Find some of the terms in this table confusing? Jump down to our glossary to learn about key features and how to compare credit cards.
What is a credit card?
A credit card lets you spend money that you can pay back over time, usually with interest.
Unlike a debit card – where you need money in the bank – a credit card gives you a set amount you can spend (or borrow), known as your credit limit. You also get regular statements (usually monthly) and need to make repayments by the due date on them.
"When comparing credit cards, decide what's most important to you. Is it a low interest rate? Low annual fee? Bonus frequent flyer points? Maybe a balance transfer deal? For instance, I pay my balance in full each month, so I ignore the interest rates and don't look at balance transfer offers. Instead, I aim to find cards with a great points earning rate. Knowing exactly what you want, makes it easier to find the right card for you."
There are 5 main types of credit cards. Here is a quick explanation of each one; every card is slightly different, so you should compare credit cards to find the best credit card that has the features that matter to you.
Offer distinct features for business (like accounting feeds)
Stricter eligibility requirements
How old do you have to be to get a credit card?
In Australia, you must be at least 18 years old to apply for a credit card in your name. This is the age you are legally considered an adult and, since minors can't be held liable for contracts, only adults can apply for credit products.
This policy is part of the strict lending rules that protect young Australians from getting into debt they can't afford.
Finder survey: How old are Australians when they get their first credit card?
Response
18-22
31.63%
23-27
28.21%
I’ve never had a credit card
14.73%
28-32
12.94%
33-40
8%
41-50
2.7%
50+
1.8%
Source: Finder survey by Pure Profile of 1113 Australians, December 2023
How to compare credit cards
Here's a breakdown of features and charges you should look at when doing a credit card comparison.
Annual fee
What is it? The amount you'll have to pay each year just to use the card.
What you should know: Higher annual fees usually mean more perks and rewards.
Balance transfer rate
What is it? The interest rate you'll pay if you transfer a balance from another card.
What you should know:The lower the interest rate, the better. Most introductory offers are for 0% p.a. on your balance, but you may pay a one-time fee.
Cash advance rate
What is it? The interest rate you'll pay if you take cash out or make an equivalent transaction.
What you should know: This is often the highest interest rate on a credit card, so avoid cash advances unless it's an emergency.
Credit card network
What is it? The payment system that processes all your credit card transactions. Visa, Mastercard, American Express and Diners Club are the key credit card networks in Australia.
What you should know: Banks and brands partner with Mastercard and Visa, so you'll see their logos on your cards. American Express issues cards and has its own network for processing payments. Diners Club has more limited availability and is leaving the Australian market.
Foreign transaction fee
What is it? The fee you'll be charged on purchases made in a foreign currency overseas or online.
What is it? The lowest amount you need to pay by the due date to keep your account in good standing.
What you should know: You can always (and should try to) pay more than the minimum amount. But paying less can lead to late payment fees and hurt your credit score.
p.a.
What is it? This abbreviation of "per annum" is used for credit card interest rates, because the annual (or yearly) value is shown.
What you should know: As an example, the interest you'd be charged over 12 months would be about 20% of your balance on a credit card with a 20% p.a. interest rate.
Purchase interest rate
What is it? The amount of interest you'll pay if you don't pay your card off in full.
What you should know: The lower the interest rate, the less you'll pay in potential interest.
Rewards program
What is it? Offers points and perks that you can earn for your spending.
What you should know: Common features include points, insurance, lounge passes and premium services.
Pros & cons of credit cards
Pros
Flexibility. If you have a big purchase to make, a credit card can be a financial "buffer" – letting you buy it and then repay it over time. If it's used wisely, it can be interest free.
Convenience. Credit cards allow you to buy what you need, when you need it. You can use them to shop in-store, online and overseas, with security features to protect against fraud.
Rewards. Everyone loves perks. A credit card can help you get frequent flyer points, cashback on your groceries, flight upgrades or even gift cards.
Cons
Debt. Credit card interest adds up quickly if you don't pay your balance on time, which could cost you hundreds (or thousands) of dollars and take a long time to pay back.
Can be expensive. The average interest rate for an Australian credit card is around 20%, RBA stats show. In comparison, the average interest rate for a variable rate personal loan is 14.41%.
Sneaky fees and surcharges. Some businesses add a surcharge to credit card payments, which can be 1–2% of the total purchase cost.
Bottom line? Credit cards have a mix of great perks and understandable risks. A good rule of thumb is to compare credit cards to ensure you get one with the features you need, while having a plan for paying it off and using the benefits.
Australians are spending more on their credit cards than ever, to the tune of $423 billion in transactions over the last 12 months according to the latest figures.
The average balance for a cardholder who is getting charged interest (meaning they haven't paid the card off in full) is $1,364.
Expert insight: Why credit card records matter
"Maintaining these records helps you track your spending, verify transactions, and catch any errors or fraudulent activities promptly. They are also useful for budgeting, filing taxes, and providing proof of purchase or payment if disputes arise. Keeping organised and accessible records of your statements, whether in digital or paper form, ensures you have a comprehensive financial history that can be referenced whenever necessary."
For many Australians, using a credit card is an everyday part of life. But not everyone needs a credit card.
In fact, Finder research has found that 72% of Australians could manage their money without a credit card. They technically don't need a card but still have one for different reasons, including:
For emergencies
To earn rewards or frequent flyer points (which are not offered by most other accounts)
To make big purchases
To build credit history
To pay off debt and/or get a balance transfer
Some people also like the security of knowing that a credit card uses the bank's money, so you're not directly out-of-pocket when it comes to fraud. On the other hand, you shouldn't take on debt you don't need, especially if you're paying interest on it.
Impulse shoppers are typically more prone to credit card debt and could end up with a big balance and interest charges, which can take years to pay off.
Did you know? 2024 Finder research shows the average Australian with a credit card could save $222 over 32 months by switching cards.
Have questions about credit cards? We have answers
You need to apply for a credit card before you can start using one. This is usually a simple process you can do online in a few steps:
Compare credit cards from different providers to find one you want
Check that you meet the eligibility requirements (e.g. being over the age of 18 and earning income)
Complete the application, including supporting documentation (e.g. your driver's licence details, payslips etc)
Before you apply it's important to think about how a credit card fits in with your financial situation. It may be helpful to use a repayment calculator to estimate potential costs and budget for repayments if you don't think you'll pay off what you spend each month.
Also keep in mind that lenders check your credit report and score when you apply. So if you want to check these details before that, you can get a free copy of your report and score through Finder.
A credit card is convenient, but it comes with a risk of debt. Here are 4 tips to help you stay on top of payments.
Ask for a credit limit you can manage. Credit card companies must determine your limit based on what you could "reasonably" afford to pay off over 3 years. But if the credit limit you're offered is higher than what you need, you can request a lower limit so you have more control.
Pay more than the minimum. Only paying the minimum amount listed on your credit card statement can lead to years of debt and interest charges. So, aim to pay off the total balance by the statement's due date.
Plan repayments. Set a monthly calendar reminder for the payment due date, or set up automated payments. Finder's credit card repayment calculator can also help you budget.
Get help if you need it. If you're struggling with your credit card, call your bank or provider to see what support is available. You can also get free financial advice by calling the National Debt Helpline on 1800 007 007.
Applying for a credit card impacts your credit score as each application is recorded on your credit file. Multiple applications in a short period can lower your score and missed repayments also negatively affect it. But regular payments and responsible use of a credit card can raise your credit score. It's all in how you use the card.
Yes, but it's typically more difficult. It's a good idea to provide as much detail as possible on the application to show you can manage the account. You could also chat to your current bank before applying so they can guide you. If you can't get a credit card, an unsecured personal loan could be another option.
The discussion around credit cards vs Afterpay has been going on for years, but both cards and buy now pay later (BNPL) services have different features. Here's a basic breakdown:
Credit cards: You can use a credit card almost everywhere: shops, cafes, online. They just need to accept the type of card you have (Amex, Mastercard, Visa). If you don't pay off your balance in full each month, you'll be charged interest. When you apply, the bank will check your credit score to decide what limit to give you.
Buy now pay later: Most BNPL services let you buy items from partnered stores, then pay them off in fixed instalments over a few weeks or months. They don't typically charge interest but may have other fees, especially for late payments. Your credit history isn't usually checked when you apply and your limit will increase with responsible use.
Although you can't apply for a credit card in your name while you're under 18, you can consider the following options:
Ask to be an additional cardholder on your parents' credit card. If you're at least 16 years of age, your parents may add you as a supplementary cardholder to their credit card account. This means that you will receive a credit card linked to their account, and they will remain legally responsible for all the expenses.
Get a prepaid credit card. A prepaid credit card lets you preload the card with money. This means it's technically not a "credit" card because you are responsible for providing the money you spend, but it can be a useful pay-as-you-go option. With a prepaid card, you won't fall into debt, and can usually shop anywhere Visa or Mastercard is accepted (including online).
Use a debit card. A debit card is similar to a prepaid card, except it is linked to a bank account. When you use this type of card, you are spending money that you have in the account and don't have to keep loading money like you would with a prepaid card. Most debit cards can be used for contactless payments and mobile wallets like Apple Pay or Google Pay, if you're set up with one of those accounts.
Focus on savings. The importance of saving throughout your life is often underrated. Learning to save should be a critical focus, especially before you get a credit card. This will ensure you have funds that you can use when necessary and also prevent unmanageable credit card debt in the future.
Before applying for a credit card, make sure that you've researched your chosen card and understood the terms, conditions and eligibility requirements. Rather than thinking of these requirements as restrictive, understand that credit card application requirements help uphold responsible lending practises and protect consumers.
Credit Card Finder® is a free, Australian-owned service that you can use to compare over 260 credit card offers from banks, credit unions and other financial institutions. We've been around since 2006 and keep a database of virtually every credit card on the market.
Our comparison tables are free to use and we link you directly to the lender's secure application page. We make money from featured partners but editorial opinions are our own.
Why you can trust our credit card experts
Obsessed with perks - we nerd out over points, rates & prizes - our editors spend hours (ok, days) crunching 250+ cards every single month. We even give them a simple score out of 10 if you just want the easy life.
No two cards the same - different cards are great for different things (and some are just junk). That's why we track and score every type of card from balance tranfers to rewards, cashback to low interest - so you don't waste a cent.
No BS - We're not owned by a bank, we don't have a call centre. Our only mission is to match you with the card of your dreams. Whether it's your first card, or you're a points ninja - we got you.
Richard Whitten is a money editor at Finder, and has been covering home loans, property and personal finance for 6+ years. He has written for Yahoo Finance, Money Magazine and Homely; and has appeared on various radio shows nationwide. He holds a Certificate IV in mortgage broking and finance (RG 206), a Tier 1 Generic Knowledge certification and a Tier 2 General Advice Deposit Products (RG 146) certification. See full bio
Richard's expertise
Richard has written 542 Finder guides across topics including:
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Obsessed with perks - we nerd out over points, rates & prizes - our editors spend hours (ok, days) crunching 250+ cards every single month. We even give them a simple score out of 10 if you just want the easy life.
No two cards the same - different cards are great for different things (and some are just junk). That's why we track and score every type of card from balance tranfers to rewards, cashback to low interest - so you don't waste a cent.
No BS - We're not owned by a bank, we don't have a call centre. Our only mission is to match you with the card of your dreams. Whether it's your first card, or you're a points ninja - we got you.
