some lenders offer instant approval, although you will need to send supporting documents before it is official.

Once your application has been approved, expect to wait between one to 14 days to receive your card in the mail. Keep in mind that delays can happen during busy periods, such as if the lender has launched a special deal.

How to get money from a credit card

You can get money from a credit card, but generally it will cost you.

Withdrawing money from a credit card is called a cash advance, as it operates more as a loan than a simple cash withdrawal. Because it is a loan, you may be charged interest on your cash advance as soon as you make the withdrawal. Interest rates are also usually much higher for cash advances than standard credit card purchases.

In addition to the interest rate, you may also be charged a cash advance fee. This could be a flat rate, or a percentage of your total cash advance. If you are considering a cash advance, make sure to add up how much it will cost you before committing.

Can a pensioner get a credit card?

It is possible to get a credit card as a pensioner. There are some factors to keep in mind, including:

  • Annual income. Look for credit cards with minimum annual income requirements you can meet. 
  • Annual fees. If high fees are a concern for you, opt for a card with a low or $0 annual fee. 
  • Interest rate. Make sure you won’t have any nasty surprises on your credit card bill. Compare cards with a low interest rates to minimise risk.

What should I do if my ANZ credit card has expired?

Your ANZ credit card is considered expired only after the last day of the month and year marked on your card. For instance, if your card’s expiry date reads 03/22, it is valid until 31 March 2022 and expires on 1 April 2022. Typically, you should have received a new credit card by that date, and you won’t have to request a new card. 

Once you get the new card, you should remember to switch any automatic payments you have - such as a utility or mobile phone bill - from your expired credit card to your new credit card. Equally, if you are using CardPay Direct to repay your ANZ credit card debt, you may need to update the credit card account details for that service as well. 

In case the new card doesn’t arrive by the expiry date of your current credit card, you can call ANZ on 13 22 73 to find out the reason and if you need to request an expedited card. Please note that if you were planning to close your credit card account or request a credit card upgrade, you may need to call ANZ at least before the 25th of the month your current credit card expires in, as that’s when they may send you the new credit card.