Credit Cards For Beginners

Information verified correct on February 6th, 2016

If you are about to apply for your first credit card, you may need some basic advice, so this article will provide a little information about credit cards for beginners.

You may be feeling a bit clueless regarding what to look for and what to avoid, but do not be disheartened. There are many individuals out there who have owned a credit card for ten or twenty years who still have no idea how to use them properly. So, here are the basics:

How Credit Cards Operate

Your credit card is a mini loan that you take out from the issuing bank each time you swipe it. Unlike writing a cheque or using a debit card, the money does not automatically come out of your account, but is actually borrowed from the issuer. You will then have to pay back the money within a short period, referred to as the interest-free days, or you will be charged interest on the amount that you borrowed. This is where many consumers run into trouble. Instead of paying back their debt immediately, they only make a small payment which then causes them to be charged interest fees and increase their debt even if they are not spending.

The good thing about owning plastic is that you will have all of those funds available to you whenever you need it. It is kind of like taking out a line of credit at your bank, only you only pay for it if and when you actually use it. You could own a card for years and never pay a dollar in interest fees, if you managed it properly.

When it comes to convenience and security, there is really no better way to spend then on plastic. You can carry just one card, and maybe a back up, and travel all over the world. Most plastic is backed by globally accepted names like Visa, MasterCard, and American Express. You can spend in any currency and the transaction will be exchanged to Australian dollars. There are fees that apply for these foreign transactions, so be aware of them. Even if you never leave Australia, you can spend with your plastic virtually anywhere you desire.

Security is something that is taken very seriously by the financial industry. They have worked hard to develop fraud protection services that monitor your account and notify you of any suspicious charges. They also have the ability to freeze your account should you be a victim of loss or theft. These companies usually have zero liability policy that forgives charges that are deemed fraud. It is in their interest to protect your finances and your identity and they do a good job. Ultimately though, you have to be responsible and smart to ensure that you do not fall prey to the fraudsters.

Getting And Using Your Credit Card

  • Choosing the right one – Choosing the right plastic can be a difficult decision. There are loads of options from all different financial institutions. They come with all different rates, benefits, and fees and are subject to different acceptance criteria. A good option is to think about how you will use your plastic and what features are important to you. For example, if you do not think you will use it often or only for emergencies, you might look for a no annual fee card.
    You might have a higher interest rate, but if the plastic is not used you could own it for free. Those who will use their cards a lot will either want one with a low rate if they will not pay if off in full each month or a good rewards program. Whichever one you choose, make sure it continually suits your needs and that you are not spending loads of cash to own it without getting a lot of value in return. Once you have picked the one you want, you can usually apply for it online and get a response in minutes. Your card will arrive in the mail within a week or so and you can start spending as soon as it is activated.
  • Interest rates – Interest rates are tricky so you need to pay close attention to how much you will be charged for your transactions. To begin with, when you see an advertised rate do not assume that it is the rate you will get. They usually advertise the lowest possible interest rate, but that is only available to people with a near perfect financial history. Once you apply, you will be awarded a rate that the issuer thinks is suitable, the better your credit history is the better rate you will get.You should also know that there are different rates charged for different transactions. You will probably have one rate for purchases, one for balance transfers, and another for cash advances.
  • Payments – The key to managing any plastic is making your payments on time each month. If you miss one or make a late payment, you will be hit with penalty fees and see your interest rate skyrocket. If you have a hard time remembering to make payments, you should consider doing a direct debit from your cheque account to your bill each month. That way you will never be late.Many consumers falsely believe that they can make only the minimum payment and still manage to get their bill paid off. This is a bad plan. The minimum payment will not send much to your principle balance so it could take years to pay off even a small debt. If you cannot pay your bill in full each month then pay as much as possible and try not to carry the balance forward for too long. Remember that the only way to take advantage of the interest free period is to have paid off your bill on the previous statement.Like most consumers, you probably want and need a credit card. There is nothing wrong with owning one as long as you understand how it works and are capable of managing it responsibly. The goal should be to only charge as much on it as you can afford to pay off at the end of each month. If you get behind, you should stop spending until you get the debt cleared, that helps to avoid getting into the debt spiral that lands so many consumers in trouble. If you can do that you can make the most of all the convenience, security, and other benefits of owning plastic without having to worry about the excessive costs.
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To Summarise:

Rule One: Compare

If you have bad credit history, then you may be limited to the type of credit card you can apply for, but being a credit card novice does not mean you can’t become an expert researcher to locate the right card for you. Only 6% of Australians surveyed in this year’s Australian Consumer Credit Card & Banking Survey went to a credit card comparison site before making their application. Nearly 60% only applied to their own bank. And yet the most important factor in choosing a credit card was deemed to be finding the most competitive deal. If those facts seem at odds, they are. Credit cards for beginners Rule One: Compare the market.

Rule Two: Important figures

Assuming you are checking out the various credit cards on offer, there are certain factors that you must focus on. You may well like the colour of the credit card, and the hologram thingy, but these should not be the deciding factors. If you think that’s being facetious, bear in mind that in that same survey mentioned above, 14% thought credit card colour and branding was important.

  • Interest rates – This is the rate that will be applied to your account if you fail to clear your balance in full each month. This is not exactly the same as the APR (which includes any associated fees broken down over a year), but for all intents and purposes, you can count these as the same. Typically, rates range from 11% to 20%, where the lower figure will usually result in higher savings.
  • Annual fees – Australian credit cards usually carry an annual account maintenance fee, although there are some offers that waive this. $30 to $60 would not be unusual for a regular credit card, but you need to make sure the lower fee is not to compensate for a much higher APR. Which option you choose will depend on whether you honestly believe that you will be able to pay off your balance in full each month. If so, the interest rate won’t matter, so a low or zero annual fee would be preferable.

There will be other figures to baffle you, such as special introductory offers and balance transfer deals, but the key points for a novice are the two listed above. You will also see rewards schemes offered. If they add to the deal, great. If you have to compromise to get them, or pay an extra fee, then you’re focusing on the wrong things. Credit cards for beginners rule two: Cut to the chase; realise what matters most.

Rule Three: Be sensible

This is the rule that many veteran credit card holders break. They overspend. This is the surest way to create a big debt, and accumulate interest. Keep an eye on your spending and make sure you are always able to clear your balance at the end of every month. Credit cards for beginners rule three: Budget, know your limits, and stay within them.

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Comparison of Low Interest Rate Credit Cards

Rates last updated February 6th, 2016
Complimentary Travel Insurance Cover Bonus Points Points per $ spent Purchase rate (p.a.) Balance transfer rate (p.a.) Annual fee
NAB Low Rate Credit Card
Manage your existing credit card balance with 0% for 24 months on balance transfers with a low annual fee.
VISA/MC: 0 AMEX: 0 13.99% p.a. 0% p.a. for 24 months with 2.5% balance transfer fee $59 p.a. Go to site More info
Coles Low Rate MasterCard
A low rate MasterCard with a competitive rate on purchases and a low annual fee. Also receive $100 off a single Coles Supermarket shop if you apply and are approved by 9 February 2016.
VISA/MC: 0.5 AMEX: 0 12.99% p.a. 0% p.a. for 6 months $49 p.a. Go to site More info
St.George Vertigo Platinum
Enjoy platinum card benefits with a long term balance transfer and 0% on purchases for 3 months with a low annual fee.
6 months VISA/MC: 0 AMEX: 0 0% p.a. for 3 months (reverts to 12.74% p.a.) 0% p.a. for 20 months $99 p.a. Go to site More info
American Express Essential Credit Card
Receive a $50 credit on eligible spend and get Smartphone screen insurance combined with a no annual fee for life card.
1 14.99% p.a. 0% p.a. for 12 months $0 p.a. Go to site More info
ANZ First Visa Credit Card - Exclusive Offer
Take advantage of this exclusive offer and enjoy 0% p.a. for the first 9 months on balance transfers and purchases when you apply by 29 February 2016
VISA/MC: 0 AMEX: 0 0% p.a. for 9 months (reverts to 19.74% p.a.) 0% p.a. for 9 months $30 p.a. Go to site More info
ME Bank frank Credit Card
A low interest rate on purchases and cash advances with no annual fee charge.
0 months 9.99% p.a. $0 p.a. Go to site More info
St.George Vertigo Visa
A low rate shopping credit card offering a low ongoing rate on purchases plus a low balance transfer offer.
VISA/MC: 0 AMEX: 0 0% p.a. for 3 months (reverts to 13.24% p.a.) 0% p.a. for 18 months $55 p.a. Go to site More info
Bank of Melbourne Vertigo Platinum
A platinum card with promotional rates on purchases and 0% p.a. for 20 months on balance transfers, complimentary insurances and 24/7 concierge.
6 months VISA/MC: 0 AMEX: 0 0% p.a. for 3 months (reverts to 12.74% p.a.) 0% p.a. for 20 months $99 p.a. Go to site More info
Commonwealth Bank Low Rate Credit Card
A $150 limited time cashback offer and a low ongoing purchase rate.
VISA/MC: 0 AMEX: 0 13.49% p.a. 5.99% p.a. for 5 months $59 p.a. Go to site More info
ANZ Low Rate
Save on your existing credit card interest with 0% for 18 months on balance transfers with a low annual fee and low ongoing purchase rate.
VISA/MC: 0 AMEX: 0 13.49% p.a. 0% p.a. for 18 months with 3% balance transfer fee $58 p.a. Go to site More info
ANZ Low Rate Platinum Credit Card
Access Platinum card features with a low annual fee, including overseas medical and travel insurance and a low interest rate on purchases.
6 months 13.49% p.a. 0% p.a. for 18 months with 3% balance transfer fee $99 p.a. Go to site More info
BankSA Vertigo Visa
A low rate credit card with 0% for 18 months on balance transfers and low ongoing purchase rate from BankSA.
VISA/MC: 0 AMEX: 0 0% p.a. for 3 months (reverts to 13.24% p.a.) 0% p.a. for 18 months $55 p.a. Go to site More info
Bankwest Breeze MasterCard
Enjoy low ongoing purchase rate with long term balance transfer offer.
VISA/MC: 0 AMEX: 0 12.99% p.a. 0% p.a. for 21 months with 2% balance transfer fee $59 p.a. Go to site More info
Citi Clear Platinum Card
Enjoy 0% p.a. for 9 months interest free purchasing and 0% p.a. for 9 months on balance transfers.
0 months VISA/MC: 0 AMEX: 0 0% p.a. for 9 months (reverts to 14.99% p.a.) 0% p.a. for 9 months $99 p.a. Go to site More info
Bankwest Breeze Platinum MasterCard
Enjoy Platinum card benefits offering no foreign transaction fees on online and overseas purchases, complimentary travel insurance and a promotional balance transfer offer of 0% p.a. for 21 months.
6 months VISA/MC: 0 AMEX: 0 12.99% p.a. 0% p.a. for 21 months with 2% balance transfer fee $99 p.a. Go to site More info
Bankwest Breeze Gold MasterCard
Receive premium card benefits with complimentary travel insurance and 0% p.a. for 21 months on balance transfers.
3 months VISA/MC: 0 AMEX: 0 12.99% p.a. 0% p.a. for 21 months with 2% balance transfer fee $89 p.a. Go to site More info
BankSA Vertigo Platinum
Experience Platinum card benefits with complimentary insurance policies and 24/7 Visa Platinum Concierge Service. Get 0% for 20 months on balance transfers and annual fee if you apply by 30 March 2016.
6 months VISA/MC: 0 AMEX: 0 0% p.a. for 3 months (reverts to 12.74% p.a.) 0% p.a. for 20 months $99 p.a. Go to site More info
Commonwealth Bank Low Rate Gold Credit Card
A low rate card that comes with up to 55 days interest-free on purchases combined with complimentary international travel insurance.
3 months VISA/MC: 0 AMEX: 0 13.49% p.a. 5.99% p.a. for 5 months $89 p.a. Go to site More info

No Annual Fee Credit Card Comparison

Rates last updated February 6th, 2016
Complimentary Travel Insurance Cover Bonus Points Points per $ spent Purchase rate (p.a.) Balance transfer rate (p.a.) Annual fee
American Express Essential Credit Card
Receive a $50 credit on eligible spend and get Smartphone screen insurance combined with a no annual fee for life card.
1 14.99% p.a. 0% p.a. for 12 months $0 p.a. Go to site More info
American Express Velocity Escape Card -  Exclusive Offer
Exclusive Offer to finder.com.au

$0 annual fee for life, earn 15,000 Velocity bonus points when you spend $300 in the first 3 months.

15,000 bonus points VISA/MC: 0 AMEX: 1 20.74% p.a. 0% p.a. for 12 months with 1% balance transfer fee $0 p.a. Go to site More info
BoQ Platinum Visa Card - Exclusive Offer
Exclusive Offer to finder.com.au

Enjoy a $0 p.a. annual fee for the first year.

6 months VISA/MC: 2 AMEX: 0 20.74% p.a. 0% p.a. for 16 months $0 p.a. annual fee for the first year ($199 p.a. thereafter) Go to site More info
American Express Qantas Discovery Card
Earn up to 7,500 bonus Qantas Frequent Flyer points, plus take advantage of no annual fee for the life of the card. Earn 1 Qantas Frequent Flyer point per $1 spend.
7,500 bonus points VISA/MC: 0 AMEX: 1 20.74% p.a. 0% p.a. for 12 months with 1% balance transfer fee $0 p.a. Go to site More info
Woolworths Money Everyday Platinum Credit Card
Receive a $100 Gift Card with a $0 annual fee for the first year if you apply before 31 March 2016. Also get 0% p.a. for 14 months on balance transfers and earn up to 3 rewards points per $1 spent.
VISA/MC: 1 AMEX: 0 19.99% p.a. 0% p.a. for 14 months $0 p.a. annual fee for the first year ($49 p.a. thereafter) Go to site More info
ME Bank frank Credit Card
A low interest rate on purchases and cash advances with $0 annual fee for the life of the card.
0 months 9.99% p.a. $0 p.a. Go to site More info
ANZ Frequent Flyer Black
Earn up to 75,000 bonus Qantas Points when you spend $2,500 within the first three months and 1.5 points per $1 spent. Get complimentary airport lounge access, 24/7 concierge with $0 annual fee in the first year.
6 months 75,000 bonus points VISA/MC: 0.75 AMEX: 1.5 19.99% p.a. $0 p.a. annual fee for the first year ($425 p.a. thereafter) Go to site More info
HSBC Platinum Credit Card
Receive $0 annual fee every year if you meet the spend requirement. Enjoy a balance transfer offer and platinum card benefits such as complimentary insurances and concierge services.
4 months VISA/MC: 1 AMEX: 0 19.99% p.a. 0% p.a. for 15 months $0 p.a. Go to site More info
HSBC Credit Card
A no annual fee for the life of the credit card. Plus a low balance transfer offer and interest-free finance at over 1,000 retailers across Australia.
VISA/MC: 0 AMEX: 0 17.99% p.a. 0% p.a. for 6 months $0 p.a. Go to site More info
Coles No Annual Fee MasterCard
No annual fee for the life of the card and earn 0.5 flybuys points per dollar spent.
VISA/MC: 0.5 AMEX: 0 19.99% p.a. 0% p.a. for 6 months $0 p.a. Go to site More info
Virgin No Annual Fee Credit Card
No annual fee credit card with $100 cashback and a long term low rate balance transfer offer of 0% p.a. for 18 months with 2% balance transfer fee. Spend criteria applies for cashback offer.
VISA/MC: 0 AMEX: 0 18.99% p.a. 0% p.a. for 18 months with 2% balance transfer fee $0 p.a. Go to site More info
Bankwest Zero Platinum MasterCard
Complimentary travel insurance & 24/7 Concierge service and $0 Foreign Transaction fees. Plus enjoy a $0 annual fee.
6 months VISA/MC: 0 AMEX: 0 17.99% p.a. 2.99% p.a. for 9 months $0 p.a. Go to site More info
BoQ Blue Visa Credit Card
$0 annual fee for the first year and repay your credit card debt interest-free with a balance transfer offer.
VISA/MC: 1 AMEX: 0 20.74% p.a. 0% p.a. for 9 months $0 p.a. annual fee for the first year ($60 p.a. thereafter) Go to site More info
ANZ Frequent Flyer
Receive 25,000 bonus Qantas Points when you spend $2,500 within the first three months with $0 p.a. annual fee for the first year and earn 1 Qantas Point per dollar spent.
25,000 bonus points VISA/MC: 0.5 AMEX: 1 19.99% p.a. $0 p.a. annual fee for the first year ($95 p.a. thereafter) Go to site More info
Westpac 55 Day Platinum Credit Card
Enjoy platinum benefits offering complimentary insurances, 24/7 concierge, balance transfer offer of 0% p.a. for 16 months with $0 annual fee for the first year.
6 months VISA/MC: 0 AMEX: 0 19.84% p.a. 0% p.a. for 16 months $0 p.a. annual fee for the first year ($90 p.a. thereafter) Go to site More info
Bankwest Zero MasterCard
$0 annual fee for life credit card from Bankwest. Up to 3 cardholders complimentary.
VISA/MC: 0 AMEX: 0 17.99% p.a. 2.99% p.a. for 9 months $0 p.a. Go to site More info
28 Degrees Platinum MasterCard
No annual fee for life, up to 55 days interest-free on purchases and no foreign transaction fees.
20.99% p.a. $0 p.a. Go to site More info
Commonwealth Bank Low Fee Credit Card
No annual fee for the first year with low ongoing annual fee.
VISA/MC: 0 AMEX: 0 19.74% p.a. 5.99% p.a. for 5 months $0 p.a. annual fee for the first year ($29 p.a. thereafter) Go to site More info
Bankwest Zero Gold MasterCard
This credit features a $0 annual fee for life, a low interest rate balance transfer offer and complimentary travel insurance.
3 months VISA/MC: 0 AMEX: 0 17.99% p.a. 2.99% p.a. for 9 months $0 p.a. Go to site More info
ANZ First Student Card Offer
An ideal credit card for students with 44 days interest-free on purchases with $0 annual fee in the first year. Access your account on the go with the goMoney™ app.
VISA/MC: 0 AMEX: 0 19.74% p.a. $0 p.a. annual fee for the first year ($30 p.a. thereafter) Go to site More info
Westpac 55 Day Credit Card
Enjoy a balance transfer offer of 0% p.a. for 14 months with an annual fee of $0 p.a. for the first year.
VISA/MC: 0 AMEX: 0 19.84% p.a. 0% p.a. for 14 months $0 p.a. annual fee for the first year ($30 p.a. thereafter) Go to site More info
Commonwealth Bank Low Fee Gold Credit Card
Gold card privileges such as complimentary international travel insurance with interest-free days and $0 annual fee for the first year.
3 months VISA/MC: 0 AMEX: 0 19.74% p.a. 5.99% p.a. for 5 months $0 p.a. annual fee for the first year ($89 p.a. thereafter) Go to site More info
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Credit Cards Comparison

Rates last updated February 6th, 2016
Complimentary Travel Insurance Cover Bonus Points Points per $ spent Purchase rate (p.a.) Balance transfer rate (p.a.) Annual fee
St.George Vertigo Platinum
A platinum card with a low interest rate on balance transfers and purchases with a low annual fee.
6 months VISA/MC: 0 AMEX: 0 0% p.a. for 3 months (reverts to 12.74% p.a.) 0% p.a. for 20 months $99 p.a. Go to site More info
American Express Essential Credit Card
Receive a $50 credit on eligible spend and get Smartphone screen insurance combined with a no annual fee for life card.
1 14.99% p.a. 0% p.a. for 12 months $0 p.a. Go to site More info
NAB Premium Card
Long term balance transfer offer with premium benefits such as travel insurance.
6 months VISA/MC: 0 AMEX: 0 0% p.a. for 15 months (reverts to 19.74% p.a.) 0% p.a. for 15 months $90 p.a. Go to site More info
HSBC Platinum Credit Card
Receive $0 annual fee every year if you meet the spend requirement. Enjoy a balance transfer offer and platinum card benefits such as complimentary insurances and concierge services.
4 months VISA/MC: 1 AMEX: 0 19.99% p.a. 0% p.a. for 15 months $0 p.a. Go to site More info
Bank of Melbourne Vertigo Visa Credit Card
One of the lowest rate balance transfer deals combined with a low on-going purchase rate.
VISA/MC: 0 AMEX: 0 0% p.a. for 3 months (reverts to 13.24% p.a.) 0% p.a. for 18 months $55 p.a. Go to site More info

* The credit card offers compared on this page are chosen from a range of credit cards CreditCardFinder.com.au has access to track details from and is not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of terms 'Best' and 'Top' are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your own personal financial circumstances when comparing cards.

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