InfoChoice guide to choosing a credit card

There are hundreds of different credit cards available in Australia, all offering different features, functions, rates, fees and charges.

How could anyone possibly know how to choose the best credit card in Australia for their own needs?

The first step is performing a credit card comparison and working out which financial institutions offer the the best credit cards in Australia currently and what are the most important features you require from your credit card.

Do you want to reduce an existing balance? If so, look at balance transfer cards.

If you’re looking for lots of rewards and perks, then a frequent flyer, platinum or black card might be the way to go.

If you’re looking for a simple card that will help you to manage your expenses throughout the year, then a low rate or a low fee credit card might work.

If you need assistance running your business cash flow, look for business credit cards.

How to compare balance transfer credit cards

Balance transfer credit cards are useful to anyone looking to reduce or clear an existing credit, store or charge card debt in a shorter timeframe than their current interest rate allows them to.

These cards offer users a period of zero per cent interest, which gives them the chance to reduce the principal balance as all of their payments go on this, instead of interest.

Finding the best balance transfer card

It’s easy to compare balance transfer card offers with InfoChoice. Most BT offers have a zero per cent interest rate for at least six months, with most periods lasting for longer than this. Some cards offer an interest rate that’s significantly lower than the prevailing market rates.

Look at the annual fee involved with the deal, as well as the balance transfer fee because these costs can chip away at your progress. Many balance transfer fees are around two per cent of the balance you’re moving.

How to compare frequent flyer and rewards credit cards

Frequent flyer and rewards program linked credit cards allow you to build up rewards points with your everyday purchases and you can redeem these points for flights, goods, experiences and services.

Rewards cards are ideal for people who usually pay off their balance within their statement period and so will actually gain by using their cards. If you carry a balance, what you’ll pay in interest may outweigh the benefits of the reward scheme, so do the maths and think carefully.

Finding the best frequent flyer credit or rewards card

You need to think about what credit card rewards scheme appeals to you and your lifestyle most.

There’s the Qantas Frequent Flyer scheme as well as the Virgin Velocity Frequent Flyer scheme.

Alternatively, you might prefer a scheme that earns you bank–related benefits, such as the Westpac Altitude Rewards scheme.

To start off, compare the earn rate of the cards, or the number of points you’ll earn per dollar spent on qualifying purchases. There may be a cap on how any points you can amass each month or year and if this cramps your style, you may want to look elsewhere.

On the other hand, some rewards cards offer generous bonus points when you sign up or if you hit a spending target within the first few months. There may also be perks like free airport lounge passes, an annual fee waiver or complimentary travel insurance.

How to compare low rate and low fee credit cards

Low rate or low fee credit cards apply lower interest rates in comparison to many other credit cards or charge no or a very low annual fee. These cards try to keep total credit card costs low.

This may be for an introductory period only, or it may be a permanently low rate. Many low rate credit cards are also low-fee or no-fee cards as well.

The lower interest rates and fees make these cards suitable for people who know they’ll be carrying a balance for at least some months throughout the year and so want to keep their interest rate down.

Finding the best low-cost credit card

When you’re comparing low-cost credit cards, the lower the interest rate, the better. You might find that the low rate is for an introductory period only, however, so find out what the revert rate is. You may also find that the cash advance rate is quite high, too, so beware.

In addition to the low rate, you should also examine the fee structure. It may be that a relatively high fee cancels out some of your savings.

Many low-cost cards have no benefits, so you might miss out on free travel insurance or rewards schemes.

Compare credit cards from Australia’s banks and other credit card issuers at InfoChoice.

The information contained on this web site is general in nature and does not take into account your personal situation. Do not interpret the listing order as an endorsement or recommendation from us.  You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser. If you or someone you know is in financial stress, contact the National Debt Helpline on 1800 007 007.

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