How to Compare Credit Card Types

Not sure what type of credit card to go for? Well, depending on what you’re going to use the credit card for, and how you plan to use it (e.g repay balance regularly, or let it accumulate) different types can mean a world of difference to the amount of money you keep in your pocket.

Which Credit Card is Best for You?
	Low Interest Rate	Balance Transfer	No Annual Fee	Rewards Programs	Quality Introductory Offers
Frequent Purchases		X
Large Purchases		X
Balance Paid Monthly
Debt Consolidation
Occasional Usage				X

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Low Interest Rate Cards

For frequent and expensive purchases, a credit card with a low interest rate will without a doubt be your best choice. Also, it is relatively imporant to pay back your purchases within the 55 day or 44 day ‘interest free period’, which will allow you to effectively pay $0 on your repayments.

For the ideal frequent spender who loves a low interest rate and modest annual fee, there isn’t much choice more appropriate than Money Magazine’s “Best Balance Transfer Credit Card 2009″  - The St George Vertigo MasterCard.

Click here for the St George Vertigo offer.

Balance Transfer Offers

A balance transfer is possibly the most over-looked method for debt consolidation in Australia. You can effectively max out say 2 or 3 credit cards which have a whopping interest rate of 20%.
From this point, you can perform a balance transfer and have the choice of whichever payment plan you prefer:

• 0% balance repayment over 6 months. See the St George Vertigo for the best 0% p.a. for 6 month balance transfer offer.
• 2.9% balance repayment over 12 months. See the ANZ Frequent Flyer Card for the best 2.9% p.a. for 12 months balance transfer offer.

Note: The ‘ X’s ‘ in Frequent and Large purchases in the balance transfer column is conditional. One of the biggest mistakes you can make is spending on a card which has had a balance transferred over to it, as you’ll be hit with higher interest and fees (subjective on the provider and card).

The easy solution to this is to simply spend on your other credit card if you have to, from which you originally performed the balance transfer from.

No Annual Fee Cards

No annual fee credit cards tend to have higher interest rates and 0 interest free days, making them a bad choice for frequent or large spending. However due to the lack of annual fee, if you only make a couple or so purchases a year, you’ll end up paying less than on a typical $60 annual fee card.

Note: If you’re interested in no annual fee, rewards AND a 44 days interest free grace period, look no further than the American Express’ Gold Ascent Card.

It features 19.99% on purchases/cash advances, $0 annual fee forever, and 44 days interest free.
While American Express does not have the acceptance of MasterCard or Visa, it is still widely accepted and the quality of the Gold Ascent features strongly outweigh its lack of acceptance.

Click here to see the American Express Gold Ascent offer.

Reward Program Cards

Everybody likes to be rewarded for spending. However, if you are paying interest on your purchases more than a few times a year, you’re most likely not getting the most out of your reward program, as reward program cards feature high interest rates and (generally) high annual fees.

If you can successfully repay your balance on time, then a reward program card will really shine, as you can reap hundreds to thousands of dollars of rewards only for the cost of your $50-$200 annual fee.

Since there are so many different rewards available across a horde of credit cards, you’re best off comparing cards at either:

• The Best Australian Credit Cards
• Australian Reward Program Credit Cards

Note: Even if you do make your repayments on time, it’s still fairly important to actually spend regularly as well, as this will earn the reward/membership points for you to redeem.

The X is present as a reward’s card has no use sitting around being used occasionally only to build up annual fees.

Introductory Offer Cards

Banks tend to promote their flashy and ridiculously low introductory offers in order to encourage you to take advantage and apply for their card.

While their introductory offers are actually quality and real, it’s important to go over the fine print carefully. This way, you can find out where they can hope to gain some money off you after the promotional offer has ended.

The best promotional offers in the Australian credit card market currently are:

• Woolworths ‘Everyday Money’: $0 annual fee for the first year.
  After the introductory offers have ended, the card remains a very impressive shopping rewards credit card, and reverts to 17.99% interest and a $49 annual fee.
• Commonwealth Bank Low Rate: 4.99% p.a. on purchases & balance transfer for the first 9 months. 

Please leave a comment if you wish to find out more or want to make a recommendation for others.

• Comparison of Top 10 Credit Card Offers

Editor's Choice: Our Top Credit Cards

Credit Card	Card Details	Interest Rate (p.a.)	Cash Advance Rate (p.a.)	Balance Transfer Rate (p.a.)	Annual fee	Interest free days (up to)
HSBC Credit Card	Editor's Choice: 0% for 6 months Balance Transfer & No Annual Fee Featuring a $0 annual fee for life, and 0% p.a. balance transfer for 6 months, the HSBC Credit Card was voted the Best Transactor Credit Card for 2010.	16.99%	20.75%	0% for 6 months	$0	55
Suncorp Clear Options Standard Visa Card	A great 12 month balance transfer offer, combined with a low annual fee and a good interest rate on purchases.	12.24%	17.99%	1.9% for 12 months	$39	0