Best Credit Card In Australia: Monzi’s Secrets

Are you on the hunt for the best credit card on offer? Or just want to know a little more about the current credit card deals? Congratulations! You’ve come to the right place. Monzi is an expert lender-finding service on a mission to pair everyday Aussies with the most reliable lenders in our network.

But that’s not all! We also pride ourselves on providing our readers with the latest and greatest financial information on the market. Sound good? Read on to learn more about the best credit card available in Australia right now.

Please note, certain ideas and products presented in this article may not be offered by Monzi nor the lenders we work with. This article presents only general information. Consider seeking professional financial, taxation, legal or other advice to check how the information and ideas presented on this website relate to your unique circumstances.

What is a credit card?

Fantastic question! Essentially, a credit card is a small plastic card issued by a financial entity to their customer. Moreover, it allows holders of the card to make purchases with a pre-approved amount of money borrowed from the financial institution, which is typically a bank.

This set amount of money you can spend is called a ‘credit limit’. Then, you generally receive monthly statements about the use of your credit card. Whenever there is a balance on your card, you’ll have to pay interest on it.

Overall, a credit card is a tool that allows its holders to make purchases using a set amount of borrowed money.

What are the main features of a credit card?

Before Monzi can run you through what the best credit card is and how to find it, we need to know more about credit cards themselves.

Credit cards have a range of features that you will need to understand before using them, including:

  • Credit limit: this is the total amount of money you can borrow on your credit card. Your bank will determine your credit limit based on your income, outgoing expenses, and credit history. However, you can also ask for a particular credit limit within your application.
  • Interest-free period: many cards will allow you to make interest-free purchases by offering an interest-free period. This period may last for up to 55 days. Interest-free days are typically only offered to those who have paid their entire balance.
  • Balance transfer: this involves transferring the balance of one credit card to another credit provider. People generally undergo balance transfers to receive an introductory interest rate discount with the new provider, particularly when struggling to pay off an existing balance.
  • Cash advance: this involves using your card to withdraw cash from an ATM, pay certain bills, make gambling-related purchases, and buy foreign currency. However, cash advances may attract a fee or a higher interest rate.

Some additional features

That’s not all. Here are a few other key features:

  • Rewards program: generally, credit cards with rewards programs enable you to collect rewards when you pay via credit card. Essentially, you’ll earn points through the particular program that the provider is running, which can then be redeemed for travel, gift cards, retail purchases or cashback. However, many rewards cards incur higher annual fees and interest rates.
  • Contactless and mobile payments: Typically, you can tap to make purchases under $100 with your credit card at the checkout without entering a PIN. Many cards also offer contactless payments when added to mobile wallets like Apple Pay, Google Pay, and Samsung Pay.
  • Insurance cover: Overall, most cards offer some kind of complimentary insurance. Specifically, this may include anything from extended warranty cover and purchase protection insurance to transit accident insurance and medical travel insurance. Generally, premium credit cards will provide more comprehensive cover, but also have higher fees.
  • Extra features: Certain cards have extra features that are available for cardholders to use. Some of these may include discounts with retail partners, concierge services, airport lounge access, and admission to exclusive events.

Once you have a firm understanding of the above concepts, you will be well and truly on your way to finding the best credit cards in Australia.

How do credit cards work?

It’s actually rather simple! In short, a credit card functions as a revolving line of unsecured credit.

Here, a ‘revolving line’ refers to the fact that you can use the card on a continuous basis. In addition, ‘unsecured credit’ refers to the fact that the cardholder does not have to nominate an asset as collateral against the borrowed funds.

Furthermore, your credit limit refers to the maximum amount you can spend using your card. Specifically, this limit is allocated by the credit card provider based on your capacity to make regular repayments.

Unlike a debit card that allows you to spend your own funds, you are loaning money from a lender and must repay it at scheduled deadlines. Otherwise, failing to repay the credit you’ve spent on time, the credit provider will begin charging you interest.

Moreover, the interest owed on your card is calculated based on your account’s daily outstanding balance. Then, this interest is charged to the cardholder each month, at the end of the statement period.

What can you do with a credit card?

In short, you can do a plethora of exciting things with a credit card! Specifically, credit cards allow you to borrow money from a financial institution at the point of purchase.

This can be especially useful when you cannot fund the purchase yourself, or don’t want to immediately pay the full cost of an item or service. In fact, if you repay your balance on time, a credit card may resemble an interest-free loan between the date of purchase and date of due payment.

Now, credit cards are used to make payments in stores, over the phone, or even via the internet. So, how exactly does credit card use work in each of these cases?

  • In store: credit cards operate as a kind of pre-approved loan by the credit provider, to be used when you shop at the point of purchase. Just swipe, tap or insert your credit card to fulfil the payment.
  • Over the phone: You will need to verify the details of the card to complete a transaction over the phone. Specifically, you must provide your name, account number and CVC code. Upon your confirmation of this information, the payment should be complete.
  • Online: When making purchases via the internet through online retailers, credit cards provide a convenient method of instant payment. In addition, most e-commerce sites have payment gateways that process credit card purchases immediately.

What kinds of credit card are there?

At first, it can be daunting to choose between credit cards, or even tell the difference between various types. However, if you take a closer look, the differences are often greater than you might think.

Specifically, the main credit cards that financial institutions offer include:

  • Regular cards: these cards generally offer the standard features that cards have. They enable you to borrow a set amount of money to make purchases, which you should eventually repay. Moreover, the bank will typically charge you an annual fee to continue using the card.
  • Gold and platinum cards: these cards generally offer more perks and rewards than regular cards. For example, this could come in the form of higher credit balance limits, better promotions, points programs, and free insurance policies.
  • Black cards: these cards are often presented by banks as being ‘limitless’. However, when it comes to borrowing funds, we know that is never quite the case. Still, black cards typically maintain the highest credit limits on offer and provide their holders with generous rewards. On the other hand, black cards also boast these features in exchange for much higher annual fees.

The pros and cons of premium cards

Looking for a credit card with more to offer? Premium credit cards may just be your answer. This range includes the gold and platinum cards, as well as the infamous black credit cards.

However, there are both benefits and drawbacks to the premium card range. Some of the advantages they offer include:

  • Higher credit limits;
  • Discounted services;
  • Concierge services;
  • Rewards programs with better customer returns; and
  • Complimentary travel insurance, purchase protection, and extended warranty policies.

In contrast, some of the disadvantages of the premium credit cards include:

  • Much higher fees;
  • More exclusive eligibility criteria; and
  • The potential to spend more money, and therefore owe more.

What is the best credit card in Australia?

Unfortunately, Monzi cannot say exactly what the best credit card is.

After all, that depends on a range of unpredictable factors, including the different ways that the ‘best’ credit card could be defined.

For example, one consumer might consider the card with the lowest interest rates to be the best credit card. In contrast, another consumer might think of the best credit card as one with the greatest rewards program and most benefits.

As a result, the concept of the best credit card is subjective and depends entirely on you: the reader.

Thus, although Monzi may not be able to give you a straight answer, we can prepare you to make your own decision by offering a range of important financial information.

How do I find the best credit card?

First of all, understanding your own financial situation is crucial to finding the best credit card for you. In other words, you should consider how you will use your card when comparing the various options available.

Therefore, here are some important factors to consider before deciding on the best credit card for you:

  • How much you can afford to repay monthly: basically, will you be able to pay the full balance required each month? What if you can’t pay the full amount each month? If these questions are bothering you, consider a card with more interest-free days. Essentially, this means that you won’t pay interest as long as you repay the balance within a set time frame. However, these cards may attract higher interest rates and annual fees.
  • A credit limit you can afford: essentially, when applying for a credit card, your credit card company will offer you a certain credit limit. Typically, this is the maximum amount they will lend you, as based on your proven capacity to repay it within three years. However, if overspending is an issue for you, you don’t have to agree to the full balance offered.
  • The pros and cons of each card: put simply, different credit cards offer different features. For example, you should consider the additional expenses of store cards, the perks of cards with rewards programs, and the safety of cards offering ‘complimentary’ extras like travel insurance.

Credit card comparison

First of all, it is essential to compare different cards to find one that suits your personal needs.

However, although comparison websites can be useful in providing guidance, they are still businesses at the end of the day. Therefore, they are often funded through promoted links to credit providers that they may not necessarily endorse.

As a result, comparison sites may not cover all your options. But fear not– Monzi is here to help! So, without further ado, here are Monzi’s top tips for what to consider when comparing cards:

  • Introductory interest rates: often called ‘honeymoon’ rates, these are the interest rates offered for a limited time when you start a new credit card account.
  • Purchase interest rates: these are the interest rates that you pay on purchases after the introductory period has ended.
  • Interest-free days: these are the number of days within which you won’t be charged interest on purchases made through your credit card.
  • Annual and monthly fees: these are the fees you will pay for your credit card every year or month.
  • Rewards programs fees: these are the fees you will pay for using the rewards program associated with your credit card.
  • Additional fees: these are the fees that you may not think about and might give you a nasty surprise if not considered (e.g. international purchases).

Best card card being used for purchase

What is the best credit card for points?

Do you want a credit card that gives back? Well, we don’t blame you.

So, let’s explore the best credit card for gaining rewards and redeeming points.

According to a recent financial study, the cards with five-star ratings for rewards are as follows:

  • American Express
  • ANZ
  • Bankwest
  • Coles
  • Commonwealth Bank
  • HSBC
  • Jetstar
  • Latitude Financial Services
  • Summerland Credit Union

However, it is also vital to mention that the value of your credit card rewards differs depending on your annual spend.

For example, a cardholder who has spent $12,000 in a year on their card will accrue a different quantity and quality of rewards to a cardholder who has spent $24,000 on that same type of card.

As a result, remember to consider your own spending habits when deciding on the best credit card for rewards and benefits.

What is the best option for low interest rates?

On the hunt for the card with the lowest interest rate? That’s understandable. After all, a low rate will reduce that you must repay on your outstanding balance.

Unfortunately, though, Monzi is unable to say what the best option may be. We do not offer credit cards, nor are we affiliated with any organisation that does. Instead, we’re a lender-finder service who may match you with credit providers offer quick cash in your account up to $10,000.

Given this, you must do your research to find the card with the lowest rates. As a guide, you may use a comparison site to do this. Alternatively, you could use a few of the tips that we’ve outlined in this article. In short, it’s up to you.

What about low fees?

Looking for a credit card with the lowest fees? We totally get it. After all, it’s hard enough to balance everyday life, let alone a hefty annual credit fee.

To find the lowest rate, you’ll need to compare options. Read the terms and conditions online for a variety of card and then compare the costs. That way, you may be able to discover the best low-fee option. In short, this is no different from trying to find the best personal loan rates.

Having said this, remember that fees are just one piece of the puzzle. Make sure you take the interest rate into account too. Moreover, you may also want to check out the rewards options on offer too.

What is the best credit card for balance transfer?

Sadly, there is no direct answer to this question. However, Monzi can tell you how to make the balance transfer process as easy and breezy as possible.

So, here are some steps you should check off when completing a balance transfer from one card to another:

  • Pay off the balance in time.
  • Limit spending on your new card.
  • Cancel your old card.
  • Protect your credit score.
  • Check how much you can transfer.

How do I find the best credit card for balance transfer?

The short answer? Compare, compare, and compare some more.

However, on what basis should you compare credit cards for balance transfer?

Here’s a list of things to consider when searching for the best credit card for transferring an existing balance:

  • Balance transfer rate: what is the interest rate on the balance you are transferring? When does it start? How long will the transfer period last?
  • Balance transfer amount: How much can you transfer?
  • Purchase rate: how much interest is charged on purchases? Does it change after the transfer period?
  • Interest-free days: what is the number of days that you won’t be charged interest on purchases? When does this period start? Immediately, or after you’ve repaid the transferred balance?
  • Rewards programs: what kind of rewards programs are included? What are the associated fees like?
  • Annual fees: how much will you pay every year? When do you start?
  • Other fees: will you be charged for balance transferral? Late repayments? Cash advances? Exceeding your credit limit? International purchases?

What should I use my credit card for?

We’re glad you asked! After all, there are countless things you could spend your credit on. As a result, it is all too easy to rack up debt with a credit card.

So, here is a list of a few smart ways to use your card:

  • Choose a credit card that suits your spending habits and the way you intend to repay it.
  • Monitor your spending, and only spend what you can afford to repay.
  • Pay your credit card bill on time every month, whether that means in full or as much as you can afford.
  • Keep an eye out for low interest rates, low fees, and features you’ll use. Ensure that any rewards or extra bonuses are actually worth it.
  • If you’re falling behind and struggling with debt, avoid using your credit card as a lifeboat. Seek professional financial advice to keep your debt under control.

Check out the Australian government’s MoneySmart website for more helpful tips and tricks on credit cards and how to use them responsibly.

What is the top card for rewards?

In short, there is a range of different credit cards that offer regular promotions and rewards. As a result, Monzi cannot say which card may be the best.

In most cases, the frequency and scale of the rewards available will depend on the annual spend of the cardholder. In other words, there may be different rewards available to consumers who spend $10,000 as opposed to consumers who spend $20,000. However, this is just an example.

Ultimately, if you’re looking for the best card for rewards, then you must do your own research. Consider your spending habits as well as the terms offered to determine what may be right for you.

What kind of rewards do the best credit cards offer?

While many credit cards offer different rewards, there are three main types of regular promotions that credit cards typically offer.

These common promotions include:

  • Interest-free promotions: these may benefit credit cardholders who are unable to repay their balance completely. In this case, you would not be charged interest for an initial period of time that usually ranges between six and twelve months. Ensure that you double-check the standard interest rate on your credit card before opening the account.
  • Balance transfer promotions: these allow cardholders to transfer a pre-existing balance to a new credit card, and pay it off at a lower interest rate. Some credit card issuers even offer no interest for an introductory period to attract customers. However, it is important to take note of when the introductory period is over and the promotion expires. Otherwise, you may get a nasty surprise when the card reverts to its standard interest rate.
  • Bonus points promotions: these may benefit cardholders who have frequent flyer accounts or commit to earning rewards points. In short, you simply have to be approved for a card and make purchases on it to accrue bonus rewards points.

Still, the above list is not a comprehensive one, by any means. There may well be a range of other regular rewards that you can take advantage of through particular credit card accounts.

Is it bad to cancel a card?

You may have heard that cancelling a credit card can be bad news for your credit score. But why?

The potential for a drop in credit score comes from the impact that closing a credit card has on your credit utilisation ratio. The ratio calculates how much of your total accessible credit you are using. The more you use of your available credit, the poorer this will reflect on your credit score.

For example, let’s say you have two cards. One of the credit cards is maxed-out and the other is unused. Therefore, according to your financial reports, you are currently only using a portion of the total credit available to you.

However, you decide to cancel the unused credit card. Now, instead of using a mere portion of the credit available to you, the maxed-out credit card implies that you have used 100% of the credit that was available to you. As a result, your credit score would be likely to decrease.

Still, while it is true that closing a credit card can sometimes damage your credit score, this isn’t always the case. In fact, a credit card can usually be cancelled without affecting your credit score, but paying it off beforehand is crucial.

Although people generally advise cardholders not to cancel their cards, it is often necessary within certain circumstances.

When should I cancel a credit card?

So, what are some good reasons to cancel a credit card? Here are some situations when it may be best for you to cancel a credit card:

  • Separation or divorce: During a divorce or separation, it is usually responsible to close any joint credit card accounts. If you’re a joint cardholder, you will be liable for any previous or future charges made on that card.
  • High annual fees: If your card issuer charges particularly high annual fees on a card you don’t use, cancellation may be a viable option. However, if you receive any benefits or rewards from the account that justify the annual fee, consider whether it is worth the cost.
  • Increased temptation: Some cardholders find the temptation of spending money via credit card too great to resist. If this sounds like you, it may be reasonable for you to close your credit card account. However, there are also a number of other ways to curb overspending habits without potentially risking your credit score.

However, please note that the above list is by no means exhaustive. There may be a variety of other reasons why you should cancel a credit card, so Monzi suggests that you conduct your own research if you are unsatisfied with the reasons provided.

How do I cancel a card?

First of all, it is important to approach your credit card cancellation with caution, as it is all too easy for things to go wrong. Therefore, here’s a quick list of how to go about it:

  1. Before you cancel the card, redeem any unused rewards you may have through your account.
  2. Try to completely pay off the account before cancelling it, or at least attempt to minimise the balance as much as you can.
  3. Contact your credit card issuer to cancel and confirm that the account’s balance is empty.
  4. Cancel the account by sending an official letter to your card issuer, asking for a letter confirming the account’s null balance in return.
  5. Check your credit reports at around 30 to 45 days after cancelling. This will ensure that your bank has reported the account as being closed and paid off.
  6. If you discover any incorrect information within your reports, dispute these with the relevant credit bureau.

About Monzi

So, now that we’ve covered the best credit card in Australia and how to find the right one for you, what is Monzi exactly?

Though we don’t like to beat our own drum too often, Monzi is an efficient lender-finder service that pairs Aussies like you with our reliable network of lenders.

As a result, you may be able to access the loans you need, right when you need them most.

Apply now!

Apply with Monzi today, and you may receive an outcome within a matter of minutes!

Just scroll up to the loan slider at the top of this page, and fill in the required information. Apply for cash loans from $300 to $10,000.

Not ready to apply just yet? No worries. Follow Monzi on Facebook, Instagram, Twitter and Pinterest to stay updated on everything finance.

Factor In

Costs

Two credit cards
Two credit cards

You won't use a penny to apply for our lender-finding service, but here's some costs you could expect from a lender

Loan amount

$300 - $2,000

Terms

12 months

Costs

20% upfront establishment fee

+ 4% monthly fee

Example

Loan Amount of $1,000 over 6 months repayable weekly (25 weekly repayments). $1,000 (Principal Amount) + $200 (20% Establishment Fee) + $240 (fees based on 4% per month over 25 weeks) = $1,440 total repayable in 25 weekly installments of $57.60.

Under the current legislation, most small personal loan providers don’t charge an annual interest rate (you’ll know this as an APR) %. The maximum you will be charged is a flat 20% Establishment Fee and a flat 4% Monthly Fee. The maximum comparison rate on loans between $300 and $2000 is 199.43%. This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate

Loan amount

$2,001 - $4,600

Terms

13 months

24 months

Costs

48% annual percantage rate

67.41% comparison rate p.a.

Example

Loan Amount of $3,000 over 18 months repayable weekly (78 weekly repayments). $3,000 (Principle Amount) + $400 (Establishment Fee) + $1,379.06 (reducing interest) = $4,779.06 total repayable over 18 months with weekly installments of $61.27.

The Interest Rate for Secured Medium Loans is 48%. The Typical Comparison Rate is 67.41% p.a. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Click here to see a worked example.

Loan amount

$5,000 - $10,000

Terms

13 months

24 months

Costs

21.24% annual percantage rate

48% comparison rate p.a.

Example

Loan Amount of $10,000 over 24 months repayable weekly (104 weekly repayments). $10,000 (Principle Amount) + $5,577.12 (Interest) = $15,577.12 total repayable over 24 months with weekly installments of $149.78.

The Interest Rate for Secured Large Amount Loans is 48%. Maximum Comparison Rate is 48% p.a. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Click here to see a worked example.