Compare credit cards in Australia with our simple guide. Learn how to apply, avoid fees, and choose the credit card with the best benefits.
A credit card is a payment card provided by a bank or other lender, which allows you to make purchases using a pre-approved line of credit. Interest is accrued on the outstanding balance, and both are repaid in regular instalments. Credit card interest rates are determined by the lender and the type of card you apply for.
A credit card works in a similar way to a debit card when making purchases in stores or online. The main difference between the two is that a debit card uses available funds in your bank account, while a credit card allows you to borrow money and repay the amount at a later date.
When you compare credit cards, you will see each card has two main rates. Each time you use your card, the relative rate will be applied to your purchase or withdrawal:
The lender will issue a statement each month, which will indicate the outstanding balance, interest accrued, and your required minimum repayment amount. This amount is generally between 2 and 3% of the outstanding balances, plus any fees or other charges accrued.
Credit card payments automatically reduce the debt which accrues the highest amount of interest:
It’s important to understand both the purchase rate and cash advance rate before applying for a credit card, as higher rates may increase your minimum repayments.
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:
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.
You can apply for a credit card online, at a bank, and with certain businesses. 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 used to assess your ability to comfortably meet repayments, and to determine your credit limit, and may include:
If you are self-employed, you will need to provide previous tax assessments instead of payslips. You may also need to provide information about your accountant.
Before applying, you will need to check your documents and ensure they are accurate. Incorrect information may cause delays in approval and, in some cases, lead to your application being declined.
Once your application is submitted, it can take up to four weeks before your credit card is approved and ready for collection or delivery.
To compare credit cards, you will need to consider how you plan to use the card, and whether the card you wish to apply for will meet your requirements for:
You can learn more about each of these in the individual sections below.
The credit limit of your credit card is the total amount of funds made available by the lender. It is not calculated as a monthly or yearly limit, but as a full line of credit. The average credit card limit is $9,500 in Australia, and the amount offered by a lender will depend on your:
Different credit cards will have different minimum and maximum limits. For example, a premium credit card may have a minimum limit of $15,000 and a maximum of $100,000, while a student credit card may have a minimum limit of $500 and a maximum of $20,000.
Credit card purchase rates and cash advance rates will vary between cards and lenders. Interest is generally calculated daily on the balance owing and is charged once per month. Interest for Australian credit cards is often charged on top of an annual fee, as well as other charges that you may be liable for.
You may also see introductory rates offered on certain cards, which will apply for a specific amount of time before reverting to a standard purchase rate after the introductory period has concluded.
Some credit cards include interest-free days, where the card issuer will only charge interest on a purchase after a set period of time. The number of interest-free days will depend on the card you apply for, however it’s common for credit cards to include an interest-free period of 55 days.
With most cards, your interest-free days start on the first day of your statement period, and not on the day you make a purchase. Your statement period will vary depending on the terms set out by your card issuer.
If you pay off your card’s balance in full within the interest-free period, you may not be charged any interest on your purchases. However, if you do not pay off your balance in full:
Interest-free days will only apply to purchases made using your credit card. Cash advance withdrawals accrue interest from the day you make the withdrawal.
Credit card fees can range from $0 up to $1,750, depending on the type of card offered. Cards with the most features and benefits will also generally have the highest fees. When comparing credit cards, consider how you plan to use the card and which fees will apply.
For example, if you plan to use the card mostly for overseas online purchases, you may decide a card with no foreign currency conversion fee is most suitable. In the table below, you can see the various fees that may apply to your credit card.
Most credit cards have a yearly fee. Fees can range from $0 to $700+ with platinum and black cards charging the highest fees.
|Subsequent card fee|
Some lenders will charge you an additional yearly fee for each other card that’s part of your account.
|Foreign currency conversion fee|
An additional charge for transactions made outside of Australia. The most common foreign currency conversion fee is around 3%. This fee is charged independently from the exchange rate.
|Over-the-counter payment fee|
An over-the-counter payment fee is charged when you pay your credit card bill in person, with fees starting at around $2.
|Over limit fee|
The most common fee to be charged if your balance exceeds its limit is $40.
|Late payment fee|
If you cannot make minimum payments, you could be charged a late payment fee between $10 to $35.
|Cash advance fee|
Using your credit card to withdraw cash can cost you up to 5% of the withdrawn amount 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.
|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.
Credit cards with rewards systems will often come with higher additional fees or qualifying criteria to access the various rewards. Each time you use your rewards credit card, you can accrue points that can be redeemed for a variety of products and services such as:
Store credit cards, hotel credit cards, and premium credit cards all offer customer rewards for making significant purchases. If you are looking for a cheap credit card, you may wish to consider a low-interest credit card without rewards.
There are many types of credit cards available in Australia. Each card has a main feature - such as low purchase rates or a balance transfer offer - and some cards may have multiple features. How you plan to use your credit card will determine which option may be more or less suitable for your personal situation.
|Type of Credit Card||Main Feature|
‘Plain Vanilla’ Credit Card
Plain vanilla - i.e. basic - credit cards are the most simple. They come with fewer fees and rewards, and the annual fee is typically waived.
Balance transfer credit cards let you switch the balances between credit cards.
Student credit cards are targeted specifically towards students who have little to no credit history.
A travel credit card allows you to earn frequent flyer points that can be used towards flights, accommodation, and other travel perks.
Rewards cards focus on rewarding your spending. They often have higher fees, and include a range of premium credit cards, store cards, and frequent flyer 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.
Low-interest credit cards have low purchase rates and fewer rewards.
A 0% purchase credit card offers an initial interest-free term for purchases, and will revert to standard rates once the interest-free period has expired.
No Annual Fee
No annual fee cards waive the annual card fee through a promotional period (i.e. one year free), or on a rolling basis subject to certain conditions.
Business credit cards allow you to open a line of credit and consolidate petty cash. All of the perks of personal credit cards also apply to business cards such as rewards schemes, interest-free days, and balance transfers.
No Foreign Transaction Fee
No foreign transaction fee credit cards do not charge a foreign transaction fee for purchases made outside of Australia.
A secured credit card requires a deposit and is designed for people with bad credit. Secured credit cards have a credit limit up to the amount secured.
Zero-interest credit cards come with a promotional interest-free period up to 15 months. Once this promotional period expires, the card reverts to an annual interest rate.
Store credit cards are offered by specific retailers to earn points as part of their rewards program. A purchase rate will still apply to your transactions and there may be interest-free days available.
Premium credit cards generally have the highest annual fees and 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. Premium credit cards offer:
Gold cards are entry-level premium cards. They might be suitable if you’d like to get more benefits from your credit card without paying a high annual fee:
Platinum cards are a step up from gold as they offer more premium features and higher credit limits:
Black cards are the highest tier of credit cards with the highest spending limits and the most benefits:
Your credit card may include various types of complimentary insurance and protection, which is especially common with premium cards. Depending on the card you apply for, you may receive:
For both price protection and purchase protection, certain conditions will need to be met for your claim to be eligible. These will vary between credit card policies, so ensure you understand the criteria set out by your card issuer before applying.
Credit cards are used to access a line of credit from a bank or credit union. There are a variety of cards, lenders, and features available in Australia, and each type of card has its own benefits. Learning how to compare credit cards and their features is a crucial step in deciding which card may be more or less suitable for your personal situation.
In summary, credit cards:
Most lenders require you to have good credit before they issue you a credit card. You can request a copy of your credit history from any of the main credit agencies in Australia before applying for a card.
You can apply for a secured credit card if you have bad credit. Secured cards involve offering a cash deposit equal to your credit limit. So if you deposit $1,000, your credit limit will be $1,000.
You can still get a credit card with no credit, however your application will be easier to approve if you have a stable source of income and can pass a credit check. You may find your options are extremely limited.
Cards that have a low credit limit are easier to get approved for than those that have high limits. Standard credit cards that don’t have a lot of extras or additional fees may also be easier to get approved for than gold, platinum, or black credit cards.
The cost of a credit card will depend on the type of card you apply for, and how you use it. You can often reduce the cost of your credit card by qualifying for interest-free days, and always repaying your balance in full each statement period.
The credit limit you can get largely depends on your income, assets, and credit score. A high income, valuable assets, and a clean credit score all increase the amount of credit you can access.
You can increase the credit limit on your credit card by calling your card issuer. The amount that you can increase your credit card limit to will be determined by the issuer and will often be subject to a credit check before additional funds will be made available.
It can take between three to four weeks for your credit card to be approved by a bank or credit union. You can expect to receive your card within 8 to 10 business days after you have received approval.
If you have applied for a credit card and wish to cancel your application, you will need to call the card issuer and ask them to process your request. If you were issued with an application number or reference when submitting your application, you can provide this to help speed up the process.
You can save on interest and fees by consolidating debt from multiple cards into one. This is called a balance transfer. You may find balance transfer cards with a 0% interest introductory offer to help you repay your debt without accruing further interest.
You can avoid paying interest on your credit card by repaying the full amount at the end of your statement period. You can also consider changing to a low-interest or interest-free credit card if you will carry the balance over from month to month.
The number of credit cards you can have is determined by the card issuer. There is no hard limit, and many people use multiple cards with different rewards structures to take advantage of various promotions. Be aware, however, that multiple cards with a high combined credit limit can negatively impact your credit score.
Supplementary credit cards are offered to people with good credit who want to pass on a secondary card to a spouse or other family member. The person who uses the card must be over 18 years of age. You remain responsible for paying the balance, interest, and fees on the supplementary credit card.
Some credit card companies allow you to overpay your credit cards while others will limit your payments to how much you owe. When you overpay your account, you may receive a refund or credit applied to your account.
Not activating your card will not hurt your credit score. The most likely course of action is that the card issuer will call you to ensure that you have received your card. There are generally no penalties applied for not activating a credit card.
You can cancel your credit card by calling your card issuer. A representative will inform you of the next steps and how you can pay off your remaining balance if necessary.
It’s recommended to dispose of old credit cards to prevent anyone from accessing your financial information. To properly dispose of your card, you will need to cut it up with scissors and disable the RFID chip.
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