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Credit card types: Figure out what card you need
There are different types of credit cards for people trying to get their debt under control, earn stacks of frequent flyer points or just have a cheap, flexible way to manage their spending each month.
There are a lot of credit cards on the market in Australia, with over 290 in Finder's database. Some cards are great for one thing and terrible for others.
Balance transfer credit cards can help you save on interest and pay off existing debt. These cards offer an introductory low or 0% interest rate on balances you transfer to the card, with some interest-free offers lasting 28 months.
Pros
Move your card debt to a new card with 0% interest
Gives you a way to save on interest and pay off debt fasters
Can be used for debt consolidations
Cons
Some cards charge a one-off fee to transfer your unpaid card debt (a balance transfer fee)
After the 0% balance transfer period ends the card has a much higher interest rate
A lot of credit cards also have bonus point offers when you're a new customer, with some offering 100,000 points or more. Most offers have a spending requirement in the first few months, and some offer more points when you keep the card for over a year.
Pros
You get rewarded for purchases you were already going to make
Bonus point offers can give you hundreds or thousands of dollars of value
Perks such as airport lounge passes and flight or travel credit can add extra value
Cons
Rewards credit cards typically have higher rates and fees than more basic cards
Some cards have points caps that limit how much you can earn
Risk of overspending when you want to earn more points
3. Low interest rate credit cards
Low rate credit cards help you save interest if you don't pay off your total account balance each month. These cards have purchase interest rates below 15% p.a.
Based on Finder analysis in 2023, the average credit card holder could save $100 a year by switching to a card with a lower rate.
Pros
You pay less interest on purchases compared to other cards
Many low rate cards also have low annual fees under $100
Simple features can make it easier to manage the card
Cons
The low interest rate usually applies to purchases only (not balance transfers or cash advances)
Fewer rewards and extra features on these cards
If you already pay off your credit card each month, a low rate may not offer as much value as cards with more perks
4. No annual fee credit cards
Most no annual fee credit cards offer an ongoing $0 annual fee or waive the annual fee in the first year. A few cards also offer an ongoing fee-waiver when you meet a monthly or yearly spend requirement.
Pros
You can save $25 to $1,450 a year, based on the annual fees for personal credit cards in Australia
Cost-effective if you only want a card for occasional use or emergencies
Introductory offers with a $0 first-year annual fee help you save on upfront costs
Cons
Most no annual fee cards have higher interest rates than low rate cards
Fewer extra features for cards with ongoing $0 annual fees, compared to rewards cards
First-year annual fee waivers only last 12 months, so you'd need to cancel a card after that if you didn't want to pay it
5. Business credit cards
Business credit cards are suited to business owners and sole traders, giving you a way to separate personal and work spending. They offer expense management features such as cards for employees and integration with accounting software.
Pros
Offer access to credit that can help with cash flow for your business
Expense management features and tools
Some business credit cards offer generous rewards programs and perks
Cons
Interest rates can be higher than rates offered by business loans
Typically have higher annual fees than personal credit cards
Stricter eligibility requirements, such as having an ABN and operating for at least 12 months
6. Interest -free or 0% interest rate credit cards
Some credit cards don't charge any interest at all. At least for a while. 0% interest cards either charge you an annual fee instead, or offer 0% for 6-12 months before charging interest.
Pros
Make purchases and pay no interest!
These cards sometimes have points or other perks
Great way to cover a purchase (or a few purchases) and give yourself time to pay it back
Cons
Some of these cards charge a high rate after the interest-free period
Cards often charge an annual fee of $99-$199 or late payment fees.
Some interest-free cards aren't really credit cards: they charge a fee if you don't pay it off
7. Cashback credit cards
A cashback credit card gives you a little reward when you spend in the form of a cashback. Cashback cards typically limit the amount of cashback you can earn per month. Some are just a one-off deal if you spend a certain amount in the first few months.
Pros
Get cashback on your spending
Most cashback cards have a low annual fee
Spending requirements to get cashback are usually fairly low
Cons
There's often several conditions you have to meet (like spending a certain amount each month) to get a cashback
Cashbacks are often a temporary offer when you first take out the card
These cards don't really offer great long term value
8. Travel cards
A good travel credit card is one that lets you spend money overseas without paying foreign transaction or ATM fees. Some cards even offer travel insurance.
Pros
Spend money overseas without paying high international transaction fees
Some travel cards have no annual fee, or offer perks like lounge access and complimentary travel insurance
Using these cards while overseas can save you a lot of money
Cons
These cards are often best suited for spending overseas but not for everyday use at home
Some cards do charge an annual fee or currency conversion fees
These cards often have a high purchase rate if you don't pay them off in full
Finder survey: What type of credit card would Australians consider next?
Response
Rewards
49.06%
No annual fee
44.92%
Low rate
32.17%
Frequent Flyer
31.09%
Cashback
24.98%
I do not plan to have a credit card in the future
21.74%
Balance transfer
15.18%
No foreign fee
12.31%
Business
6.65%
Other
0.72%
Source: Finder survey by Pure Profile of 1113 Australians, December 2023
Other types of credit cards for specific types of customer
We've covered the main types of credit cards above. But there are some more unique examples of card types that are less common.
Student credit cards and low income credit cards.Credit cards for students typically offer low credit limits, low rates and low fees. They also often have low minimum income requirements and accept applications when you're getting Centrelink payments, ideally in addition to income from a job (e.g. part-time or casual work). Check the eligibility requirements before you apply and include as much proof of income as possible.
Virtual credit cards.Virtual credit cards are stored in your digital wallet or an app, giving you a way to make contactless payments from your phone or device. Some virtual credit cards can be used as soon as you're approved.
Credit cards with airport lounge access. These credit cards offer access to airport lounges when you're travelling, regardless of the airline. Most cards offer either single-use invitations each year, or membership Priority Pass and other lounge programs. They're great for people who regularly fly with different airlines and want perks at the airport.
Gold, platinum and black credit cards.These credit cards all offer extras above what a basic card offers. Think complimentary insurance, more rewards, airport lounge access and other premium perks. These cards are for big spenders and earners, people who want points and perks. People who pay off their total balance each month and can afford the high annual fee.
High credit limit credit cards and charge cards.These credit cards can offer maximum limits between $20,000 and $100,000 for people who meet the requirements. There are also charge cards that don't have a pre-set spending limit but factor in your credit history, previous spending and other details instead. These cards are for people with very high incomes who use their card for lots of expenses.
Frequently asked questions
When you're comparing credit cards, asking these questions can help you choose:
What is the main reason I want the card? For example, to pay off debt (balance transfer), save on interest for purchases (low rate) or earn rewards.
What other features do I want? Once you've chosen a main type of card, you can compare other features to find one you want to apply for.
What costs are affordable for me? For example, do you want a low annual fee or a higher fee with more perks?
Remember, the type of credit card isn't as important as getting a credit card with the features you want and costs that you find affordable.
There are no secured credit cards in Australia. Overseas, these credit cards are usually secured with a deposit or other financial asset to help people with no credit history or bad credit improve their credit scores.
In Australia, alternatives to secured credit cards include no interest, monthly fee credit cards, small personal loans or buy now pay later. But you'll still need to meet the eligibility requirements on the National Debt Helpline website.
There are 3 credit card payment networks in Australia: American Express, Visa and Mastercard.
You can get a Mastercard or Visa credit card through Australian banks and independent credit card brands, and American Express cards through Amex.
Amy Bradney-George was the senior writer for credit cards at Finder, and editorial lead for Finder Green. She has over 16 years of editorial experience and has been featured in publications including ABC News, Money Magazine and The Sydney Morning Herald. See full bio
Amy's expertise
Amy has written 565 Finder guides across topics including:
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