How they work: Low rate credit cards are designed to be a relatively cheap credit card option based on the interest rate. They are usually fairly basic in terms of the features, perks and rewards on offer.

Purpose: Often used by people who will occasionally have an outstanding balance that interest is charged on. Offers payment flexibility while keeping costs lower than some other credit cards.

Interest rates: 0.00% - 13.99% p.a.

What's good: Access credit at a relatively low rate (rates may even be lower than a personal loan in certain situations.)

What to watch for: Cards where the low interest rate is based on a special introductory offer that will revert to a higher rate later on.

How it works: Interest-free credit cards charge no interest, but usually come with a monthly fee for using the card instead. Some standard credit cards offer a 0% introductory rate for a limited period.

Purpose: These are basic cards designed for light usage, as the credit limit is generally capped at $1,000 - $3,000. They may be handy as an emergency/backup source of funds. If you don't use the card, it likely won't cost you anything.

Interest rates: 0% either ongoing or for an introductory period.

What's good: No interest and low credit limits mean there is a cap on the cost and how much debt you can build up.

What to watch for: Monthly fees can be relatively expensive. If you actually use the card, it may not be any cheaper than a standard credit card. These cards also typically do not offer rewards.

How they work: A type of no-frills credit card with no annual fee. It can help keep costs as low as possible, particularly for people who only use their card for emergencies, and/or repay their balance in full each month. Note, credit cards with no annual fee won’t necessarily have a low interest rate.

Purpose: An option for people who rarely use their credit card and don’t want the kinds of perks that come with more expensive cards.

Interest rates: 8.99% - 23.99% p.a.

What's good: Depending on how you use it, the card might cost you absolutely nothing, ever.

What to watch for: No annual fee offers that are only for the first year, or conditional on you sending a minimum amount in a set period.

How they work: Rewards credit cards are linked to a rewards program that allows you to earn points when you spend, and redeem those points for rewards like cashback, gift cards, hotel stays, and shopping across a wide range of products.

Purpose: Rewards credit cards are all about earning points and getting access to more premium card features, like complimentary insurance.

Interest rates: 12.49% - 23.99% p.a.

What's good: Allows you to earn points for spending you would be doing anyway.

What to watch for: Cards that lure you in with rewards sign-up offers and perks, but have very high fees, interest rates or restrictive caps on the number of points you can earn.

How they work: Frequent flyer credit cards are rewards cards, tailored to customers who travel a lot. The rewards and benefits of the card are geared towards frequent travellers (e.g. points earning and redemption on flights and accommodation, airport lounge access, travel vouchers and travel insurance).

Most commonly these are linked to the Velocity credit cards or Qantas point cards.

Purpose: Earn and redeem points and other perks on travel related spending.

Interest rates: 12.49% - 23.99% p.a.

What's good: More targeted and valuable rewards for the right cardholder.

What to watch for: Cards that offer very niche travel perks that are only worthwhile if you fly often and spend a decent amount of time overseas.

How it works: Balance transfer credit cards allow you to transfer the balance of an existing credit card, and pay 0% interest on that balance for a period of time. Balance transfers can be available with low rate or reward cards.

Purpose: Consolidate credit card debt and pay it off during the limited-time 0% interest period.

Interest rates: 0% during the balance transfer period but reverting to higher rates from 8.99% - 23.99% p.a.

What's good: The 0% interest periods available can be quite generous – up to 24 months, depending on the card.

What to watch for: Balance transfer fees that sometimes apply, either as a flat fee or a percentage of the balance being transferred. There are also no interest-free days on new purchased during the balance transfer period.

How it works: Premium credit cards generally have the highest annual fees, credit limits and offer the most rewards. Gold, platinum, and black credit cards are all premium versions of standard credit cards, and often require the cardholder to spend a certain amount of money to access benefits.

Purpose: Designed to maximise rewards and perks for high income, high spenders.

Interest rates: 19.99% - 23.99% p.a.

What's good: High-end perks, some of which may be exclusive to cardholders.

What to watch for: The temptation to spend more than you can afford in an effort to chase premium card rewards.

Travel credit cards Travel credit cards allow you to earn frequent flyer points that can be used towards flights, accommodation, and other travel perks. Some come with additional travel-friendly features like 0% foreign transaction fees.

Cashback credit cards Cashback credit cards reward a percentage of your spending as credit. Alternatively, you can get your cash back in other forms such as gift cards.

Business credit cards Business credit cards are designed to offer a line of credit for business customers. All of the perks of personal credit cards also apply to business cards such as rewards schemes, interest-free days, and balance transfers. Corporate credit cards are designed for larger businesses.

Charge cards Charge cards are very similar to credit cards, but there is no set credit limit and the cardholder must pay off the full balance each month. There are no interest charges on charge cards.

Student credit cards Student credit cards are targeted specifically towards students who have little to no credit history. These are usually a fairly basic credit card, with low costs and few significant perks.

Store credit cards Store credit cards are offered by specific retailers to earn points as part of their rewards program. The other aspects of the cards will be similar to standard credit cards. Store credit cards are no longer widely available in Australia.