What is the best credit card for you?
The best credit card for you is the one that matches your spending and repayment habits with the card that has beneficial features related to your personal situation. If you want to save money and get the most out of your credit card, you should work out how you are going to use your credit card and how you intend to pay it off.
There are lots of credit cards available and each has different features. Some cards have low interest features and others have a 55 day interest free repayment period. If you plan to use your card to purchase expensive items that will take many months to pay back, then a low interest rate credit card may be more important to you than an interest free period.
You will need to ask yourself a few questions about your spending habits as the answers may indicate what the best credit card for you is.
Questions to consider if you're looking at getting a new credit card:
- Will you pay it off every month?
- Will you pay only the minimum amount required?
- Do you already have multiple cards?
- Do you buy expensive items?
- Do you fly / travel a lot?
- Do you spend a lot on your credit cards?
- Is the credit card for emergencies only?
Key features that can vary between credit cards are:
- Interest Rates.
- Balance transfer interest rate.
- Interest free periods.
- Annual fees.
- Reward programs.
Features to consider |
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| Low Interest Rate Credit Cards | Balance Transfer Credit Cards | Interest Free Period Credit Cards | Low Annual Fee Credit Cards | Credit Card Rewards Programs | |
| Little use or emergencies |
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| Fully paid back each month |
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| Large purchases |
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| Consolidating cards |
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| Lots of purchases |
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Little use or for emergencies - Low Interest Rate Credit Cards
If you rarely use your credit card, or if you only have it to use in emergencies, then you may want to consider getting a credit card that has a low annual fee.
Fully paid back each month - Interest Free Period Credit Cards
If you are disciplined with your credit card purchases and usually pay back the outstanding amount each month, then you may like to consider the credit cards that offer interest free periods. The interest free period is the time from when make your purchase until the time when the credit card issuer starts to charge you interest, usually depending on your billing cycle. Some cards don't offer an interest free period, some offer an interest free period of up to 55 days, and there are some cards that offer even longer interest free periods.
Large purchases - Low Interest Rate Credit Cards
If you use your credit card for large purchases that you know will not be paid back within the interest free period but will take several months or more, then you should consider a credit card with a low interest rate. The interest charged on credit cards varies a great deal, with some credit cards charging close to 30% pa.
Consolidating credit cards - Balance Transfer Credit Cards
Over time you may have accumulated a number of credit cards. One reason to consolidate credit cards is that you will immediately benefit by paying only one annual fee. Annual fees range from around $0 to $30 to over $200, this option could suit you. Another reason to consolidate your credit cards is that most credit card issuers offer a deal called balance transfer. This means that the amount outstanding from the transferred credit card is charged a special balance transfer interest rate for a period of time.
Lots of purchases - Credit Card Rewards Programs
If you make lots of purchases each month then a card that rewards you for making purchases. Rewards programs typically give you points based on what you buy. The more you purchase the more points you earn. Rewards programs include areas such as groceries, airlines, petrol and major department stores.
Low Rate Credit Cards
You don't need to be an Aussie customer
Take control of your finances by paying a low interest rate on your everyday purchase
The ideal credit card for shopping
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