How to find Australia’s top credit cards
The only way to find the top credit card for you is to carry out a comprehensive credit card comparison.
Here’s how to compare the top credit cards:
- Ask how you plan to use your card – For everyday shopping? For major purchases only? For buying overseas or travel? To transfer an existing balance?
- Compare interest rates – Remember that different rates may apply for credit card purchases, cash advances and balance transfers. Also, beware of introductory, promotional, or “honeymoon” rates.
- Compare interest-free periods – See how long you’ll have to pay back your purchases before you’re charged credit card interest.
- Compare credit card rewards and extras – Some credit cards reward programs may let you earn points on your everyday spending, while other cards offer extras such as travel insurance.
- Compare fees and charges – Find out if there are any extra costs, such as annual fees, or charges for overseas purchases, and consider whether the credit card’s benefits would likely be worth these costs.
You can compare hundreds of different credit cards in Australia, so it’s important to consider what you want from your credit card to make sure you select the top credit card options for your personal finances.
The different types of credit cards
Of the wide range of card types available, some of the most popular credit card types include:
- Low rate credit cards
- Low fee credit cards
- Balance transfer cards
- Rewards credit cards
- Frequent flyer cards
There's no shortage of cards to include in your credit card comparison. Your top credit card choice will ultimately depend on what you want to use your card for, and the perks you'll receive whenever you do.
While these are some of the main credit card categories to consider, there are also other variables to consider. For example, if you regularly use your credit card overseas, then this is something you should factor into your credit card comparison.
How to make a credit card comparison
Compare credit card interest rates
A credit card is effectively a flexible personal loan or line of credit – every time you spend money on a credit card, you’re borrowing money from the provider, and if you don't repay this amount on time, then you will be charged interest on your balance owing.
When you compare credit card rates, remember that your credit card’s interest rate (sometimes called annual percentage rate or APR) may not be the same. Some credit cards charge different interest rates for purchases, for cash advances, or for balance transfers.
When you carry out a credit card comparison, make sure you take into consideration any introductory rates that are on offer. Some companies will offer a low rate credit card as a promotion when you first open the account, whose “honeymoon rate” then reverts to a higher interest rate after the introductory period expires.
Compare credit card fees
If you’re looking for cheap credit cards, remember that it’s not just the interest rates you’ll need to look out for, but the fees as well. Credit cards that charge monthly or annual fees are often (but aren’t always) credit cards that also offer rewards.
Most of the time, there are some major trade-offs to make when choosing a credit card. If you want a card with a low interest rate because you don’t always pay your card off, then it’s unlikely this card will also offer rewards. You’ll also find that the credit cards that offer rewards, frequent flyer points or other perks generally come with higher rates and annual fees.
While you may not be able to “have it all” with the one credit card, if you choose your priorities wisely, you may be able to find some of the best credit card offers for you by making a credit card comparison.
Compare rewards credit cards
If you plan on using your credit card on a regular basis, then it might be worth considering a rewards credit card. Many of the biggest providers will give cashback on selected purchases, or allow you to earn points on your spending that can be used in selected stores.
To find the best credit card deals with rewards, consider how you plan to use your card and how closely this matches with the card’s rewards program. For example, if you regularly use your credit card at a local supermarket, you may want to consider a credit card that lets you earn points that can be redeemed at these shops.
One of the most popular types of rewards credit cards are those that offer frequent flyer points. Frequent flyer credit cards award points based on the amount you spend, which can then be built up and eventually spent on flights and upgrades with major airlines. If you make regular plane trips for work, to visit family, or because you love to travel, you may want to make a frequent flyer credit card comparison.
If you are interested in rewards credit cards, then be sure to read their terms and conditions. As with any financial product, it's a good idea to be fully aware of what you are signing up for well in advance. The best credit cards for points will offer rewards that suit your spending style without charging too much in fees.
Compare balance transfer credit cards
If you already have a credit card and you’re looking for a way to clear the outstanding balance owing, you may want to conduct a credit card comparison to find the best credit card balance transfer deals. Many balance transfer credit cards charge no interest on the balance you transfer from your old credit card for a limited time, so you can concentrate on clearing your debt without worrying about extra interest charges from building up. Just remember that you’ll still be charged interest on new purchases.
Choosing your next credit card
No matter what you want from your credit card, it's important to carry out an interest rate comparison and see which credit card options are out there. If you need more information on what's available, then be sure to read the RateCity Credit Cards Guide for more insight into different credit card types, as well as handy tips to help find the top credit cards for your specific requirements.