Top credit cards in Australia for April 2024: balance transfer, rewards and low rate deals

There are a few types of credit cards that dominate the market.  These include:

• Rewards credit cards - these credit cards often have higher purchase rates and annual fees in exchange for perks and rewards schemes. They are often linked to a specific points program, like Qantas Frequent Flyer or Virgin Velocity, and will offer a certain rate of points earned per AU$1 spent. 
• Low rate credit cards - A credit card with a purchase rate below 14% is generally considered  a low rate credit card. This means that if you carry a balance over at the end of the month, it will attract a smaller amount of interest.
• Balance transfer credit cards - These credit cards are designed for those looking to clear an existing credit card balance. They offer a low rate on a balance transferred over to the card, often 0% for an introductory period. It’s important to know what the introductory period is, as afterwards you may end up paying a much higher rate on any outstanding balance.
• No annual fee cards - If you tend to pay off your balance each month, there are also credit cards with no annual fees which could keep your costs even lower

You might also hear people talk about interest free credit cards. These tend to refer either to introductory offers for cards where you can score a 0% p.a. purchase rate, or credit cards that charge no interest and instead have a monthly fee that varies depending on their credit limit.

The features you will look for in a credit card will vary depending on what you need from your credit card. Some things to watch for will be:

• Interest free days - Most credit cards will have between 44 and 55 interest free days, a timeframe that starts at the beginning of your billing period in which you can pay off purchases without attracting interest. Some cards even extend this interest free period further. If you do not pay off your balance within one billing cycle, you won’t receive the interest free days for the next one.
• Complimentary insurances - Some credit cards will have certain insurances attached, which can be a handy feature. These can include extended warranty, purchase protection, price guarantee, international travel insurance, and transport accident insurance
• Travel perks - Along with travel insurance, certain cards (especially rewards cards and frequent flyer cards) may offer perks for travellers. These can include access to airport lounges or extended interest-free periods on flight bookings.
• Rewards - while rewards credit cards are obviously known for their perks, many cards offer advantages to their holders. You may be entitled to higher rates of points during certain periods, discounts at certain venues, cashback offers, or all manner or benefits.
• Extra cardholders - some credit cards will allow you to add extra cardholders for a small charge or no added fee. This can be helpful either for accruing rewards or for joint account holders.

Of course, the features you are after will all come down to what you are using your card for. If you are after a card that keeps cost down, the waiving of a first year fee might be an attractive feature!

When looking at credit cards, it’s important to be aware of the fees that can come along with them. Some common credit card fees to watch out for include:

• Annual fee - While some credit cards may waive the annual fee in the first year, this is a fairly standard fee for a credit card. These can range from absolutely nothing, all the way up to AU$1,200! Generally, a card with more perks and rewards will tend to have a more expensive annual fee, while lower annual fees tend to be connected to simpler cards.
• Late fees - Like with most things in life, you can expect to pay a fee if you’re late on making the minimum payment on your credit card.
• Minimum repayment - Speaking of, while you would ideally be paying off your balance in full every month, you’ll notice something called the “minimum payment” or “minimum repayment”. This is either a flat fee or a percentage of your balance owing and represents the absolute minimum you will need to pay to avoid attracting extra fees.
• Interest - Any balance not paid each month will attract interest. This is why the purchase rate of your card is so important! 
• Rewards program fees - Certain rewards cards may also require you to pay a fee to be a part of their rewards program. This may mean the annual fee for a Frequent Flyer or Velocity membership, for example.

There can also be other fees attached to your credit card, such as fees for making foreign transactions and fees for making cash advances.

The credit card application process will vary depending on the card you are applying for and where you are applying. 

Speaking generally, applying for a credit card will involve an assessment of your credit history and credit score. This will take into account any existing debts or past credit card utilisation to help determine your creditworthiness for the provider. 

You will have to supply a provider with enough points of identification to verify your identity, as well as proof of income and employment (which tends to be via payslips and bank statements). Certain cards will have earning requirements, and may require a statement from your employer.

If you are applying for a credit card with your current main bank, you may be able to skip much of the documentation process, as they already have a lot of your information on record. In some cases you may be pre-approved for certain credit cards. To apply for credit cards with higher credit limits or salary requirements, you may need to undergo an additional application process.

Using your credit card responsibly comes down to knowing your own limits and ability to make repayments. A big part of the battle is making sure that you choose the right card for you. Other than that, there are some simple tips you can stick to in order to make things that little bit easier.

• Only spend money you have - don’t treat your credit card as free money, because it is money you will need to pay back. Overspending can very easily lead to credit card debt, and can make repayments unmanageable.
• Pay your bill in full - as tempting as it is to make the minimum repayment on your credit card bill, paying the full balance will preserve your interest-free days and prevent any remaining balance from attracting interest.
• Avoid taking out cash - cash advances for withdrawing cash and making cash transfers are often charged interest at a significantly higher rate than the purchase rate, and there’s no interest-free period here! 
• Regularly check your card still suits you - financial circumstances change, and so do special offers. If you’ve paid down a balance, you might not need a credit card with a balance transfer offer anymore. If you’re not travelling with a specific airline anymore, it doesn’t make sense to hold a credit card that is partnered with them! There’s no reason to get locked in with a card that doesn’t suit you, so make sure you’re regularly reviewing your options and finding the option that’s best for you.

Ask for help when you need it - If you feel debt beginning to get overwhelming, it’s best to do something about it sooner rather than later. Contact your provider, who may be able to provide you with assistance, and seek help from the National Debt Helpline.