Credit Card Types

Browse the different types of credit cards and find the one ideal for you.

Reward Program Credit Cards
Reward program cards allow you to accumulate points every time you use your card. Rewards points can be cashed in for Cash, Petrol, Flights, Upgrades on Flights, Supermarket vouchers, electronics and many other items – see here for a list of products and services you can potentially earn from your rewards program. They generally have higher interest rates as well.

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To find out how reward and low interest cards weigh up against each other, along with how much you actually need to spend on a rewards card in order to gain money, see our reward & low interest comparison article.

Some of the types of Reward programs include:

• Petrol Credit Cards – These cards allow you to get discounts on your petrol purchases, all other items at the service stations and cashback on things you spend everywhere else. If you buy a lot of petrol and groceries then this card can save you a lot of money if it makes sense.

• Frequent Flyer Points Credit Cards – These cards allow you to accumulate credit card QFF points that can be redeemed for seat upgrades to business or first-class, pay for tickets or purchase other items on the Qantas Frequent Flyer Program. < A review of the QFF program as compared to the other airline programs)

• Cashback Cards – Cash is one thing that is great to get back on any credit card because it means you are getting a discount on whatever you buy. Cash is repaid back on your card at the end of each month.

• Supermarket Credit Cards – You gotta buy groceries! So you may aswell save some money when you do it. With the Woolworths card you earn shopping cards that are immediately redeemable at Woolworths and the other related stores in their group. Example, To get a $20 shopping card you would need to spend:
  • $3,448 at non Woolworths stores
  • $1,724 at stores and groups related to Woolworths
  • $1,149.33 at Woolworths itself
  • Compare the Reward credit cards here.
  • Compare Reward Programs and their Point Value here.

Gold/Platinum Credit Cards
These are a subset of rewards credit cards and generally have a little more Luxury, special services and travel insurance. Its important when selecting one of these cards to:

• Compare the rate at which you earn points – Some cards earn you more points faster for every dollar that you spend. E.g. $1 = 1 point vs $1 = 3 points (That is a better rate!)Â
• Cappings of points accumulation per month – Some cards cap how many points you can earn in a month, this might limit how many points you earn if you spend more than the cap each month. Try and balance your monthly spends with your points caps.Â

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For instance, if you only earn 2 reward points for every $1 spent until $15,000 has been spent each year, you may find it necessary to go out of your way and spend until you’re capped. After that, you can tone down the spending as the rate of return would have typically dropped to 1 point for 1 dollar.

• When the points expire – Some cards points expire after a certain time period. This will force you to acquire points quickly before they expire to cash in something big. Try and get a card without expiry if you want to store you points up for a long time.Â

As far as reward programs go, the more it costs to maintain, the more benefits such as ‘no point expiry’ will be thrown in. Practically all gold and platinum cards feature no point expiry, whereas free programs like FlyBuys expire after 3 years.

• Its also important to consider how much a program’s points is worth  when it comes to cashing them and or converting them into Qantas Frequent Flyer program points.

Gold and platinum cards require quite high credit worthiness although offer very high credit limits as a result of strict approval.

• Compare the Gold and Platinum credit cards here.

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No Annual Fee Credit Cards
Not paying an annual fee is great when you don’t use your credit card very much. these card are not for you if you are going to carry a balance on your card because you are going to pay up big with interest. To get an idea of how much interest you’d pay in comparison to a regular credit card, use our free quick and easy interest calculator here.

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Ideal as a backup card or for people who just want to make online purchases but want to credit the cards before they make the purchases so that you don’t have to pay interest. There are a couple of catches and minor nuisances that may occur from no annual fee credit cards. To avoid these, check out ‘4 ways to get stung by a no annual fee card‘.

• Compare the No Annual Fee credit cards here.

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Low Interest Rate Credit Cards
Carrying a balance on your card? Know you are going to need to carry a balance for a while? Definitely consider getting the lowest rate you can possibly get on your card. Credit card interest can stack up quick and you don’t want to be stuck paying off your balance for the next 5 years, calculate interest repayments can be insightful.

• Compare the Low Interest Rate credit cards here.

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Low Balance Transfer Credit Cards
A balance transfer is when you use one credit card to repay the debts on another credit or store card you already had. So, you now owe it the money instead, hopefully at a special cheap rate. Be careful with these but there are some nasty traps you can fall into that could make your debt worse.

Some of the types of Balance Transfers include:

• 0% for 6 Months – This means you will payoff your old card or multiple cards with the new one and receive 0% interest on the new card for 6 months. After the 6 months
• 2.9% for 12 Months – 12 months balance transfers generally have a slightly higher interest rate than 6 months transfers.
• ‘For Life’ Balance Transfers – These transfers last for the rest of your life! This means you have your entire life to pay them off and your interest rate is fixed for life.

• Compare all Balance Transfer credit cards here.
• Use our Free Balance Transfer Calculator here.

Low Cash Advance Credit Cards
Cash advance rates are the interest rates you are charged when you withdraw cash from your credit card. Normal purchases are different to this as you will get a statement and will not be charged interest if you repay it before the interest free days period is up.  Cash advances therefore cost more although provide you with access to cash when you really need it. See the our article on the Ideal times to use cash advance credit cards here.

• Compare the Low Cash Advance credit cards here.

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Student Credit Cards – These cards are ideal for students and have special benefits to them. In general students receive a lower limit although get a lower annual fee. See our guide to student credit cards in Australia for more information.

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Debit Credit Cards
Debit card allow you to use all the functionality of a credit card although use the funds in your bank account as opposed to borrowing money from a provider. See the benefits of a debit card here. These can be perfect if you are trying to not get into debt because you can only spend the money you have in your account, and you still have the access to make online purchases. Take care not to spend more than what’s in your savings account – if you do so, you will go into overdraft, and be hit instantly with a generally harsh two figure fee.

• Compare the Debit cards here.

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Business Credit Cards

If you run a business and use a credit card you may aswell get the best interest rate and earn as many frequent flyer points as possible! <Link to article about “Maximising Your frequent flyer points with your business – Talk about using the card for all purchases that the business makes”>

• Compare the Business credit cards here.

Reference articles
Hot to choose a credit card – Fido