Credit Cards

Selecting a Credit Card

Selecting and using the right credit card has become much easier and we believe in making the process even simpler and more cost effective. With so many choices available today in credit cards a consumer needs to take care and avoid the traps of excessive fees and high interest rates. Our researchers have looked at more than 100 different credit card offers and here we present a summary of the types of credit cards and the card features that will help you make an informed decision about which credit card suits your needs best.

Types of Credit Cards

There are four main types of Credit Cards available to Australians through banks and credit unions and other financial institutions.

MasterCard, Visa Card, American Express and Diners Club credit cards are the big four with the major Australian Banks and financial institutions offering either MasterCard or Visa cards to their customers.

Each of the major types of cards will have many variations that are tailored to specific needs some of which will be detailed below.

Credit Card Features

In such a highly competitive credit card market, each credit card provider will be promoting features that have proven popular with consumers. By way of illustration one of the most popular credit cards in the market has been one which offers users airline rewards. Airline rewards credit cards are a great incentive for people who don't use reward points for small household items and who would prefer to fund a holiday with reward points rather than redeem points for a new camera each year. Most reward schemes work on the basis of offering a frequent flyer redemption option where you can trade reward points for frequent flyer points. (See below)

Key features to look for in a credit card are:

Interest free period. Interest free credit cards refer to interest free days on purchases. This is one of the most widely used features by consumers as, when used appropriately, offers the benefit of spending with a credit card and saving money on interest charges. Some credit cards offer up to 55 interest free days on purchase.

Low or no annual fee. No or low annual fee credit cards are a benefit to people who only use their credit cards infrequently and who may therefore incur a high interest rate on both purchases and cash advances while receiving none of the benefit of interest free days. The feature is a benefit only if the credit card is used relatively infrequently and repaid in full by the due date.

Balance transfer facility. Balance transfer credit cards have become increasingly popular due to the fact that they enable debt reduction on multiple credit cards to be consolidated. The feature of a balance transfer facility is the low (and occasionally zero) interest rate offered for a specified term usually either 6 or 12 months.

Reward programs. These are designed to reward users who pay off their credit cards each month in full and who avoid interest repayments altogether. Consumers who use credit cards for the purposes of bill payment will have the opportunity to pay off the debt each month and receive rewards in the form of interest-free periods.

Premium (gold & platinum) cards. Somewhat of a status symbol, Gold and Platinum credit cards often have benefits that are unavailable on lower-end credit cards. For example, extra reward points on purchases.