Compare credit cards

Compare credit card rewards, rates, and balance transfers from the top banks.

By   |   Verified by David Boyd   |   Updated 10th August 2022

Comparing credit cards

Westpac Low Rate Cashback Credit Card

On Westpac's website

FeaturedNew offerApply by 31 October 2022

Westpac Low Rate Cashback Credit Card

Balance transfer

12 months at 6.99% p.a.

Purchase rate

13.74% p.a. ongoing

Annual fee

$59.00 p.a. ongoing

Highlights

  • Get up to $200 cashback when you apply online by 31 October 2022. $50 cashback will be awarded for every month $1000 or more is spent on eligible purchases for the first 4 statement periods from card approval. Terms and Conditions apply.
  • Low 13.74% p.a. interest rate on purchases.
  • $59 p.a. annual fee.

Pros

  • Get up to $200 cashback when you meet the criteria.
  • Low 13.74% p.a. interest rate on purchases.
  • $59 p.a. annual fee.

Cons

  • The cash advance rate for this card is 21.49% p.a.
NAB Low Rate Card

On NAB's website

Balance transfer

32 months at 0% p.a.

Purchase rate

12.99% p.a. ongoing

Annual fee

$0.00 for 1st year

Highlights

  • Enjoy 0% p.a. on balance transfers for 32 months with no balance transfer fee. Reverts to variable cash advance rate of 21.74% p.a. after the promotional period.
  • $0 first-year annual card fee ($59 p.a. thereafter).
  • Get a response in 60 seconds.

Pros

  • 0% p.a. on balance transfers for 32 months.
  • No balance transfer fee.
  • The waived annual fee for the first year.
  • Additional credit card is free.

Cons

  • No rewards program for this card.
  • No insurance coverage.
St.George Vertigo Visa

On St.George's website

Offer extendedApply by 31 August 2022

St.George Vertigo Visa

Balance transfer

32 months at 0% p.a.

Purchase rate

13.99% p.a. ongoing

Annual fee

$0.00 for 1st year

Highlights

  • Enjoy 0% for 32 months on Balance Transfers with a 0% balance transfer fee. Reverts to cash advance rate of 21.49% p.a.
  • 13.99% p.a. low variable interest rate on purchases.
  • $0 first-year annual card fee ($55 p.a. thereafter).

Pros

  • 0% p.a. for 32 months on balance transfers with no balance transfer fee.
  • 13.99% p.a. low variable interest rate on purchases.
  • $0 first-year annual card fee ($55 p.a. thereafter).

Cons

  • Balance transfer rate reverts to 21.49% p.a. after 32 months.
  • There are no rewards program for this card.
American Express Cashback Credit Card

On American Express' website

Balance transfer

N/A

Purchase rate

20.74% p.a. ongoing

Annual fee

$0.00 for 1st year

Highlights

  • When you apply online, are approved and pay $0 monthly fee for the first year (saving you $120). New Card Members Only
  • For every $ 1 spent, enjoy 1% cashback on all purchases excluding government bodies in Australia.
  • Enjoy Binge Basic subscription, valued at $10 per month.

Pros

  • $0 monthly fee for the first 12 months.
  • Complimentary Smartphone Screen Cover.
  • Free monthly BINGE subscription valued at $10/month.

Cons

  • Purchase rate is at 20.74% p.a.
NAB Qantas Rewards Signature Card

On NAB's website

Balance transfer

12 months at 0% p.a.

Purchase rate

19.99% p.a. ongoing

Annual fee

$295.00 for 1st year

Highlights

  • Earn up to 120,000 bonus Qantas Points. Receive 90,000 bonus points when you spend $3,000 in the first 60 days from account approval date and 30,000 bonus points when you keep your card open for over 12 months. Terms and conditions apply.
  • Enjoy 0% on balance transfers for 12 months with 3% Balance Transfer Fee.
  • Reduced first-year annual fee of $295 p.a. instead of $395 p.a. (saving you $100).

Pros

  • Complimentary Qantas Frequent Flyer membership fee valued at $99.50.
  • Six complimentary insurances when you make an eligible purchase.
  • Earn 1 Qantas Point per $1 spent on everyday purchases up to $5,000 per statement period then 0.05 pts per $1 spent thereafter (capped at $20,000).

Cons

  • Annual fee of $395 p.a. is quite high.
Westpac Altitude Platinum Credit Card (Altitude)

On Westpac's website

Balance transfer

24 months at 0% p.a.

Purchase rate

19.99% p.a. ongoing

Annual fee

$49.00 for 1st year

Highlights

  • Receive 110,000 Altitude bonus points when you spend $3,000 on eligible purchases within 90 days of card approval. Terms and conditions apply.
  • 0% p.a. for 24 months on balance transfers (1 % balance transfer fee applies). Reverts to cash advance rate of 21.49% p.a.
  • $49 p.a. annual fee for the first year ($150 p.a. annual fee thereafter).

Pros

  • 110,000 bonus Altitude Points when you spend $3,000 in 90 days.
  • 0% p.a. for 24 months on balance transfers.
  • Additional savings with the $49 first year annual fee ($150 p.a. thereafter).
  • Comes with complimentary travel insurance.

Cons

  • There is a 1% balance transfer fee.
  • Only up to 45 days interest-free on purchases.
Bankwest Breeze Mastercard

On Bankwest's website

Balance transfer

15 months at 0% p.a.

Purchase rate

15 months at 0% p.a.

Annual fee

$0.00 for 1st year

Highlights

  • Enjoy 0% p.a. on balance transfers for 15 months (0% BT fee, 9.90% p.a. thereafter).
  • 0% p.a. for 15 months on purchases (reverts to 9.90% p.a.)
  • First-year annual fee waiver. $49 p.a. thereafter.
  • New customers only. Limited time. Other fees and charges, T&Cs apply.

Pros

  • 0% p.a. on balance transfers for 15 months.
  • 0% p.a. for 15 months on purchases.
  • First-year annual fee waiver. $49 p.a. thereafter.

Cons

  • There are no rewards on this card.
American Express Qantas Ultimate Credit Card

On American Express' website

Balance transfer

N/A

Purchase rate

20.74% p.a. ongoing

Annual fee

$450.00 p.a. ongoing

Highlights

  • Receive up to 100,000 bonus Qantas Points. That’s 75,000 bonus Qantas Points when you apply online by 23 August 2022, are approved, and spend $3,000 on your new Card within the first 3 months. Plus, an additional 25,000 bonus Qantas Points in your second year upon fee renewal. T&Cs apply. New Card Members only.
  • Earn 1.25 Qantas Points for every $1 spent on card purchases, except spend at government bodies in Australia where you will earn 0.5 Qantas Points per $1 spent.
  • Get 2 complimentary Qantas Club lounge invitations each year.

Pros

  • Earn up to 100,000 bonus Qantas Points when you meet the criteria.
  • Excellent earn rates on everyday spend. Earns points on payments to the ATO.
  • Access to the American Express Lounge Sydney and Melbourne airport after your first card spend on the card for Qantas products and services each anniversary year.
  • 2 complimentary Qantas Club lounge invitations each year.
  • $450 Qantas Travel Credit each year (conditions apply).
  • Add cards for up to four family and friends at no cost.

Cons

  • The annual fee of $450.
  • There is no concierge service, even though it's a high end card.
  • Balance transfers are not possible.
  • Transactions in a foreign currency attract a fee.
Bankwest Zero Mastercard

On Bankwest's website

Balance transfer

34 months at 0% p.a.

Purchase rate

14.99% p.a. ongoing

Annual fee

$0.00 p.a. ongoing

Highlights

  • Pay no annual fee as long as you hold the card.
  • 0% p.a. for 34 months on balances transferred (2% balance transfer fee applies). Reverts to 14.99% p.a. thereafter.
  • Up to 55 days interest-free on purchases.
  • New customers only. Limited time. Other fees and charges, T&Cs apply.

Pros

  • There is no annual fee for as long as you keep the card.
  • The current balance transfer offer is extremely competitive.
  • Interest on purchases is comparatively low.

Cons

  • Balance transfers incur a one-off fee.
  • You cannot earn credit card points.
American Express Platinum Card

On American Express' website

Balance transfer

N/A

Purchase rate

N/A

Annual fee

$1,450.00 p.a. ongoing

Highlights

  • Receive up to 200,000 Bonus Membership Rewards Points That’s 150,000 Bonus Membership Rewards Points when you apply online, are approved and spend $5,000 on your new Card within the first 3 months. Plus, an additional 50,000 Bonus Membership Rewards Points in Year 2 upon fee renewal. T&Cs apply. New Amex Card Members only.
  • Receive a $450 Platinum Travel Credit each year, which can be redeemed for flights, hotels or car hire.
  • Enjoy up to $400 per calendar year when you dine from a curated collection of over 1,400 hand-selected restaurants both locally and abroad. Terms and Conditions apply.

Pros

  • Receive up to 200,000 Bonus Membership Rewards Points when you meet the criteria.
  • Receive a $450 Platinum Travel Credit each year.
  • Enjoy up to $400 Global Dining Credit per calendar year.
  • Get airport lounge access.

Cons

  • The annual fee of $1,450.
Bendigo Bank Low Rate Credit Card

Apply by 3 October 2022

Bendigo Bank Low Rate Credit Card

Balance transfer

20 months at 0% p.a.

Purchase rate

20 months at 0% p.a.

Annual fee

$45.00 p.a. ongoing

Highlights

  • 0% p.a. up to 20 months on purchases (reverts to 11.99% p.a.).
  • 0% p.a. up to 20 months in Balance Transfers (reverts to 11.99% p.a.).
  • Save with its low annual fee of $45 p.a. ongoing.
  • No fees for additional cardholders.

Pros

  • 0% p.a. up to 20 months on purchases.
  • 0% p.a. up to 20 months on Balance Transfers.
  • Low annual fee of $45 p.a.
  • No fees for additional cardholders.

Cons

  • There is a 2% Balance Transfer fee.
  • You can't earn credit card rewards.
  • No complimentary insurances.
The Low Rate Credit Card from American Express

On American Express' website

Balance transfer

N/A

Purchase rate

8.99% p.a. ongoing

Annual fee

$0.00 p.a. ongoing

Highlights

  • Enjoy a low 8.99% p.a. interest rate on purchases.
  • $0 annual fee for as long as you have the card.
  • Up to 55 days interest free.

Pros

  • Low 8.99% p.a. interest rate on purchases and $0 annual fee.
  • Comes with Card Purchase Cover and Card Refund Cover.
  • Up to 55 days interest free.

Cons

  • There are no rewards program for this card.
St.George Amplify Signature Credit Card (Qantas)

On St.George's website

Offer extendedApply by 31 December 2022

St.George Amplify Signature Credit Card (Qantas)

Balance transfer

24 months at 0% p.a.

Purchase rate

19.49% p.a. ongoing

Annual fee

$279.00 p.a. ongoing

Highlights

  • Earn up to 90,000 bonus Qantas Points when you spend $6,000 on eligible purchases within 90 days from card approval. Exclusions apply.
  • 0% p.a. for 24 months on balance transfers with 1% balance transfer fee on amounts transferred.
  • Includes complimentary overseas travel insurance for up to 6 months


From 1 January 2022, earn 0.75 Qantas Points per $1 up to a maximum of $250,000 spent on eligible purchases annually. Bonus Qantas Points not included in the cap.


Pros

  • The 90,000 bonus Qantas Points.
  • 0% p.a. for 24 months on balance transfers.
  • Includes complimentary overseas travel insurance for up to 6 months

Cons

  • There is a 1% balance transfer fee.
  • The ongoing annual fee is high at $279 p.a.
Westpac Altitude Platinum Credit Card (Qantas)

On Westpac's website

Offer extendedApply by 31 December 2022

Westpac Altitude Platinum Credit Card (Qantas)

Balance transfer

24 months at 0% p.a.

Purchase rate

19.99% p.a. ongoing

Annual fee

$99.00 for 1st year

Highlights

  • Receive 70,000 bonus Qantas Points when you spend $4,000 on eligible purchases within 90 days of card approval. Terms and conditions apply.
  • Transfer your balance at 0% p.a. for 24 months (1 % balance transfer fee applies). Reverts to cash advance rate of 21.49% p.a.
  • $99 p.a. annual fee for the first year then $200 p.a. annual fee thereafter (inclusive of $50 Qantas Rewards opt-in annual fee).


From 1 January 2022, earn 0.5 Qantas Points per $1 up to a maximum of $100,000 spent on eligible purchases annually. Bonus Qantas Points not included in the cap.


Pros

  • 70,000 bonus Qantas Points when you spend $4,000 in 90 days.
  • 0% p.a. for 24 months on balance transfers.
  • Additional savings with the $99 first-year annual fee ($200 p.a. thereafter).
  • Comes with complimentary insurance covers which include overseas medical and purchase security.

Cons

  • There is a 1% balance transfer fee.
  • Only up to 45 days interest-free on purchases.
Bank of Melbourne Vertigo Visa

Offer extendedApply by 31 August 2022

Bank of Melbourne Vertigo Visa

Balance transfer

32 months at 0% p.a.

Purchase rate

13.99% p.a. ongoing

Annual fee

$0.00 for 1st year

Highlights

  • Enjoy 0% for 32 months on Balance Transfers with a 0% balance transfer fee. Reverts to cash advance rate of 21.49% p.a.
  • 13.99% p.a. low variable interest rate on purchases.
  • $0 first-year annual card fee ($55 p.a. thereafter).

Pros

  • 0% p.a. for 32 months on balance transfers with no balance transfer fee.
  • 13.99% p.a. low variable interest rate on purchases.
  • $0 first-year annual card fee ($55 p.a. thereafter).

Cons

  • Balance transfer rate reverts to 21.49% p.a. after 32 months.
  • There are no rewards program for this card.
American Express Explorer Credit Card

On American Express' website

Balance transfer

N/A

Purchase rate

20.74% p.a. ongoing

Annual fee

$395.00 p.a. ongoing

Highlights

  • Receive 70,000 Bonus Membership Rewards Points when you apply online, are approved and spend $3,000 on your new Card within the first 3 months. T&Cs apply. New Amex Card Members only.
  • Receive a $400 Travel Credit each year towards any flights, hotels and car hire when you book online with this card.
  • Earn 2 Membership Rewards points per $1 spent on purchases except government bodies in Australia where you will earn 1 point per $1 spent (uncapped).

Pros

  • The 70,000 bonus Membership Rewards Points when approved and reach spend requirement within the first 3 months.
  • $400 travel credit every year.
  • Get 2 complimentary airport lounge passes per year.

Cons

  • The $395 p.a. annual fee.
MONEYME Freestyle Virtual Card

Balance transfer

N/A

Purchase rate

14.99% p.a. ongoing

Annual fee

From $0.00 p.a. ongoing

Highlights

  • Use virtual card instantly once approved (typically within 60 mins)
  • Tap n Pay with up to 55 days interest free
  • Use credit to transfer money to anyone
  • Exclusive perks & many more features
  • Thousands of 5-star customer reviews

Bank promo

  • Get MONEYME's lowest advertised rate EVER of 14.99% p.a.
  • Annual fee of $0 to $149 p.a. based on credit limit plus a monthly fee of $5 for balances over $20.
  • Be eligible for deals and credit back offers at over 1,400 participating stores thanks to MONEYME Perks, powered by Cashrewards. Terms and conditions apply.

Pros

  • Available to use immediately after approval.
  • Money can be transferred to your bank account.
  • Get cashback at participating stores with Cashrewards.

Cons

  • The maximum credit limit is comparatively low.
  • Combination of annual and monthly fees can be quite expensive for the highest credit limit.
  • There is a 1.5% withdrawal fee.
Qantas Premier Platinum Credit Card

Apply by 29 September 2022

Qantas Premier Platinum Credit Card

Balance transfer

18 months at 0% p.a.

Purchase rate

19.99% p.a. ongoing

Annual fee

$225.00 for 1st year

Highlights

  • Receive 80,000 bonus Qantas Points when spending $3,000 or more on eligible purchases within 3 months of approval.
  • Enjoy 0% on Balance Transfer for 18 months with a 1% Balance Transfer fee. Reverts to Cash Advance rate, thereafter. No interest-free days apply on retail purchases while you have a balance transfer.
  • Save with the reduced annual fee of $225 p.a. for the first year. Ongoing annual fee of $299 p.a. applies in the 2nd year.

Pros

  • The 80,000 bonus Qantas Points (Terms and Conditions apply).
  • 0% p.a. for 18 months on balance transfers.
  • Additional savings with the $225 first-year annual fee ($299 p.a. thereafter).
  • Comes with complimentary travel insurance.

Cons

  • There is a 1% balance transfer fee.

Overview

Not sure how credit cards work or if you should get one? Read on for more details on what they are, how they work, what types of card exist, and tips to get the most out of them.

What is a credit card?

A credit card is a small, rectangular piece of plastic that confers on its owner the ability to borrow money from a bank (or other lender) to use when paying for goods and services. Even if you choose to pay with your mobile device, most banks still need to send you that piece of plastic – for now.

Credit cards are useful if you don't have enough money to pay for something now because you can pay it off over time with interest. In addition, many credit cards come with additional benefits such as earning rewards, access to airport lounges, and cash back. Using your credit card responsibly can also improve your credit score over time.

How do credit cards work?

Credit cards are generally used to buy everyday items and pay bills. Rather than using your own funds, as you would with a debit card or cash, purchases made with a credit card draw on a line of credit made available to you by whatever bank issued the card.

The amount you can spend with a credit card depends on your credit limit, which is determined by the issuer during the application process (although you can request it to be raised later). If you repay the balance in full each month, you will not pay interest. If you choose to pay off part of the balance, you will be charged interest.

So-called "no interest credit cards" are the exception to the rule. These cards charge a monthly fee rather than interest and are seen as being a compromise between buy now pay later and a typical credit card.

What types of credit card are there?

There are credit cards to suit the lifestyle and spending patterns of a wide variety of cardholders. These are some of the most popular types.

  • 0% purchase credit cards: No interest is charged on purchases for an introductory period, so the carried-over balance is interest free until the introductory period is over. Often used to finance large purchases.
  • Balance transfer credit cards: Special introductory interest rate (often 0%) for a specified period, on balances transferred from other cards. Used by many to reduce interest and get out of debt.
  • Low interest credit cards: Cards whose interest rate on carried-over debt is at the lower end of the scale. More recently, no interest credit cards have come to market with a monthly fee instead of interest.
  • No annual fee credit cards: Cards with $0 annual fee. These are generally no-frills and offer no benefits or perks.
  • Rewards credit cards: Loyalty points, redeemable for rewards, are earned when purchases are made. Frequent flyer credit cards earn points into an airline's reward program, redeemable for flights or rewards.

What to look for when you compare credit cards

When you compare credit cards, there are a number of rates, fees, and charges to be aware of and compare.

  • Annual fees. Many credit cards, especially those awarding rewards points on purchases and/or conferring complimentary benefits (e.g. free travel insurance), charge an annual fee. The fee can be anywhere between $30 and $1,500 or more, depending on the points and benefits attached to the card. However, some cards have no annual fee.
  • Credit limit. All credit cards come with a credit limit, typically anywhere between $1,000 and $100,000. The card’s limit is based on the cardholder’s annual income and the bank’s assessment of their creditworthiness and ability to repay the amounts borrowed. Once the card’s credit limit is reached (that is, once the total amount owing on the card is equal to the credit limit, or when the difference between the credit limit and the amount owing is less than the amount of an attempted new purchase), no further purchases can be made with the card until some of the balance owing has been repaid. If you think your credit limit is too low, you can apply to the bank to increase your credit limit once you have had the card for a while and managed it responsibly, by making at least the minimum repayment on time every month and paying off large parts of the balance on a regular basis.
  • Introductory interest rates. Many credit cards have an introductory interest rate on balance transfers and / or purchases. Introductory rates are generally 0% and are usually reserved for new customers only. Check what the rate will revert to when the introductory rate ends.
  • Ongoing purchase interest rates. Credit card interest rates (charged on carried-over debt and also on new purchases where there is existing carried-over debt) are typically higher than the rates for other forms of borrowing, such as home loans and personal loans – in some cases very much higher. Credit card interest rates in Australia mostly fall in the range 10% p.a. to 22% p.a., although there are a few cards with rates lower and higher than this range.
  • Cash advance rates. If you use your credit card to make a cash withdrawal from your credit card account (either over-the-counter or via an ATM), check what the interest and fee will be. Interest will usually be charged from the withdrawal date until the repayment date, even if there is no carried-over debt on the account. Additionally, many cards have a cash advance interest rate that is higher — often by as much as 2% p.a. – than the interest rate charged on purchases. A one-off fee also usually applies.
  • Interest-free period. The due date for repayment usually falls between 14 and 25 days after the end of the monthly billing cycle. For this reason credit cards are often described as having ‘up to 44 days interest free’ or ‘up to 55 interest-free days’.
  • Repayments. On a due date specified by the bank, the credit card owner can choose whether to repay in full the accumulated balance of their purchases for the month, or make only a minimum repayment (typically 2% or 2.5% of the balance, or a fixed amount such as $5) and pay interest for continuing to borrow the remaining balance.
  • Sign up bonus. Many issuers offer a welcome bonus for signing up, but terms apply. Check how much you will have to spend and within what period in order to get the bonus.

Learn about credit cards

If you've got questions about credit cards, we've got all the tips you'll need to make a better choice.

  • FAQs

  • Glossary

  • Pros & cons

  • Tips

What does APR mean?

APR’ means Annual Percentage Rate. Interest on carried-over credit card balances, and on new purchases if you already have a carried-over balance, is actually calculated daily and charged monthly. The APR is the equivalent rate expressed as an annual figure.

Will the interest rate on my credit card always stay the same?

No. Credit card interest rates are variable and can change at any time. And special introductory interest rates on balance transfers and purchases always have an expiry date, at which point the revert rate (the standard rate for purchases or cash advances) comes into play.

What’s the best way to compare credit cards?

First of all, decide which type of credit card would work best in your current circumstances, based on your income, lifestyle and spending pattern. For example, if you don’t expect to regularly pay off your purchases balance in full, it wouldn’t make sense to choose an expensive rewards card with a high interest rate, because the annual fee and interest costs will be far higher than the value of any rewards you could earn. But if you travel a lot and intend to clear your balance every month, a frequent flyer points card with free travel insurance and airport lounge passes might work well for you.

So narrow your choices down by deciding on which card features are most important for you. Your ideal card may have one or more of the following features:

  • 0% purchase introductory offer period
  • Balance transfer introductory offer period
  • Rewards points
  • Frequent flyer points
  • Sign-up or first purchase bonus points
  • Ongoing low interest rate
  • No or low annual fee
  • No foregn transaction fees
  • Complimentary benefits for travellers and/or shoppers
  • Available with Google Pay, Apple Pay or Samsung Pay

Once you’ve narrowed your choice by deciding which type, or types, of card will suit you best, you can compare their interest rates, annual fee, points earning rates (if any) and complimentary benefits (if any), to see which one is offering the best deal.

What if I have a low credit score, or no credit score?

If you have a low credit score, or no score because you’re a recent arrival in Australia, or a student, or someone starting their first job, you’re not going to qualify for the best credit card deals. Your choice may be limited, and you may be offered a low credit limit and a high interest rate. But there are credit cards specially designed for beginners and low credit scores.

By using one of these ‘starter’ cards responsibly (i.e. always repaying your purchases balance in full and trying to avoid maxing out your credit limit), you will build up your credit score over time and become eligible for better deals.

Are there any penalties for missing a repayment, or paying late?

Yes. If you fail to make at least the minimum repayment (usually a small percentage of the balance owing, or a small fixed amount) on or before the payment due date, you may be hit with a penalty fee of between $5 and $35 per event. You could also risk having a promotional deal, such as an introductory interest rate, cancelled. Avoid this by setting up a direct debit for an amount that will at least cover the minimum repayment.

How can I apply for a credit card?

You can apply in person at a branch of the credit card provider (e.g. at a bank), by mail or by telephone. But the easiest and quickest way to apply is online, which you can do right here by clicking the ‘Application’ button next to your chosen card.

Annual fee

The amount charged once every 12 months, on the card anniversary, as an account-keeping fee.

APR

Annual Percentage Rate. The interest rate applied to carried-over credit card balances, or to new purchases where there is an existing balance, or to cash advances, expressed as an annual rate (although it is calculated daily and charged monthly).

Balance transfer

An amount of debt transferred from an existing credit card or store card to another card held by the same cardholder.

Balance transfer fee

A fee charged by a card provider when transferring a balance from a card issued by another card provider onto a card it has itself issued. This fee is sometimes waived.

Cash advance

Withdrawal of cash from a credit card account, either over-the-counter or at an ATM. Buying foreign currency or traveller’s cheques, and in some cases gambling transactions, will be considered a cash advance.

Charge card

A payment card that works like a credit card in many ways, except that there is no fixed credit limit and no option to carry a balance from month to month – it must be repaid in full every month.

Credit score

A numerical expression of a person’s credit history, based on the information in a credit report collected by a credit bureau. The higher the number, the better the score.

First purchase bonus points

A large number of rewards points or frequent flyer points granted as an incentive to a new cardholder in return for meeting a spending target within a specified period (e.g. $5,000 in the first 90 days of holding the card).

Frequent flyer points

Air miles or points earned on credit card purchases if the card is eligible for the airline loyalty program. Points can be exchanged principally for flights and seat upgrades, but also for, for example, merchandise from an online catalogue, gift cards, cashback, travel and accommodation, movie tickets and other entertainment experiences.

Interest-free days

The days that elapse between the date of a purchase transaction and the date on which repayment must be made before interest charges are levied, where the card account is not carrying an unpaid balance from the previous month.

Introductory interest rate

A low or zero interest rate on balance transfers or purchases, offered for a specified number of months as an incentive to new cardholders.

Minimum payment or Minimum repayment

The lowest amount accepted by the card provider each month as a repayment, usually expressed as a percentage of the balance (e.g. 2%) or a fixed amount (e.g. $5), or both (i.e. whichever is greater).

Penalty fee

An amount charged by the credit card provider in the case of a missed payment, or a late payment, or a transaction which causes the cardholder to exceed their credit limit.

Rewards points

Loyalty points earned on credit card purchases if the card is eligible for the rewards program. Points can be exchanged for, for example, merchandise from an online catalogue, gift cards, cashback, frequent flyer points, travel and accommodation, movie tickets and other entertainment experiences. Some rewards points come directly in the form of frequent flyer points.

Sign-up bonus points

A large number of rewards points or frequent flyer points granted as an incentive to a new cardholder in return for making an approved card application.

Borrow money for free

A credit card is a way of using the bank’s money for free, potentially for up to eight weeks, provided you repay your balance in full by the payment due date.

Build your credit score

Using a credit card responsibly is a way of building up your credit score so that you can get a better deal for other financial products, such as a home loan. Alternatively, if you don’t use your credit card responsibly you risk damaging your credit score.

Convenient way to track your spending

If you use your credit card for every possible purchase and bill payment, your credit card statements become a great way to track your expenditure for budgeting purposes.

Easy to use

A credit card is a fast and convenient way of making payments.

Improper use can lead to deeper debt

If you don’t pay off your purchases balance every month, you risk becoming trapped in a debt spiral, especially if you make only the minimum repayments and the card has a high interest rate.

It may be more eniticing to to spend

For some people, having a credit card in their pocket is a temptation to spend money they don’t actually have on things they don’t really need.

Rewards for using your card

Many credit cards come with valuable extra benefits, like rewards points, frequent flyer points, free insurance, airport lounge access, free flights, cashback and more.

Safer to carry than cash

Paying with a credit card is more secure than carrying cash, provided you take normal precautions.

Your spending should pay for the annual fee

Credit cards with a high annual fee can work out to be expensive if you don’t earn enough rewards points and/or make enough use of complimentary benefits to offset the annual fee.

How to make the best use of a credit card

Plan to pay off your purchases balance in full every month, on or before the due date, and avoid taking cash advances. This means that you’ll never pay any interest charges. Setting up a direct debit from your bank transaction account, so that you never miss a payment, is a good idea.

If you can’t pay off all of your balance, always pay off as much as you can afford.

Choose a credit card to suit your spending pattern, income and lifestyle

Compare card features to get the best deal to suit the way you spend your money. E.g.

  • You travel interstate or overseas regularly? Choose a frequent flyer or rewards card.
  • You won’t be paying off your purchases balance in full every month? Choose a low interest card.
  • You have a large balance on your existing card and/or need to consolidate your debts? Choose a balance transfer card.
  • You’re planning a major purchase? Spread out the cost over several months with a 0% purchase card.
  • You’re on a tight budget? Choose a low annual fee card.

Take note of all the benefits attached to your premium card

To make the most of a premium card, make sure you’re aware of all its complimentary benefits, such free travel insurance, free flights, travel booking credits, free airport lounge access, extended warranty cover, purchase and price protection, rental vehicle excess waiver, reserved or early access seating for sports and entertainment, smartphone screen replacement and personal concierge service. Being aware of your card’s benefits, and using them, can save you heaps of money. But don’t forget to read the small print (available in online Product Disclosure Statements) to make sure that you know how to qualify for the benefits and what the limitations are.

Things to be aware of when using your card overseas

  • Some cards have high foreign currency transaction fees – a surcharge of as much as 3.5% of the transaction amount in some cases – so if you travel overseas frequently you might want to consider a ‘No Foreign Transaction Fee’ credit card.
  • If you don’t travel overseas regularly but then take an overseas trip, you might trigger a suspicious transaction alert and card suspension when your bank spots a rash of overseas purchases. Tell your bank about your travel plans in advance.
  • If your card comes with complimentary overseas travel insurance, plan to use it to save money, but read the small print first to make sure that it’s suitable for your needs and that you meet the activation conditions.
  • Avoid Dynamic Currency Conversion. That is, if an overseas merchant offers to let you pay with your credit card in Australian dollars, politely decline the offer and ask for the credit card charge to be made in local currency instead. That’s because the exchange rates used for Dynamic Currency Conversion are highly unfavourable for the cardholder.
  • Make a note of the emergency contact details – by phone or online – for your credit card provider (in case your card is lost or stolen) and any complimentary insurance cover.

Don’t apply for multiple cards at once

Every time you make an application for a new credit card, a note is made in your credit history file, and your credit score will go down slightly. So if you make a lot of applications at the same time, you not only risk losing quite a few credit score points, you may also trigger some suspicion among card issuers: ‘Is this person in a difficult financial situation, and therefore a risk?’.

So do your homework before you apply (comparing cards online has absolutely no impact on your credit score) and only apply for one card at a time.

Take precautions against fraud

Credit card providers have robust systems for preventing fraud, and monitor transactions to look for anything suspicious. They also offer varying levels of ‘no liability’ fraud protection to cardholders. This means that your liability is either zero or very low (e.g. $50) if you do become a victim of credit card fraud, provided that you have not contributed to the fraud in any way. In practice this means that you should:

  • Keep your card in a safe place.
  • Notify the bank immediately if it is lost or stolen. (Some online banking systems and mobile apps have an option to put a temporary hold on the card if you misplace it, but don’t wait too long before alerting the bank if it doesn’t turn up.)
  • Never give your card’s PIN to anyone else.
  • Memorise your PIN, or, if you must record it, don’t keep the record in a place that could be lost or stolen along with the card.
  • Check your statements regularly to make sure that there are no transactions you didn’t authorise.