Best Credit Cards in Australia

Written by Robert Ferry on January 22, 2022
Best Credit Cards in Australia

Credit cards are a valuable and convenient way to pay for anything, so they are in demand. Each individual will have a different credit limit on their credit card directly related to their financial situation. The financial situation will include their credit score and creditworthiness to pay back the amount they borrow on credit using the company's credit card.

Debit cards are very different from credit cards since they don't share the same perks that a credit card user does. In the case of a debit card, a person would need to have a certain amount of funds in their account, which they can consume by using the debit card. But with a credit card, an individual can borrow funds from an accredited creditor like a traditional bank, credit union, or even a lender.

The money borrowed on credit is paid back to the person over time but within a scheduled period. The amount returned is more than borrowed because the interest rate is incorporated into that amount. Hence, the amount returned is principal payment plus the interest applied on that payment. 

In contemporary times, people don't carry enough cash with them. Instead, they keep credit cards with them to pay their bills. Credit cards are not just for those individuals who live a luxurious lifestyle and spend a lot in their everyday routine. People who are tight on liquid cash utilize credit cards to pay for food, gas, and other necessities of life.

The banking business has expanded in the past decade, thus introducing new and various types of credit cards. Among these are travel credit cards, rewards credit cards, flyer credit cards, etc. Each credit card has its advantages and drawbacks.

The article will discuss the different types of credit cards offered by creditors. Moreover, we will look at the features that credit cards provide. We will also discuss the different costs and expenses linked to credit cards. Lastly, we will discuss the best credit cards that Australia offers.

 Let us talk about the different credit cards.

Main Types of Credit Cards

Creditors have to offer several types of credit cards depending on your preferred choice and need. Check out the following types of credit cards to know which one would be most suitable for you and your needs.

Balance Transfer Credit Card

With the help of this card, a person can transfer their existing credit card balance or debt to a new credit card incurring no interest rate in the transaction. The 0% balance transfer offer is just for a limited time, and when it expires, it is wise to use it while you can. The offer time could last as low as six months to three years. All balance transfers will have zero per cent interest rates within this duration.

Moreover, as the offer period concludes, the interest rate changes from 0% to its standard purchase rate usually, the rate increases to a higher one after the period's expiration. In the case some debt is still left to be paid even after the offer period is over, it would be subjected to an interest rate, resulting in greater interest payments. So it is important to know how much monthly payments a person needs to incur to avoid interest payments.

It is crucial to understand how balance transfer works since the offer is only for funds transferred to the new card, so only the existing debt applies to the balance transfer rate. Hence, any new purchases made on credit with the new card will not cater to the 0% interest rate offer.

Furthermore, suppose a person has decided to pursue with balance transfer offer. In that case, they will not be able to enjoy the benefits of other free days offered unless their debt for balance transfer is completely paid off.

Low-Interest Rate Credit Card

With this type of credit card, a person would have to pay lower interest on every transaction incurred using the card. Some individuals like to keep a certain amount of debt on their credit card and do not pay it back in full every month, so they must keep a card that offers a lower interest rate on the payment. A low-interest rate would mean that the interest payment would incur 10% to 14% of the transaction amount.

Some individuals wish to make hefty purchases like plane tickets, home theatres, etc. They need some time to pay off the transaction amount to take advantage of a low-interest rate credit card.

Low interest-rate credit cards do not offer other privileges like rewards programs, travel insurance, etc. If you are looking to enjoy those perks, too, it is better to look at alternatives. These low-interest-rate cards come with an annual fee that each user has to pay annually, but it is relatively cheaper than some other cards that include rewards cards.

Interest-Free Credit Card

The name suggests that interest-free credit cards charge zero interest for a limited period. The introductory period can be set anywhere from 6 months to 18 months, depending upon the creditor or the credit card company. But when the introductory period concludes, the interest rates return from 0% to the normal purchase rate.

However, some interest-free credit cards come with a 0% interest rate for an unlimited time, usually till the expiration date of the card. So those individuals that are seeking to make big purchases soon and require some time to pay off the due payment can enjoy all the benefits that this card has to offer, primarily the 0% interest rate.

Interest-free credit cards are for those individuals who would like to pay off their dues before the introductory period ends. These people must be conscious of what they are buying and do not give in to the 0% interest rate offer and pay their debt in time. If that is not the case, they would have to pay interest payments when the introductory period is over. Hence, it is advised to buy what you need and refrain from unnecessary spending.

No Annual Fee Credit Card

A person who prefers to use their credit card for every transaction and does not value about rewards program; also chooses to pay off all the dues and balance in their card, is suitable for no annual fee credit card. As the name suggests, the card will have no annual fee, so the cardholders will not have to worry about paying any annual fees. That individual will not have to think about interest rates since he pays the debt in full every month.

However, some creditors offer no annual fee credit cards and some perks that include rewards programs and complimentary insurances. These are some tempting offers by the creditors which attract several users. These specific cards are known as "Low Fee credit cards." But the primary purpose of a no annual fee credit card is to own a credit card that does not involve paying an annual fee.

Rewards Credit Cards

A reward credit card offers cardholder rewards programs that include earning reward points on purchases and transactions. Some creditors provide more perks that include cashback on spending like groceries and fuel, along with vouchers to certain outlets which would offer you a special discount.

Rewards credit cards can be used for almost anything ranging from purchasing gift cards to discounts on travel. To enjoy such perks, a person has to pay some cost that includes a relatively higher annual fee compared to other credit cards. Furthermore, each transaction will be prone to a higher interest rate, which means high-interest payments. Hence, a cardholder needs to be certain that they can redeem all these benefits since they are paying a higher cost for it.

An important thing to keep in mind for the cardholders is to pay off any dues or debt they owe to the creditor every month to avoid interest payments. Any unpaid dues would negate the value of the rewards you will earn by using the card on every transaction.

Travel Credit Cards

Travel credit cards are only used to pay for every cost and expense incurred during the travel. It is imminent that a holiday in a foreign country is not cheap and would incur a wide array of expenditure. The expenses may account for flights cost, accommodation fees, food expenses, and all the necessary costs related to travel.

Currency conversion can be tricky, and the wrong card might cost you a lot more than the travel credit card. For example, if a person were to use their standard credit card and spent about $10,000 on holiday overseas with a conversion fee of 3%, that would mean that they suffered a loss of $300. However, if that person were to have a travel credit card that accounts for all the currency conversion, they could save $300.

So it is evident that in the case of travel or holiday overseas, a travel credit card is more useful than any other card.

We will discuss some key features that credit cards have to offer.

Features of Credit Cards

All credit cards come with unique features that attract customers. Let us discuss some features that you should look out for; they include:

Interest-Free Days

On interest-free days, a person will not pay any interest on the transaction amount where the card is used to pay. These days typically have a life of one to two months as they commence when the statement period begins and ends on the credit card's due date.

If a person cannot pay off their statement balance entirely during this time, they will not receive any further interest-free days when the next statement period begins. So it is advised to pay the entire statement amount before the period end. Some cardholders use the "direct deposit" feature, which pays the due amount per month from their account to the creditor. In that way, they don't miss any dues or payments.

Purchase Protection

Purchase protection is complementary insurance that safeguards those who spend a lot daily. The insurance is for a specific time of 3 months and helps protect the cardholder from theft, fraud, and other financial damage that may occur.

Extended Warranty

Extended warranty is another complimentary insurance that provides you with a safe passage for a limited time. People fond of making hefty transactions using their rewards credit card would know that each big item comes with a warranty. For a specific amount of time, the company will protect the goods you buy. To enjoy this benefit, you need to qualify the eligibility criteria to make the transaction using only the card.

Travel Insurance Abroad

Each travel credit card comes with complimentary insurance that protects them in specific ways. To know if you are eligible for such a benefit, you must contact your credit card company and activate this benefit as it requires some assurance. The assurance might include paying part of the travel expenses to the company's card and sharing itinerary details.

Zero Liability Policy

This credit card scheme protects you from any unauthorized transactions you did not approve. And the entire amount involved in that transaction would be returned to you. However, you need to possess your card and know the pin and key details linked to the account, the card, and the account holder.

We should also know about the fees linked to the credit card. Let us discuss it.

Credit Card Fees

Although credit cards bring great comfort, they also charge users some necessary and hidden charges. According to financial experts, you must know about the various fees you might have to pay to enjoy your card services. Some high costs include the following:

Annual Fee

Credit card companies will charge an annual fee for using their services through a credit card. These annual fees can be lower or higher as they depend on one creditor to another. Some people choose those cards with a high annual fee because they wish to enjoy the benefits of that card. So to enjoy those perks, they have to incur necessary costs that include a high annual fee.

Some credit cards with a high annual fee include rewards credit cards, travel credit cards, etc. But some people would like a card with little or no annual fee. So for those people, experts suggest no interest in credit cards. These people would not like any perks so a low-interest credit card would be the most suitable.

Cash Advance Fee

Whenever a person has to withdraw cash from their credit card, they will have to pay a withdrawal fee. The withdrawal fee is different for each bank, but it is usually about 3% of the amount withdrawn. That person will also be prone to a cash advance rate, which is different for each bank. The cash advance will be charged even during the interest-free period unless the credit balance is paid off in full.

Foreign Currency Conversion Fee

People fond of using their credit cards to pay for the expenses incurred during their trip overseas will have to pay a fee. The fee is relatively higher with a standard card than the rewards card or travel card, accounting for foreign currency conversion fees as part of the perks and features. The foreign currency conversion fee is usually 0% to 4% of the transaction amount.

Late Payment Fee

When a balance is paid off after the due date has passed, a late payment fee will be linked to it, which the customer will have to pay. Sometimes, creditors write off such a fee if that is the first time they have paid late. If that is not the case, they have to pay the cost. The price depends from one creditor to another but is usually $10 to $30 along with the interest charges.

Let us highlight the best credit cards in Australia.

Best Credit Cards in Australia

Australia has a huge market for credit cards which ensures the banking industry is competitive. Let us look in detail at what each card has to offer.

American Express Low Rate Credit Card

As the name suggests, the American Express low rate credit card provides favourable interest rates to its users. The card offers various features that include

  • Purchase Rate: 8.99%
  • Annual Fee: None
  • APR: 0% APR for first 15 months; variable APR after that period
  • Interest-Free Days: About two months
  • Late Payment Fee: $30, which is relatively higher
  • Balance Transfer Rate: 0% BT for first 15 months; 1% after that period

The card has a few perks, including "card refund" and "purchase cover." These are insurance protection measures that ensure that the customer's finances are safe. Such modest benefits bring confidence to the cardholders to shop with ease and convenience without any worries. 

The company bears the cost or deals with the store that refuses to take back a newly purchased item paid with the card with card refund cover. The company covers the cost of stolen or damaged products whose transaction was carried out with the card with a purchase cover refund. Moreover, the company also protects you from any online fraud where a transaction happened on your card that you did not approve.

Westpac Low Rate Credit Card

The Westpac low rate credit card is known for its low and considerable rates, including APR, balance transfer rate, etc. The card has the following features, which include

  • Purchase Rate: 13.74%
  • Annual fee: $0 for the first year; $59 after that period
  • Balance Transfer Rate: 0% for first 16 months; 21.49% after that period
  • Balance transfer fee: 1%

The credit card is compatible with many other payment platforms such as Apple Pay, Samsung Pay, and Google Pay. Moreover, the card offers exactly 55 interest-free days and charges $15 for any late payments on debts.

There are some general requirements that a person needs to fulfil to get the card. They include having a minimum credit score of 500 and a $30,000 annual income. A customer can earn cashback rewards too. For instance, spending $1000 or more in a month would yield them $100 cashback.

American Express Qantas Ultimate Card

The American Express Qantas Ultimate Card has certain benefits due to which it can draw a large number of people to become its regular users. The card comes with a series of perks that include the following

  • Annual fee: $450 annually
  • Interest Rate: 20.74% on all purchases
  • Interest-Free Period: About 44 days
  • Sign up bonus: 120,000 Qantas points

To be eligible to earn the sign-up bonus, a person needs to sign up for the card and spend about $3000 or more in the first three months to earn the Qantas points. A person can gain more Qantas points as well. For instance, on each dollar spent, a person can earn 1.25 Qantas points on all purchases except at the government institutions. Moreover, an individual can get 2.25 Qantas points on each dollar spent on Qantas-approved products.

Further benefits would include receiving funds from the company if a person booked their flights to American Express Travel. The funds amount to $450 that can be used for both domestic and international travel. Also, a cardholder can enjoy the perks of airport lounge excess for a limited time. Like each year, a cardholder will receive complimentary entries and invitations to AMEX lounge entries and Qantas club lounge.

Great Southern Bank Platinum Credit Card

The Platinum Credit Card by the Great Southern Bank comes with a series of benefits and is most suitable for travellers. The reason is that it provides them with travel insurance along with purchase protection on all transactions. The following are the features

  • Purchase Rate: 19.99% per year on an annual basis
  • Interest Rate: 21.74% annually
  • Interest-Free Period: About 55 days
  • Balance Transfer Rate: 0% for first two years

For the first year, there is no annual fee, but after that period, the company charges $149 on an annual basis as an annual fee. The card also comes with a minimum credit limit of $5000. Some other perks that cardholders can enjoy are that they earn rewards points for every dollar they spend on purchases and transactions.

The card is compatible with other payment platforms like Google pay and Apple pay. Moreover, the card comes with 24/7 customer service for them in terms of emergencies. Hence, if the card is stolen or you feel that you have lost it, you can call up the emergency number of the bank, and they will help you. The card also provides travel insurance like protecting baggage and belongings of the customer that they bought with the card.

American Express Explorer Credit Card

The American Express Explorer Credit Card is operable in major countries like Australia, the USA, UAE, etc. The card is well known for its key features that include

  • Annual Fee: 395 per year
  • Interest Rate: 20.74% on all purchases
  • Interest-Free Period: 55 days per year
  • Sign up Bonus: 100,000 points after spending $4000 in the first three months

A cardholder can earn reward points. For instance, on transactions other than government bodies in Australia, you can earn 2 points on each dollar spent. Similarly, a person can earn 1 point per dollar if the purchases occur at government bodies.

With the help of American Express Travel, a person can earn some funds as rewards that can be used for both domestic and international flights. These funds amount to $400. Moreover, the cardholder will receive travel insurance for domestic and international travel. They will also enjoy perks like airport lounge access.

Bank of Melbourne Amplify Rewards Platinum

The Amplify Rewards Platinum card by the Bank of Melbourne will enable the cardholders to earn Amplify points. By acquiring these rewards points, they can utilize them by cashing them out on purchases or paying dues. The features for the card include the following

  • Annual card fee: $99 per year
  • Interest rate: 19.49% variable rate per year
  • Interest-free Days: About 55 days
  • Minimum credit limit: $6,000

When a person signs up for the card, they will receive 100,000 reward points as a sign-up bonus. These points are valued at $450 and can be enjoyed by the individual, provided that he spends $3000 on various transactions in the first 30 days.

There are complimentary insurances that come with the card, including travel insurance, which consists of hotel booking, travelling, products purchased on the card, etc. Apple pay, Google pay, Samsung pay can be used to pay for different purchases as they are compatible with the card. The card also has a fraud protection scheme that protects the customer.

Virgin Money No Annual Fee Card

The No Annual Fee Card by Virgin Money is known for saving funds for people by providing them with cost-effective services. The following table will show you the detailed features

  • Annual Fee: None
  • Balance Transfer Rate: 0% for the first year unless Interest-Free Days
  • Purchase Rate: 0% for first-year on all transactions; Changes to 18.99% annually after the period
  • Cash Advance Rate: 20.99% per year
  • Minimum Credit Limit: $2,000
  • Minimum Income: $25,000 annually

The Balance Transfer Rate changes to the cash advance rate after 12 months. This would also mean that no interest-Free Days will account for 12 months. The interest-free days account for 55 days unless the balance transfer period is active.

Bank of Melbourne Vertigo Balance Transfer Offer

The Bank of Melbourne Vertigo provides Balance Transfer Offer Cards to prospective customers. There are a series of key features that come with the card; they include the following

  • Interest Rate on Purchases: 13.99% per year
  • Cash Advance Rate: 21.49% annually
  • Annual Card Fee: $55 fixed amount
  • Interest-Free Rate: About 55 days

The card comes with several perks that include its compatibility with Apple Pay to accommodate transactions. The payment process is efficient and convenient for cardholders.

The company provides a mobile banking app that can be accessed without logging in to check for the balance. And this feature is valid for customers for about two months.

As a safety measure, the company has a protocol where you can temporarily freeze your card until the issue is resolved. The card can be in this state for up to 2 weeks while the customer service helps you sort the problem out. If the card is misplaced, they will deactivate it so that no transactions can occur from it. To activate this protocol, check the mobile banking app for further instructions.

MoneyMe Freestyle Virtual Card

The MoneyMe Freestyle Virtual Card links online banking with how customers wish to set up their fees. The card has some important features that include

  • Annual Fee: Directly proportional to the credit limit
  • Interest-Free Days: About 55 days
  • Balance Transfer Rate: None
  • Purchase Rate: 16.99%
  • Rewards: None

The online application process is simple, quick, and can be completed in a few minutes. A customer will not need to wait to receive the credit card as they can access it via their mobile wallet. You can use Apple Pay and Google Pay to make payments.

A disadvantage of this card is that since there is no physical credit card so the person would need to have their phone all the time. The annual card fee is usually from $0 to $209. The customers are also subjected to a late payment fee of $15.

Conclusion

It is essential to know the banking industry concerning credit cards. Traditional banks, credit unions, and creditors offer various credit cards. Each of these financial institutions provides services to different kinds of credit types. It is crucial to know the perks each of the cards offers. Like the travel credit card is primarily for those people that often travel. Similarly, the rewards credit cards are for those that would like to enjoy the benefits and have the financial capabilities to pay for the costs.

Credit cards have different features, so anyone who owns them should know about them. They should be aware of the perks they could enjoy due to their credit card. Many people having a traveller credit card are unaware that they can enjoy complimentary lounges as perks for owning the card.

People need to understand the costs related to credit cards like annual fees, foreign currency conversion fees, and hidden charges.

The credit card industry in Australia is quite extensive, with each company having several credit cards that they are offering depending upon the person's needs and preference. So financial experts should know what you are looking for and then reach out to the relevant bank for credit card information and how to own one.

Article written by Robert Ferry
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