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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

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.

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 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.

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 is a balance transfer credit card?

A balance transfer credit card lets you transfer your debt balance from one credit card to another. A balance transfer credit card generally has a 0 per cent interest rate for a set period of time. When you roll your debt balance over to a new credit card, you’ll be able to take advantage of the interest-free period to pay your credit card debt off faster without accruing additional interest charges. If your application is approved, the provider will pay out your old credit card and transfer your debt balance over to the new card. 

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.

Should I get a credit card?

Once you've compared credit card interest rates and deals and found the right card for you, the actual process of getting a credit card is quite straightforward. You can apply for a credit card online, over the phone or in person at a bank branch. 

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.

Does ING increase credit card limits?

You may want to increase your credit card limit for many reasons, such as having access to more spending money. However, if you are using the Orange One credit card issued by ING, you may not be able to do so. 

ING customers can choose a credit limit of their preference when applying for the Orange One credit card. Depending on your financial situation, this limit can be anywhere between $1,000 and $30,000. If you qualify for a Rewards Platinum card, the minimum credit card limit will likely be $6,000. 

Ideally, you should set your credit card limit knowing how much you can afford to repay each month and keep your expenses lower than this level. With most credit cards, you should have the option of requesting a credit card limit increase at a later time, although you will need to qualify for any increase. With an ING credit card, limit increases are out of the question (at the time this was published), which means you may want to apply for a higher credit card limit from the beginning. Remember that you have the option of decreasing your ING credit card limit at a later time.

Can I transfer money from my American Express credit card to my bank account?

If you’re an American Express credit card customer, you may not be able to transfer money from your credit card to your bank account. However, you may be eligible for cash advances, which involves withdrawing money through an ATM. 

To qualify for a cash advance, you’ll likely have to enrol for American Express Membership Rewards. Consider checking your online credit card account to see if you can withdraw a cash advance and, if so, the fees and charges you’ll incur for this transaction. 

You should remember that cash advances are different from balance transfers, which were available with some American Express credit cards earlier. Balance transfers allow customers to consolidate debt from high-interest credit cards to a credit card offering a lower interest rate. If you only recently applied for an American Express credit card, balance transfers may not be available irrespective of the card you own. 

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 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 to pay a credit card

There are a few ways to pay a credit card bill. These include:

  • BPAY - allows you to safely make credit card payments online.
  • Direct debits - set up an automatic payment from your bank account to pay your credit card bill each month. You can choose how much you want to pay of your credit card bill when you set up the auto payments.
  • In a branch.
  • Via your credit card provider's app.

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 I apply for a BOQ credit card limit increase?

If you’re an existing BOQ customer, you can request a BOQ credit card limit increase over a phone call. However, you should remember that owning and using a credit card is a matter of financial responsibility, so it might be worth thinking this decision through. 

When requesting a credit card limit increase, you’ll need to be just as responsible in terms of how much you earn and can set aside to repay the outstanding card balance. A credit card company may approve a credit limit increase only if you can show that you have either the income or the disposable income, which is the amount you have left after all expenses have been paid out.

For this purpose, you may need to submit your latest income documents and bank statements for an increase. You may want to estimate how much you usually have left after deducting your expenses, and then use this amount to try and convince the credit card company. Also, you may prefer to pay off the card balance in full each month and thus avoid paying interest on the card, helping you back up any claims of financial responsibility, as well. 

Remember that you may not be able to apply for a credit card limit increase beyond any limitations on the type of card you own. For instance, if you own a card whose ceiling is $10,000, and your current limit is $5,000, you won't likely be able to apply for a $10,000 credit card limit increase.

What's the best credit card for rewards?

There is no one-size-fits-all best rewards credit card. It's best you research what type of rewards program you'd like, as well as the fees, interest rate and conditions associated with those types of cards before making a choice. 

Rewards credit cards can also come with high annual fees that may end up nullifying the rewards, so think how often you use the card to decide whether the benefits outweigh the extra cost for you. A card with a lower annual fee might require a lot of spending to get any useful rewards, while another card with a higher annual fee might need fewer purchases to get a reward. 

How can I increase my Bankwest credit card limit?

When you apply for a Bankwest credit card, you get assigned a pre-set credit limit, which will end up being the most that you can spend on your credit card before having to pay it off. Your credit limit is chosen for you and your current financial situation, and you should remember not to overspend, irrespective of the limit, in order to avoid racking up a massive bill.

However, banks and lenders understand that your needs will change, and have made it possible for you to increase your credit card limit, allowing you to get extra cash when you need it most. Moreover, with a higher spending limit, you may be able to get access to certain perks and benefits with your Bankwest credit card.

To increase your Bankwest credit card limit, you can visit any of the bank’s branches or call 13 17 19 and follow the steps outlined.

Which credit card has the highest annual percentage rate?

The credit card market changes all the time, so the credit card with the highest annual percentage rate is also liable to change.

Keep in mind that credit card interest rates are expressed as a yearly rate, or annual percentage rate (APR). A low APR is generally good but also consider:

  • There can be different APR's for each feature of the card (e.g. purchases may have an APR of 14 per cent, while cash advances on same card could have an APR of 17 per cent.
  • Credit cards with a variable rate can change throughout the year, affecting your APR, so check the full details.
  • If you pay your balance in full every month, having the lowest APR is not as important as the other fees associated with the card. However, if you carry a balance from month to month, then you want the lowest APR possible.

How to make a credit card online

If you’re wondering about how to make a credit card online application, here are some steps to follow:

  • Test the market. Many credit card options are available online. Compare providers by fees, interest and perks to ensure you’re getting the best deal.
  • Complete the application. Once you’ve selected a card, head to the provider’s website and complete the online credit card application form. Forms vary by providers.
  • Provide details. Most cards require you to meet age, residency, income and credit status condition, and you need to provide details like a bank account statement to prove this.
  • Review details. Ensure the information you’ve entered is correct.