The inside word on shopping for a credit card
Credit cards. They're so handy to have, but when shopping for the right card for you, it can all get a bit overwhelming. Where should I go to get one? What features should I look out for? How much will I have to pay in interest and fees? Well we've taken the hard work out of shopping for credit cards by doing all the work for you!
Most credit card providers have a range of cards available; each with differing features, tailoring it to customers' specific wants and needs. Here are a few of the most common features that are of interest to people shopping for a credit card.
Interest rate
The rate of interest that you pay on your credit card purchases and cash advances is probably one of the most important factors to look out for when looking for a credit card.
Some providers will apply a flat rate, while others will have a certain rate for purchases and another for cash advances (i.e. at the ATM). Often banks will provide a low teaser rate for a certain time period to entice you into getting that specific card, i.e. 3% for the first six months, after which time the interest will return to the standard rate.
Interest-free on purchases
Although there is no set rule as to how long banks allow for interest-free on purchases, it is generally between 40 - 55 days. This is an extremely useful benefit as it means you can make purchases and not have to pay any interest on them, providing you pay your monthly bills on time.
Annual fee
Generally, the more features a credit card has, the higher the annual fee. You will find that providers will offer different categories for the same credit card, for example Standard, Silver, Gold and Platinum cards. As the implied value of the card goes up (i.e. from Silver to Gold), so do the benefits, as well as the criteria that is required, such as level of income.
Credit limits
Again this varies between banks and the different cards they offer. Cards such as Silver, Gold and Platinum will most often have higher minimum and maximum credit limits than standard cards. It is important that this is taken into consideration when deciding which card to get, as often people will get more credit than they intended and land themselves in financial strife when they go a little overboard with their spending.
Some banks also impose a daily limit on how much you can get out in cash advances. This is not especially important, but could become an issue if a substantial amount of cash is needed immediately.
Phone and internet banking
Due it's the convenience, phone and Internet banking have become an extremely common way for banks' members to go about their business. Almost all banking processes can be carried out by the touch of a button on the phone or keyboard, and there's no waiting in line.
Rewards program
Due to the competition in the credit card industry there are many more choices than ever before when it comes to the rewards that are on offer. Most often banks will give customers points in exchange for money spent (i.e. 1 point for every dollar spent on the credit card), which you can then redeem in exchange for a certain reward. This can include such things as flights, accommodation, appliances, electronic equipment, retail merchandise, and gift vouchers.
Rewards programs may seem like a major draw card when making the decision as to which card to get, but really should only be deciding factor if you are going to be using your card enough to actually build up enough points and take full advantage of the rewards on offer.
Free additional cards
Additional cards can be handy if other family members need access to the credit card. While this does not apply to everyone, it is useful, hence certain banks will give out up to nine additional cards as the members request. This can also be an advantage as it will help you accrue rewards points much faster.
Already got a credit card and found another that suits you better? Not to worry - you don't have to have two cards (the temptation could be too much). Some banks will offer special deals on balance transfers if you use them as your credit provider. For example, NAB offers 0% interest for the first six months If you transfer your balance to the NAB Low Rate Visa credit card.
Of course there will be other benefits that banks may offer that could influence your decision, but it really depends on a person's situation and lifestyle as to how important a factor they are. For example, if you travel a lot, a card that offers complimentary travel insurance would be extremely valuable.
So as you can see it pays to shop around, keeping in mind exactly what you need the card for, and how much you can afford to be paying back.
Cash Doctors has put together a table of 12 of Australia's largest Credit Card providers and details regarding the above features so you can compare them without having to search through a million different websites.
Find us on