How To Decide What Credit Card To Get

Whether it is your first credit card or your fifth, choosing a new card can be a time-consuming and difficult process.

First there are the cards you would like to have – those dream options that may combine features like low interest rates and rewards, without any annual fees – often only found in the form of introductory offers.

But a credit card’s fine print can turn the favourite option into the worst possible choice, which makes many people sceptical of the entire credit card market.

So how do you choose a credit card without reading through endless sets of conditions?

One of the easiest ways is to prioritise features based on what you actually want from a credit card. But if you’re not sure what features to focus on, the following summaries of different types of credit cards should make things clearer.

Balance Transfer Credit Cards

People carrying a credit card debt can find some repayment relief through a balance transfer to a card with a lower rate of interest.

Balance transfer rates are low for the introductory or honeymoon period, before reverting to either the purchase rate or cash advance rate, so picking a deal that gives you the most reasonable amount of time to pay the balance in full is usually the best option.

Low Interest Credit Cards

While balance transfer cards offer low rates for the introductory period, there are also cards with ongoing low rates.

Some of these cards just feature a low purchase rate, like the Virgin Low Rate card’s 12.99% p.a. but there are also low rate cards that apply the low purchase rate to balances, including the Bankwest Breeze and St George Vertigo.

Reward Credit Cards

These cards are probably the most popular option currently on the market, with both member-based reward programs as well as cards that earn frequent flyer points.

Most reward cards will earn people points or other benefits based on how much they spend on the card, so the more someone spends the more benefits they get.

These cards, however, usually have higher purchase rates and annual fees that could end up costing cardholders a lot, so rewards are only really useful if the potential benefits outweigh any upfront card costs.

No Annual Fee Cards

There are currently a handful of credit cards with no annual fee ever, often saving people hundreds of dollars in a year.

These cards often feature slightly higher interest rates than low rate options or less competitive reward options but the savings from a no annual fee card are easy to calculate.

Plus there are usually gold or platinum versions that have even more complimentary extras.

Deciding on a credit card often comes down to when and how the card will be used, but understanding the different types of cards available will help you make a decision that gets you a card that will work for you.