How to select the right credit card for your needs

Whether you’re a big spender, love to earn rewards points or simply need a bit longer to pay off your debt

There are hundreds of options for credit cards out there — whether you spend a lot, are looking for rewards points, have the capacity to pay it off each month, or are looking to consolidate your debts onto one card.

Interest rates, annual fees and balance transfer periods can all factor into the choices you make.

TODAY looked at the best credit cards for different needs, and below we have outlined the differences between key types of credit cards to help you make an informed choice.

1. Low rate credit cards

GOOD FOR: People who are unable to repay their credit card debt in full at the end of each month – as the interest charged will be minimal compared to that of a more premium credit card.

PROS: Simplicity and low interest rates; they often have an annual fee of $100 or less.
Interest rates can vary but a good rule of thumb is to search for a low rate card with an interest rate of ~13%. Many financial institutions are launching low rate credit cards with rates of 10% or less, which is nearly half that of the average credit card in the market (20%).
CONS: Will not offer complimentary perks and benefits such as bonus frequent flyer points, free insurance and access to airport lounges; however, they will give you access to low interest rates, reduced fees, smaller credit limits, up to 55 days interest free on purchases and sometimes balance transfer specials (giving you 6-24 months of 0% interest to consolidate your other debts).

Top tip

You can search the low-rate credit cards currently on the market at comparison sites such as* and*

2. Reward point credit cards

GOOD FOR: People who spend a lot on their credit card.

Reward point credit cards offer a good way to be rewarded for your spending; whether it be via the credit cards own reward programme, cash back or frequent flyer points from your airline of choice (Qantas, Virgin or similar).

You can use sites like ‘Point Hacks’ to source introductory bonus offers, often giving you up to 100,000 bonus points for simply signing up. Sites like ‘I Fly Flat’ can teach you how to exploit these point schemes and quickly gather enough points to fly ‘flat’ aka Business Class for free.

A general rule of thumb when dealing with Australia’s most popular point scheme (Qantas Frequent Flyer) is that a point is worth in the vicinity of 1-1.5 cents. Using points to upgrade your existing flight bookings is one of the most effective ways to enjoy your points.

PROS: There are numerous ways you can maximise your ‘points earn rate’ by leveraging your credit card for all types of different spending including everyday purchases, bills and payments.
CONS: Often these credit cards have a higher annual fee and/or a reward programme fee to participate. It’s wise to ensure that your fees don’t outweigh the amount of rewards you will receive, as often these types of credit cards require quite a large amount of spending to earn enough points.

Top tip

You can click here to answer a few questions* on RateCity’s credit card matching tool and it will tell you which sort of card might be right for you.

3. Balance transfer credit cards

GOOD FOR:  People who want to pay no interest on their balance for a period of time.

Balance transfer credit cards are not a specific type of credit card as such, they are an introductory offer whereby you pay 0% interest (or thereabouts) on existing credit card balances you transfer for an extended period of time.

If you are opting for a balance transfer credit card to take advantage of the 0% interest rate for an extended period of time, it pays to do your research in order to find the longest possible balance transfer length (offers range from 6 months to 24+ months).

PROS: A long balance transfer can be a good strategy to  pay down your debt.
CONS:  You will sometimes be charged a fee of around 2% of the balance, and making too many balance transfer offers in a short period of time can negatively impact your credit score.

Top tip

Once you select your balance transfer credit card, the aim is to repay the debt in full before the 0% interest free period ends.

The best way to do this is to divide the total amount of debt by the number of interest free months and repay that amount each month.

E.g. $15,000 at 0% for 12 months = $1,250 per month for 12 months.

4. Gold and platinum credit cards

GOOD FOR: People who spend a lot, travel a lot and can afford the higher fees and interest rates.

Gold and Platinum credit cards are often designed to give high spenders access to complimentary services and benefits.

PROS: Common Platinum benefits include complimentary insurance (purchase protection, travel insurance or car hire excess insurance) and in some cases, can be worth their annual fee immediately. E.g. If you hire a car twice a year, the ‘excess’ insurance might be costing you up to $500. A gold or Platinum credit card offering complimentary car hire excess insurance will immediately save you $500 a year.
CONS: These benefits come with a much higher annual fee and interest rate thus are only useful if you are able to professionally manage your credit card spending and repay the balance in full each month.

Note that Gold and Platinum credit cards also come with higher minimum credit limits; this means you will need to accept a credit limit that is often $15,000 or more. This requires strong self-discipline to not over-spend and to ensure you repay your card in full each month (or else wear the consequences of an interest rate that is around 19% or more).

You can search the rewards card offers currently on the market at comparison sites such as* and*

* In highlighting particular offers we are not making specific recommendations as this article does not cover all available products and may not compare all features relevant to you. Any advice provided is general in nature and does not take account of your needs, objectives or financial situation. Individuals should consider their own circumstances, and if in doubt seek appropriate advice, before proceeding.

9Saver Partner offers RateCity Low Rate Cards