Top 10 best credit cards & offers in Australia (our picks for November 2024)
1
Low interest rate
G&C Mutual Bank Low Rate Visa Credit Card: 7.49% p.a. interest rate on purchases, with $50 annual card fee.
2
No annual fee credit card
Virgin Money No Annual Fee Credit Card: $0 annual fee, with 0% p.a. on purchases for 6 months (reverts to 19.99% p.a.)
3
Longest 0% balance balance transfer offer
NAB Low Rate Card balance transfer offer: 0% on balance transfers for 28 months, then reverts to 21.74% p.a. Annual fee is $0 in first year, then $59. Balance transfer fee of 2% applies.
4
Biggest rewards sign up bonus
Citi Prestige Credit Card: 250,000 bonus Citi reward Points when you spend $10,000 on eligible purchases within 3 months from approval. Eligible purchases exclude Citi PayAll payments, Cash Advances, Balance Transfers, Special Promotions, interest and fees. Any refunds and Chargebacks on purchases will also be excluded and will not form part of the spend criteria. Annual card fee is $700.
5
Highest rewards card earn rate
Bankwest More World Mastercard: Earn 2.5 points per $1 spent on eligible purchases. 19.99% p.a. on purchases, with $270 annual fee.
6
Interest-free credit card
Citi Rewards Credit Card: 0% p.a. for 15 months on purchases & balance transfers. Balance transfer reverts to cash advance rate, 2% BT fee applies. T&Cs apply. Annual fee: $199
7
Top Qantas frequent flyer card
Qantas American Express Ultimate Card: Up to 1.25 Qantas Points per $1 spent on everyday purchases (uncapped earning potential*). Plus, earn 50,000 bonus Qantas Points when you apply online by 14 January 2025, are approved, and spend $3k on eligible purchases on your new card within the first 3 months of approval. T&Cs apply. New Amex members only. Annual fee: $450.
8
Top Velocity frequent flyer card
Virgin Money Velocity High Flyer Card: 1 Velocity Point per $1 spent on eligible transactions up to $8k per statement period, then 0.5 points per $1. Extra points for spending with Virgin Australia. Plus up to 80,000 bonus points when you sign up and meet the offer spend conditions. Two lounge passes, travel insurance and a $129 travel voucher thrown in too. Annual fee: $329.
9
Travel credit card
Bendigo Ready Credit Card: 0% international transaction fees with travel insurance included and $0 annual card fee. Purchase rate of 19.99% p.a. with up to 55 interest free days
10
Top business rewards card offer
American Express® Qantas Business Rewards Card: Earn 130,000 bonus Qantas Points when you apply by 14 January 2025, are approved and spend $3k on eligible purchases on your new card within 2 months of approval. T&Cs apply. New Amex Card Members only. Annual card fee: $450.
Credit card news – November 2024
Sean Callery, Editor
New Money.com.au data shows credit card fees are Australia’s most hated type of fee. More than one in five people (21%) said card surcharges are their most hated, with almost as many (18%) choosing other credit card fees, like the annual card fee and foreign exchange fees. Credit card fees are more hated than the likes of delivery fees, ATM withdrawal fees and public holiday surcharges, the survey showed. The good news is most credit card fees are avoidable if you choose the right card. As for surcharges, their days may be numbered too as the Reserve bank is reviewing how merchants charge for payments. Watch this space.
Sean Callery, Editor
What's the best credit card type for you?
Low rate credit cards
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.
Interest-free credit cards
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.
No annual fee credit cards
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.
Rewards credit cards
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.
Frequent flyer credit cards
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.
Balance transfer credit cards
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.
Premium credit cards
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.
Other types of credit cards
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.
How to compare credit cards
To compare credit cards, start by figuring out how you plan to use the card. It’s important to get a card that matches your spending habits.
But here are some key factors to look at across the board, whichever type of card you need.
The best credit cards will have...
Useful rewards
Look for cards offering rewards you'll actually use. And pay close attention to the conditions you need to meet to be eligible. For example, you might only get bonus points for signing up if you spend a certain amount after getting your card.
Competitive interest rates
This is the cost of borrowing using your credit card. You'll pay interest on purchases if you have a balance outstanding after the interest-free period each month, and a separate rate of interest on cash advances (with no interest-free period typically).
High interest-free days
This is the maximum number of days you have from the start of each statement period before you're charged interest on purchases. Ideally you want a card with a high number of interest-free days – e.g. 55 days or more.
Low credit card fees
Credit card annual fees can range from $0 all the way up to $1,750. There are other fees that might apply depending on how you use the card. If a card charges fees, consider what you're getting in return
Credit card fees explained
- Annual fee This can range from $0 to well over $1,000 for premium rewards cards. It's fairly common for credit cards to have the annual fee waived in the first year, or every year if you spend a certain amount.
- Extra cardholder fee Some lenders charge an additional yearly fee for each extra card that’s part of your account. There is generally a limit on how many extra cards you can add to your account.
- Foreign currency conversion fee This is charged on transactions made in a foreign currency (even if you're in Australia when you make the purchase). This generally ranges from 2-3% but there are a number of credit cards with no international fees.
- Late payment fee If you don't make at least the minimum repayment on your credit card by the due date, you could be charged a late payment fee. This fee generally ranges from between $10 to $35 depending on the provider.
- Over limit fee This is a fee that may be charged if your balance exceeds the limit on your credit card limit.
- Cash advance fee Using your credit card to withdraw cash can cost you up to 5% of the withdrawn amount in fees, plus interest.
- Foreign currency cash advance If you are in a foreign country and withdraw cash from your credit card, then you could be charged a foreign currency cash advance fee as well as the standard ATM fees.
- Balance transfer fee Some cards with a balance transfer offer (but not all) charge an upfront fee of between 1-3% of the balance you're transferring. That fee will be in addition to the card's annual fee.
- Dishonour of direct credit fee If you are paying off your credit card balance by direct credit and you dishonour that payment, then you may be charged a dishonour fee of up to $2.50.
- Replacement card fee It can cost you up to $25 to have a replacement issued if you lose your card or make it unusable.
What credit card insurance can I get?
Travel insurance
Covers the likes of emergency medical expenses, loss or theft of personal belongings, and flight cancellation. Credit card travel insurance may cover international and/or domestic travel.
Rental car insurance
May cover theft, damage, towing and other charges related to your rental vehicle. This often simply covers the excess on the insurance available through the car rental company.
Price protection
Covers the cardholder for changes to product prices and allowing you to claim the difference as a refund.
Purchase protection
Covers accidental damage, loss or theft of items you have paid for using your card.
Extended warranty cover
This means items you purchase using your card may be covered for defects for longer than they would be if the standard manufacturer warranty applied.
How to qualify for a credit card in Australia
Qualifying criteria for credit cards will vary between cards and issuers. To qualify for the majority of credit cards in Australia, you will need to meet some basic requirements:
- Be at least 18 years old
- Be an Australian citizen, permanent resident or hold an eligible visa
- Have a reliable source of income
- Have good credit score
If you are a temporary resident, or have bad credit, you could still get approved for a credit card. The number of cards to choose from will be limited, however, and you may need to supply additional supporting documentation with your application.
How to apply for a credit card
You can apply for a credit card online over the phone, at a bank, and even at the checkout at certain stores. A typical credit card application process can take between 15 and 20 minutes.
As part of the application, you’ll need to provide the card issuer with supporting documentation. This is so they can assess your ability to comfortably meet repayments, and to determine your credit limit. You’ll be asked for:
1
Personal details
2
Valid ID, such as a driver licence or passport
3
Employment history and current salary (verified with payslips)
4
Your assets - such as your home and motor vehicle
5
Your current expenses and other loans you may have
Remember, a declined application could affect your credit score, and make it difficult to gain approval for a loan or credit card in the future.
Credit card pros and cons
Pros
- Financial back up if you need it
- Offers payment and cash-flow flexibility
- Some cards come with no annual fees and/or 0% interest
- Insurance and fraud protection often included
- A lot of cards offer rewards
- If repaid in full consistently, may help build your credit score
Cons
- Can encourage overspending
- High interest rates and fees on some cards
- Not always obvious if rewards and perks are worth the cost
- Your card limit could impact future loan applications
- Cash advances can be particularly expensive
- Can damage your credit score if you miss repayments
Is a credit card worth it for me?
(Expert tips)
If used responsibly, a credit card can be a handy tool for your day-to-day finances. But they're not for everyone, explains David Rankin, financial coach at Sort My Money and former bank manager at ANZ and Westpac.
