You can save thousands on interest every month by comparing some of Australia’s leading credit cards
What kinds of credit cards are out there?
Australians can get a whole range of credit cards that combine convenience with a selection of rewards and features. The major credit card companies in the Australian market are Visa and MasterCard. Banks or credit unions usually issue these credit cards. American Express (AMEX) and Diners Club also offer credit cards themselves direct to Australian customers (not through a bank, though banks can offer AMEX and Diners Club.)
Credit cards fall into five major categories: Low Rate Cards, Low Fee Cards, Premium Cards, Rewards Cards and Frequent Flyer Cards. Some banks issue credit cards as Balance Transfer cards, which means a new bank or lender takes on your balance from another lender. This is ideal if your new credit issuer is offering a lower rate, lower fees, or a combination of the two. Balance Transfers are not a category of cards themselves, as they can be any one of the five categories listed above. With this in mind, you can start to compare features and rates.
What sort of credit card is right for me?
With any financial product, you need to factor more than one aspect of a credit card to figure out if it’s right for you. The best method is to figure out how much you intend to spend on your card, whether the cost of an annual fee gives you enough benefits for the price, if you want rewards such as discounts or frequent flyer points, and your current financial situation in terms of income and outstanding debts.
This should give you a good basis to make a shortlist of credit cards that are right for you. For example, if you use your credit card to make purchases for frequent flyer points, one with this feature is best. If you need a credit card and want to defer payment of purchases in an interest free period, this may be more attractive to you. A lower rate overall is better for people who only use credit cards in emergencies. A premium card may have exclusive rewards and a higher credit limit, but you will have to pay more in annual fees. It’s all up to your values, preferences and financial needs.
How can I compare credit cards?
Comparing credit cards was once a time intensive task, requiring you to find brochures and make inquiries at various banks and credit lenders. We brings you credit cards from some of Australia’s biggest and most trusted credit card companies and banks so you can make a side-by-side comparison. Easy to use, you can select and compare credit cards with low rates, low fees, rewards programs, frequent flyer programs and premium cards. Our cards come from a variety banks and credit unions using Visa, MasterCard, AMEX or Diners Club.
You can choose cards with a rate or rewards program that suits you, or your proposed level of spending. Find cards with interest free periods on purchases, enhanced frequent flyer points and more. No matter what you prefer, we present the best selection of credit cards so you can get the balance of rewards and rates right.
Your common credit Card questions answered
Our experts answer all your most common questions about credit cards here
What is a balance transfer?
A balance transfer is the act of switching an existing credit card to a new provider, who also takes on the outstanding balance. This may incur a fee. Many credit card providers offer interest free or low-interest periods to entice customers – be aware the full rate will kick in after that time.
What is a premium credit card?
A premium credit card is a card that has a high amount of features and higher credit limit. These are usually expressed as “Silver, Gold, Platinum or Black” cards, indicating their level of benefits. In exchange for a comprehensive rewards program or frequent flyer points, users typically pay a higher annual fee than other credit cards. These cards may also have slightly higher interest rates.
What does “interest free purchases” involve?
Every purchase on a credit card will attract interest, however some credit card products offer interest free days on purchases – usually expressed in days. (45 days, 55 days, etc.) You must pay the balance in that time before the purchase attracts interest.
What is a “cash advance rate?”
A cash advance is using your credit card to withdraw money from your credit account via an ATM, buy foreign currency or traveller’s cheques, or using your credit card to pay for gambling products. This usually involves a fee and higher interest rate.
What is an introductory rate?
An introductory rate or “honeymoon” rate is a discounted interest rate offered by credit card companies to attract new customers. Once this introductory period expires, you pay the full interest rate.
How does a credit card company approve me for a card?
A credit card company will run a credit check on you to determine if you are eligible to take up their credit card offer. Other banks or lenders may need proof of income and assets before they consider your application.
What is a “credit rating?”
Your credit rating or credit history is a report detailing your requests and applications for credit products. It also records any defaults, which can negatively affect your financial standing. This provides banks and lenders a quick check to determine if you are at risk of default.
What is a default?
When a credit cardholder fails to pay back the minimum amount on their bill or miss a payment on a loan or other credit product. Your credit history records all defaults, which negatively affects your rating.
I have been pre-approved. What does that mean?
This mean a bank or lender has qualified you at a certain risk level using existing data (they have not conducted an official credit check at this point) and are offering you a certain credit limit for a specific credit card. This does not guarantee approval.
What is a credit limit?
The maximum amount you may spend on your credit card before you have to pay off some of the balance. Your credit limit is determined via a combination of looking at your credit history, asset levels, and income. You can apply to increase or decrease your credit limit once every six months.
Helpful guides to making the most of your credit card
Read our expert guides to make the most of your credit card comparison
How can I save on credit card interest?
There are two sure-fire ways to save on credit card interest; opt for a low-rate credit card and pay off more than the minimum each month. A low-rate credit card with interest free days will save you on interest on each purchase. However, interest will accrue if you do not pay the card off in full and on time. The next tip is to pay more than the minimum on your card.
A $2,000 balance at 18% interest with a minimum of $41 means you’d pay $5,691 over 18 years! Making monthly repayments of $100 would save you $3,330 in interest.
Visa or MasterCard?
Although most locations accept both without incurring extra fees, differences creep in as to what banks offer which credit cards. Commonwealth Bank only issues MasterCard, while the other big three offer both. The battleground is in rewards and frequent flyer points, as both credit companies offer different perks. For example, Visa may have access to preferred seating at a sports tournament while MasterCard holders can buy earlybird tickets to a concert while the other cardholder cannot and vice-versa. They may give you frequent flyer points for different airlines. It’s mostly what you value in terms of rewards.
Premium credit cards
Premium credit cards are indeed the “top of the range” in credit cards, offering the highest credit limits and most benefits. Rankings begin at Silver or Gold at the bottom end, with Platinum, Black or Diamond at the higher end. Platinum credit cards offer complimentary insurance, purchase protection, access to fine dining or exclusive events and at Black levels, on-call concierges available 24/7! Of course, this means a much higher interest rate and annual fee compared to regular credit cards.
Making the most of a balance transfer
If you’re considering a balance transfer into a new card and a new rewards program, you should make a decision based on what is right for you and your financial situation. To make the most of your balance transfer, you should aim to pay off the original balance with the new card as quickly as possible. Many balance transfer cards offer low or zero interest on the balance for a limited time. If you can pay off that balance before expiry, you could save thousands of dollars on interest.