Whether you’re applying for your first credit card, or you’re looking for a new one, it’s important that you perform a credit card comparison to find the right card for you and your lifestyle. Is a credit card the right choice for you? First – do you even need a credit card? Of course, these cards are incredibly useful, but it’s easy to think of your credit card balance as free cash, when it’s really not. You need to think about what you’ll be using it for and how you’re going to pay the balance and the interest that accumulates on your purchases. If you think you may go overboard with your spending, then a card with a low credit limit might be your best bet. Related Reading – What to look for in a credit card– Lowest credit card rates How to identify the best credit card for you One of the major factors when you’re choosing from the best credit cards for you and your circumstances is how you’ll pay your balance off. Credit cards have lots of different features for the many different types of users. Here are some features that may be important to you: Cards with low interest rates and fees If you only plan to use your credit card a few times a year, for last–minute flights or for emergencies, then a card with a relatively low limit, as well as low management fees and interest is ideal. These cards are also suitable for people on relatively low incomes who may not be able to pay off the balance within a month or two as they won’t accrue too much interest. Compare low rate credit cards from Australian banks, credit unions and other credit card issuers here. Cards with interest free periods If you can pay off your balance in full each month, then a card that offers you an interest free period – usually 55 days – might be a good bet. These cards tend to charge higher fees and interest rates, but if you’re avoiding interest most months, the annual fee is worth paying. Cards without interest free periods If you can’t guarantee to clear your balance every month then your best credit card deals will have low interest and fees. Cards with a promotional introductory interest rate These cards can look brilliant to start with, but you could face high interest rates and fees when the so-called honeymoon period comes to an end. You need to tread carefully here because the hike in rates can cancel out any savings you might make. If you’re looking to do a balance transfer, however, then these cards work really well because you can use the period of low or zero per cent interest to pay down your principal balance. Make sure you do the maths and that you know what your eventual rates and fees will be. It may also be the case that you’ll be charged the full interest rate on any purchases you make. Read the small print while you’re still at the comparison site stage. Cards with cashback, discount and reward schemes There are lots of credit cards with various reward schemes, but to find your best rewards credit card, you need to look at how the scheme works and how you’ll pay off your card each month. If you’re getting cashback credit, for example, you need to pay off all or most of your balance each month or else the interest will cancel out your rewards. It may be that the best rewards credit card option for you is one that offers you discounts on selected services and products that you buy through the lender’s partner providers. It’s a good way to save money if you know you’ll be buying the goods that attract the offers, but do make sure these savings won’t be eaten up by interest and fees. Credit card points rewards A simple way to make your credit card work for is to apply for one that gives you points for each dollar you spend. It’s essentially up to you how quickly or slowly you build up your points and (usually) what you spend them on. Compare rates, fees and features of cash back and rewards credit cards from Australia’s major banks, credit unions and other credit card issuers here. Travel insurance This offering can work really well if you’re interested in frequent flyer credit cards because travel insurance can be pricey if you get about quite a bit. Check out the charges and fees One clear way to sort out suitable from unsuitable when it comes to credit cards is to look at the fees you’ll pay on top of your balance and interest. There may be: annual account fees. late payment fees. fees for your reward program. international transaction fees. fees for going over your credit limit, and. cash advance fees. Watch out for merchant surcharges Sometimes, using a credit card with some merchants will incur a fee and sometimes the retailer will pass this fee onto you. You must be informed about this before you pay so that you can choose another payment method if you want to avoid the surcharge. You can find out more about surcharges on credit, debit and prepaid cards here. How to go about comparing credit cards Once you know what to look for (as well as what you want to avoid), you’ll make short work of weeding out the cards that won’t suit you, before aiming for the very best ones for you. The easiest way to do this is to use a comparison site so you can see the cards and their offerings side by side. Focus on the minimum payment calculation, the interest rates for purchases and cash advances, and the rate you’ll get on balance transfers. You should also look at the promotional interest rate and what the late payment fees are, as well as the annual management fees. Take your time It really is worth taking your time to shop around to find your ideal credit card. You might be tempted to just go with your usual bank or credit card provider, but you might find that there’s a better deal out there somewhere. Compare credit cards from all of Australia’s major banks and credit card issuers here. The information contained on this web site is general in nature and does not take into account your personal situation. 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.