Forum: Advice / Girls & Guys

Which credit card should I apply for in Australia?
By lux
On Mon Jan 23, 2012 08:02 PM

The title says it all. I would only be applying for a low limit (around $2000).

I'm also completely ignorant as to how credit cards work. Say I have spent $1000 on my card. Do I have a deadline by which I have to pay that money off, or could I hypothetically just keep paying off the interest indefintely?

I've completely avoided credit cards up to this point, and I'm only looking at getting one now because I have to take an unpaid two-week break from work to complete a study-related work placement. Unfortunately I don't have enough savings to live off of without draining them completely, so this is the best option I can think of.

Thanks in advance for your help!

8 Replies to Which credit card should I apply for in Australia?

re: Which credit card should I apply for in Australia?
By mandakp
On Tue Jan 24, 2012 11:16 AM
I'm in the same boat as you, going to apply for one, but don't know too much about them, so this is not so much advice, more what I plan to do.

My mum has told me to get a card through Heritage Building Society, seeing as they don't have all the fees that a bank has. She said that if I got a credit card from there, I wouldn't be charged just to have the card, I'd only get charged interest when I actually used it, whereas if you get a credit card from a bank, you get charged just to have it.

Other people probably know more than me though, so correct me if I"m wrong!
re: Which credit card should I apply for in Australia?
By LizDancermember has saluted, click to view salute photos
On Tue Jan 24, 2012 12:07 PM
I don't actually have a credit card and I'm by no means an expert, but I just wanted to address your question about hypothetically just paying the interest every month. When you get your statement each month, there will be a minimum payment you can make instead of paying your balance back in full. This minimum payment could be mostly interest (I think? Someone correct me on this if I'm wrong). Anyway, the point is that you can just keep paying the minimum payment every month, but it's a bad idea! That's how you end up with mountains and mountains of credit card debt. I don't pretend to be incredibly financially savvy, but the one thing my parents pounded into my brain growing up was to never EVER just pay the minimum credit card payment month after month.
re: Which credit card should I apply for in Australia?
By Puss_in_Bootsmember has saluted, click to view salute photosPremium member
On Tue Jan 24, 2012 12:12 PM
^ I think Heritage is only Queensland though. Still, it's probably worth looking at the smaller building societies and credit unions as well as the big banks.

Mine's from Heritage - honestly, I just decided to go with them because I already had two accounts with them - and it's more back-up in case something goes wrong while I'm overseas and I don't have enough money. I got it while some kind of promotion was going on so I had absolutely no fees for the first year, and now I think I pay a little bit of money every six months or something. I've only used it once or twice for like $5 purchases, though - my Visa debit is my go-to card if I don't have enough in my Finnish bank account.

I have an idea that there is some kind of due date, but I could be wrong - that's just from glancing at Mum and Dad's bank statements a couple of times.
re: Which credit card should I apply for in Australia?
By LizDancermember has saluted, click to view salute photos
On Tue Jan 24, 2012 01:34 PM
Edited by LizDancer (148929) on 2012-01-24 13:35:59 posted twice
Oops! Posted twice somehow.
re: Which credit card should I apply for in Australia?
By Moonlitefairy06member has saluted, click to view salute photos
On Tue Jan 24, 2012 09:33 PM
I'm in the U.S. but I do know Visa is a very popular and respected card around the world. And they do sponsor Austrialian Gymnast Lauren Mitchell :) . . .

But anyway about debt. Say you charge $1000 onto your card, and your minimum payment is $100, you can just pay the $100 each month. But you have to look at the interest rate. If you just pay the $100 and don't pay the $1000 the interest rate will cause the debt to keep accumulating and soon you will owe a lot more than $1000.

How long will it be before you are in need of the card? Sometimes here in the US, credit card applications and approvals to go through. It might be different in Australia though. Do you have a back up plan if you aren't approved (or approved in time?)
re: Which credit card should I apply for in Australia?
By CaffeinePremium member
On Wed Jan 25, 2012 04:22 AM
Visa and Mastercard are pretty much accepted world wide. While I know some building societies and banks outside of the "Big-4" do lower fees and additional perks, I've only ever got a credit card through my bank. For me, that was easiest.

Look for one that suits your needs: eg:If you don't travel, don't get one tied in with a frequent-flier bonus, as the fees and interest rates are sky high compared to other cards. Some banks have tools which help you determine the best card - from their suite - for you. eg: . . . . . .

As for paying them off, there is a minimum monthly payment you need to make (IIRC it's about 10% of the balance owing), but like any loan it's much, much better to pay off sooner rather than later, as with interest you'll end up owing/paying back more than you borrowed.

Oh, and DON'T get sucked in by their "you've been such a good customer, let's increase your limit" letters they send out if you spend close to your limit. Bad bad bad move. (At one point my bank was offering me 10k... when I was struggling to pay off 3k. What part of that equation doesn't add up?)
re: Which credit card should I apply for in Australia?
By ballet_snoopy
On Wed Jan 25, 2012 04:32 AM
A good idea is to also look out for deals that new credit card applications come with for example if you're worried about interest, look for the banks that are having deals at the moment offering a certain amount of time interest free after your initial application. I've actually just signed up for a new Visa credit card myself with ANZ. They have a deal on the particular card I got until March and I had the choice of 6 months interest free or if I signed up to the rewards program (which costs extra money on top of your annual card fee, just to warn you) I could get 10,000 bonus points for signing up. Because I always pay off my card balance in full before I have to pay interest, I opted for the bonus rewards. Some cards have better interest rates than others, or a longer interest free period, so it's worth doing your homework on all the cards you can find before you apply.

Also remember that cash advances often attract a higher interest rate than purchases and often aren't included in the interest free period on your card. For this reason, you're always best off sticking to making purchases with your credit card rather than using it to transfer "cash" into other accounts (for example to pay off another credit card or top up a savings or debit account - this is classed as a cash advance), or to take cash out, say from an ATM using your credit card.

Take into account the annual card fee cost, which is usually paid in your first statement period of your card - it's a good idea to budget your annual fee into your spending for your first month.

Also it's wise to stay away from rewards programs unless you are spending $10,000+ per year on the card because the fee you pay to be in the program often outweighs the benefits you get back. With my card, $10,000 worth of spending is equal to $100-150 worth of rewards and it costs $55 a year to be in the rewards program on top of the $34 annual fee. Cards that don't have rewards sometimes have a slightly higher annual fee cost too, so again, make sure you do your research!

The application process shouldn't take too long. I was approved on the spot just by providing a few details including earnings, spendings and other debts and had my card within 5 business days (it's worked the same way for all of the other credit cards I've applied for in the past). I was also able to choose my limit, though some banks will try to give you the highest limit possible which can be very bad if you know you're going to spend more than you can pay off. Decide on your limit before you apply and don't let the banks talk to into getting a higher limit than you need.
re: Which credit card should I apply for in Australia?
By Dancing_B
On Mon Jan 30, 2012 09:14 AM
You said you had study related work? Student credit cards are available from some banks (I have one from the Commonwealth Bank) and they charge no fees and have an interest free period of couple of months. The limits are normally lower, but if it's all you need, it can be a safer option. It depends on your income and assets as to what limit they offer you.


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