The types included in our best credit card guide
When choosing a credit card, it's crucial to understand the different types available and how they cater to various financial needs. Here are some common types to compare credit cards with:
- Rewards credit cards: Reward credit cards allow you to earn points, cashback, or miles for every dollar you spend. These rewards can be redeemed for travel, gift cards, merchandise, or statement credits.
- Low rate credit cards: Low rate credit cards offer a lower annual percentage rate (APR) on purchases than other cards. This can be beneficial if you tend to carry a balance on your card.
- Balance transfer credit cards: Balance transfer credit cards allow you to transfer existing credit card debt to a new card with a lower or 0% introductory APR for a specified period. This can help you save on interest and pay off your debt faster.
- Frequent flyer credit cards: Frequent flyer credit cards are designed for travel enthusiasts. They offer points or miles for airline ticket purchases with Qantas, Velocity and other airlines. These cards often come with travel perks like lounge access and travel insurance.
- Cashback credit cards: Cashback credit cards provide a percentage of your spending back to you as cash rewards. These cards are ideal for those who prefer tangible rewards or want to offset their everyday expenses.
- Student credit cards: Student credit cards are tailored for college or university students who are new to credit. These cards often have lower credit limits and may offer rewards or benefits suitable for students.
- Premium credit cards: Premium credit cards, like Platinum, Black, and Gold, cater to high-income individuals and offer exclusive perks such as concierge services, luxury travel benefits, and higher reward rates. These cards often come with higher annual fees, with the highest being a metal credit card.
What to consider when choosing a credit card
Before selecting a credit card, consider the following factors to ensure that the card aligns with your financial goals and spending habits:
- Interest rates: The interest rate, also known as the APR, impacts how much you'll pay in interest if you carry a balance on your card. Look for cards with competitive interest rates to save on finance charges – 0% purchase credit cards are available to compare.
- Fees: Be aware of the fees associated with the credit card, including annual fees, late payment fees, balance transfer fees, and foreign transaction fees. Choose a card with fees that align with your budget and spending patterns.
- Rewards and benefits: Evaluate the rewards structure of the credit card to determine if it aligns with your preferences. Consider whether you prefer cashback, travel rewards, points for specific retailers, or other benefits like insurance coverage and extended warranties.
- Credit limit: A card's credit limit dictates how much you can spend on the card. Ensure that the credit limit meets your spending needs without encouraging overspending.
- Eligibility criteria: Check the eligibility criteria for the credit card, including minimum income requirements, credit score thresholds, and residency status. Ensure you meet the criteria before applying to increase your chances of approval.
- Payment flexibility: Consider the payment options offered by the credit card issuer, such as online banking, mobile payments, automatic payments, and payment due dates. Choose a card with payment options that suit your preferences and lifestyle.
Methodology for best credit card comparison
We considered the following attributes and associated metadata when ranking our comparison of the best credit cards.
- Additional cardholders: If the card supports additional cardholders, how many, and the cost per additional cardholder.
- Airport lounge access included: Whether the card comes with airport lounge passes or lounge network membership and any limitations on use.
- Annual fee initial year: The first year’s annual card fee charge, which some cards waive. Lower is better or no annual fee at all.
- Annual fee ongoing: If there is an ongoing annual fee and much is charged each subsequent year to keep the account open. Lower is better.
- Apple Pay enabled: Support for Apple Pay, which is considered beneficial.
- Balance transfer offer: If there is an introductory balance transfer offer and what its rate, period, and fee are. Lower rates for longer periods are considered better.
- Cash advance rate: What the interest rate is on cash advances — and cash equivalent transactions classified as cash advances — and associated fees. Lower is better.
- Card type: Whether the card runs on American Express, Mastercard, Visa, or other network. This can affect where the card can be used and surcharges.
- Foreign exchange fee: If there is a fee incurred to convert foreign currency transactions whether made while overseas or from overseas stores and suppliers. Lower is better.
- Interest-free period: The number of interest-free days available. Longer is better.
- Introductory purchase rate: If there is an introductory purchase rate offer and what its rate and period are. Lower rates for longer periods are considered better.
- Late payment fee: What the fee is when payments are late. Lower is better.
- Maximum credit limit: The highest credit limit offered, if publicised by the bank.
- Minimum credit limit: The lowest credit limit offered, if publicised by the bank.
- Minimum income required: How much income is required as a minimum under the card's eligibility criteria. Lower thresholds increase accessibility to credit.
- Purchase rate ongoing: How much interest is charged on balances that are carried over. Lower ongoing rates are considered better.
- Rewards program: Whether the card earns rewards (points, cashback, etc. per dollar spent), the flexibility of rewards, and their value.
- Samsung Pay enabled: Support for Samsung Pay, which is considered beneficial.
- Sign-up bonus: Whether the card has a sign-up bonus of points, cashback, vouchers, etc. and its qualifying criteria. A sign-up bonus is considered beneficial.
- Target market: Whether the card is designed for businesses or consumers.
- Travel insurance: Whether the card comes with complimentary travel insurance, whether it covers domestic, overseas, or global travel, who it covers, and the level of protection.
Our rankings may not reflect what matters most to you. Be sure to compare key rates, fees, and features against your own financial priorities before deciding.
