Credit CardTypes of Credit Cards In Australia

With so many credit cards on the market, it’s tough to choose one that suits your lifestyle. It helps to know what you’re working with before determining which credit card is best for you,.

This guide will walk you through the types of credit cards in Australia. By gaining an understanding of the features of each card type, you can better determine which is the best fit for your needs.

No Annual Fee Credit Card

Cards with no annual fee are a standard, no-frills type of credit card. No annual fee means no benefits, but if you’re looking for a straightforward card this might be the option for you. Be aware that some credit cards only offer no annual fee for a limited period, after which a fee is applied.

Features of a no annual fee credit card

  • No annual fee
  • Interest rate may be higher for cards with permanent no annual fee

Who benefits most from a no annual fee credit card?

  • People who keep a credit card for emergencies only
  • People who aren’t interested in additional credit card benefits
  • People who pay their balance off in full each month
 

Balance Transfer Credit Card

Using a balance transfer credit card is a good way to pay off your debts – as long as you are smart about it. These cards offer a limited-time balance transfer rate of 0%, so you can transfer your debts from a card with a higher interest rate to the new card, and pay them down without accruing interest.

The catch? Once the balance transfer promotional period ends, a new interest rate will kick in. Although there is a 0% interest rate to begin with, there is usually a balance transfer fee associated with the initial transfer.

Features of a balance transfer credit card

  • 0% interest for a limited period on balance transfers
  • Balance transfer fee may apply
  • Annual fee may apply

Who benefits most from a balance transfer credit card?

  • People who are trying to pay down credit card debt
  • People who aren’t planning to use the card for everyday purchases
 

Low Interest Rate Credit Card

Credit card interest rates in Australia tend to hover around the 17% mark. If you carry a balance of over $1000 at the end of the month, you’ll accrue $170 in interest. It’s easy to see how this can add up for people who aren’t paying off their balance quickly. That’s why low interest rate credit cards are so appealing—and practical—for many Australians.

Low interest rate cards may offer introductory periods of 0% interest for a limited time, or ongoing rates around 10%. The rate typically applies to purchases only, not to other features (like a cash advance).

Features of a balance transfer credit card

  • Low or no interest rate on purchases
  • Interest rate may be for a limited time
  • Annual fee may still apply

Who benefits most from a balance transfer credit card?

  • People who do not pay off their balance in full each month
  • People who rely on their credit card to make large purchases
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Rewards Credit Card

This is a type of credit card in Australia that ‘point hackers’ do well with, but it’s easy for the benefits to fall by the wayside if you don’t use them. With a rewards credit card you’ll earn points for dollars spent, which can then be applied for a range of products and services. Essentially, you could be getting free travel and entertainment (provided you’re not buying things on your credit card just to earn the points).

Frequent flyer cards are an example of a rewards credit card, because they let you earn airline points each time you swipe. However, many rewards points carry a high annual fee to compensate for the benefits.

Features of a balance transfer credit card

  • Earn rewards points for your spending
  • Redeem rewards points for travel, entertainment, and lifestyle products or services
  • High annual fee
  • Points may expire if they are not used

Who benefits most from a balance transfer credit card?

  • People who use their credit cards frequently but pay the balance off in full
  • People who spend large amounts of money
  • People who are dedicated to earning and using rewards points
 

Premium Credit Cards

Cards labeled as silver, gold, platinum, titanium, diamond, or black fall under this category. These are elite credit cards with benefits and a price tag to match. These cards tend to have high interest rates and high annual fees, but come with exclusive member benefits like concierge service and airport lounge access.

Rankings and availability vary by credit card company, but in general premium credit cards are ranked as follows:

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Features of a balance transfer credit card

  • High annual fee and interest rate
  • Minimum income requirement may apply
  • High credit limit
  • Minimum credit limit may apply
  • Wide range of rewards and benefits

Who benefits most from a balance transfer credit card?

  • High income earners who use credit cards frequently
  • People who are prepared to pay off their balance in full
  • Frequent travellers
 

Special Purpose Credit Cards

There are types of credit cards in Australia geared towards very specific demographics and purposes, including students, businesses, frequent shoppers and travelers.

Student credit card

Student credit cards are like ‘starter’ credit cards for people who are still studying. They have low or no annual fees and low credit limits. These cards can help students build their credit history and learn to manage credit before graduating to a card with more comprehensive features.

Store credit card

Store credit cards are limited-use cards specific to a store and its affiliates. For example, if you have a David Jones storecard it can only be used at David Jones, but you can also earn rewards points to redeem for gift cards. Interest rates tend to be higher, and minimum purchase and account-keeping fees may apply.

Business credit card

Business or company credit cards are designed with a business perspective in mind. These cards make it easy to manage expenses by providing summary reports and the ability to cap spending limits as required. If rewards points apply, these may go to the business or the individual employee.

Travel credit card

With credit cards accepted worldwide, cash is no longer king when you’re travelling internationally. Travel credit cards come with specific benefits for travelers, like no foreign transaction fees and good currency exchange rates. Some also offer the opportunity to earn special travel-related rewards points.

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Choosing a credit card is all about your priorities. With so many cards on offer, you have the opportunity to find one that suits and maximise value. Shop around to compare deals before you sign up so you can gather the facts before making a decision.


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