Credit card pros & cons

It’s no secret that credit cards have a notorious reputation for being the fastest way to plunge into debt. No doubt you’ve heard plenty of credit card horror stories. You might even have a friend who’s on a debt payment plan to get back on track. But don’t let these things put you off, because if you play by the rules, credit cards can really help you out when you get stuck. Some cards also have perks like free insurances and rewards.

So in this guide we’ll take you through the pros and cons of owning a credit card. And when you’re done reading, we hope you’ll be better placed to decide if this little piece of plastic is worth your while.

Are you ready to choose a credit card? Compare & save - last updated 15 October 2021

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  • Apply By 31 Oct 2021
    Bendigo Bank Low Rate Credit Card

    0% p.a. on purchases for up to 12 months (Reverts to 11.99% p.a). Also 0% balance transfer for up to 12 months. Low annual fee of $45 and no fees for additional cardholders.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    0% p.a. for 12 months then 11.99% p.a.
    0% p.a. for 12 months and then 11.99% p.a. (2.00% balance transfer fee)
    $45
    -
    Details
  • Bankwest Breeze Mastercard

    Enjoy 0% p.a on balance transfers for 15 months then 9.90% thereafter. No annual fee for the first year. Limited time only. Other fees, T&Cs apply. New Breeze Mastercard customers only.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    0% p.a. for 15 months then 9.90% p.a.
    0% p.a. for 15 months and then 9.90% p.a.
    $49 $0 in the first year
    -
    Details
  • Great Southern Bank Low Rate Credit Card

    0% balance transfer rate for 25 months and up to 55 interest free days. No annual fee for the first year and $49 after. Mozo Experts Choice Balance Transfer Platinum Credit Card Winner 2020^

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    11.99% p.a.
    0% p.a. for 25 months and then 21.74% p.a.
    $49 $0 in the first year
    -
    Details
  • MoneyMe Freestyle Virtual Mastercard

    Use your virtual card instantly once approved (typically within 60 minutes). Features include Tap n Pay with up to 55 days interest-free, transfer money to any bank account and exclusive access to MoneyMe perks. $0 annual fee for lower limits. Must be employed with decent credit history.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    16.99% p.a.
    No current offer
    $209 $0 - $149 based on credit limit, $5/month for balances over $20.
    -
    Details
  • Apply By 10 Oct 2021
    humm90 Mastercard

    With up to 110 days interest free on your spending, this card is pretty unique in the market, and great for managing your daily spend. Plus, no foreign transaction fees overseas or online.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    23.99% p.a.
    No current offer
    $99
    -
    Details
  • Westpac Low Rate - Cashback Offer

    Enjoy a super low rate of 13.74% with 55 days interest free plus $400 Cashback with $4k+ spend on eligible purchases within 4 months of card approval. No annual card fee for the first year, $59 thereafter. New Cards only. Offer ends November 30th 2021. T&C's and exclusions apply.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    13.74% p.a.
    No current offer
    $59 $0 in the first year
    -
    Details
  • Great Southern Bank Platinum Credit Card

    0% p.a. balance transfer for 25 months, $0 annual fee for the first year and also receive 1 rewards point for every dollar spent. Purchase protection insurance. Mozo Experts Choice Balance Transfer Platinum Credit Card Winner 2020^.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    19.99% p.a.
    0% p.a. for 25 months and then 21.74% p.a.
    $149 $0 in the first year
    Great Southen Bank Platinum Rewards
    Details
  • Latitude Gem Visa

    Enjoy now. Pay later with Latitude. 0% interest for 6 months (purchases over $250). 0% interest payment plans at selected retailers. Up to 55 interest free days. Apply in less than 10 minutes. Must be over 18 to apply.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    19.95% p.a.
    No current offer
    $107 $8.95 monthly fee waived if outstanding balance less than $10
    -
    Details
  • Apply By 30 Nov 2021
    St.George Vertigo - Cashback Offer

    $300 cashback when you take out a new Vertigo Credit Card and spend $4k on eligible purchases within 120 days of the new card approval. No annual fee for the first year, $55 thereafter. New cards only, Eligibility criteria and T&Cs apply. Offer ends November 30th 2021.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    13.99% p.a.
    2.99% p.a. for 15 months and then 21.49% p.a.
    $55 $0 in the first year
    -
    Details
  • NAB Low Rate Card

    0% p.a. interest on balance transfers for the first 32 months, plus a low ongoing purchase rate after that means you can spend with confidence. There's also up to 55 interest free days on purchases to help you manage your budget better.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    12.99% p.a.
    0% p.a. for 32 months and then 21.74% p.a. (0% balance transfer fee)
    $59 $0 in the first year
    -
    Details
  • American Express Low Rate Credit Card

    Competitive low rate with $0 Annual Fee. Get $100 back when you apply online by 27 October 2021, are approved and spend $1,000 on your new Card by 31 December 2021. T&Cs apply. New Card Members only. Customers need an annual income of $50,000 or more.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    8.99% p.a.
    No current offer
    $0
    -
    Details
  • NAB StraightUp Card

    Pay no interest and no late payment fees, just a $10 monthly fee for a $1,000 credit limit. Plus, if you don't make any purchases and have an outstanding balance of $0 during the whole statement period, the monthly fee will be reversed. Also pay no foreign currency fees when you shop online or overseas. Mozo Experts Choice Credit Card Innovation Winner 2020^.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    0% p.a.
    No current offer
    $120 $10/month - waived if no spend & no balance owing
    -
    Details
  • Apply By 19 Oct 2021
    American Express Platinum Edge Credit Card

    Receive 50,000 Bonus Membership Rewards when you apply online by 19 October 2021, are approved and spend $1,500 on your new Card within the first 3 months. T&Cs apply. New Card Members only. $0 introductory annual Card fee for the first year..

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    20.74% p.a.
    No current offer
    $195 $0 in the first year
    Membership Rewards
    Details
  • HSBC Platinum Credit Card

    0%p.a. on balance transfers for 36 months with no balance transfer fee. Terms and Conditions apply. Mozo Experts Choice Premium Rewards and Balance Transfer Platinum Credit Card Winner 2020.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    19.99% p.a.
    0% p.a. for 36 months and then 21.99% p.a.
    $129 $29 in the first year
    Rewards Plus
    Details
  • Apply By 26 Oct 2021
    American Express Explorer® Credit Card

    Receive 150,000 Bonus Membership Rewards Points when you apply online by 26 October 2021, are approved and spend $3,000 on your new Card within the first 3 months. T&Cs apply. New Card Members only.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    20.74% p.a.
    No current offer
    $395
    Membership Rewards
    Details
  • St.George No Annual Fee

    0% p.a. for 12 months on APR requested at card application. The special promotional purchase rate applies from card approval, after the promotional period, the rate will switch to the variable purchase rate. New cards only, Eligibility criteria and T&Cs apply. Offer ends November 30th 2021.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    0% p.a. for 12 months then 20.74% p.a.
    2.99% p.a. for 15 months and then 21.49% p.a.
    $0
    -
    Details
  • Bankwest Zero Mastercard

    No annual fee and up to 55 days interest free on purchases. 0% p.a. on balance transfers for 26 months and then 14.99% p.a. thereafter (2% BT fee applies).

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    14.99% p.a.
    0% p.a. for 26 months and then 14.99% p.a. (2.00% balance transfer fee)
    $0
    -
    Details
  • American Express Qantas Ultimate Card

    Receive 110,000 bonus Qantas Points plus $200 back when you apply online by 27 October 2021, are approved and spend $3,000 on your new Card within the first 3 months. Offer available to new Card Members only. Plus, receive up to 40,000 extra Qantas points with Shop Small (T&Cs apply)

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    20.74% p.a.
    No current offer
    $450
    Qantas Frequent Flyer
    Details
  • Apply By 30 Nov 2021
    St.George Vertigo

    0% p.a. for 30 months on balance transfers requested at card application. 0% balance transfer fee applies. Rate then switches to applicable variable cash advance rate. No annual fee for the first year, $55 thereafter. New cards only, Eligibility criteria and T&Cs apply. Offer ends November 30th 2021.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    13.99% p.a.
    0% p.a. for 30 months and then 21.49% p.a.
    $55 $0 in the first year
    -
    Details
  • Westpac Low Rate

    Enjoy a super low rate of 13.74% with 55 days interest free plus 0% balance transfer for up to 28 months at 1% BT fee. No annual card fee for the first year, $59 thereafter. New Cards only. Offer ends November 30th 2021. T&C's and exclusions apply.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    13.74% p.a.
    0% p.a. for 28 months and then 21.49% p.a. (1.00% balance transfer fee)
    $59 $0 in the first year
    -
    Details
  • American Express Cashback Credit Card

    Get 5% Bonus Cashback in the first 3 months and no monthly fee for the first 12 months. Additional 1.5% cashback with American Express Shop Small Campaign (conditions apply). Complimentary perks and insurances. Eligibility criteria and T&Cs apply.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    20.74% p.a.
    No current offer
    $120 $0 in the first year
    Cashback Rewards
    Details
  • Apply By 30 Nov 2021
    Bank of Melbourne Vertigo - Cashback Offer

    $300 cashback when you take out a new Vertigo Credit Card and spend $4k on eligible purchases within 120 days of the new card approval. No annual fee for the first year, $55 thereafter. New cards only, Eligibility criteria and T&Cs apply. Offer ends November 30th 2021.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    13.99% p.a.
    2.99% p.a. for 15 months and then 21.49% p.a.
    $55 $0 in the first year
    -
    Details
  • Apply By 30 Nov 2021
    Westpac Altitude Platinum

    Earn up to 60,000 bonus Qantas Points ($3k min. spend in the first 90 days on eligible purchases). 0% p.a. for 18 months on balance transfers requested at card application. 1% BT fee applies. $99 + $50 Annual Qantas Rewards card fee for the first year. New cards only. Offer ends November 30th 2021. T&C's and exclusions apply.

    Purchase rate
    Balance transfer rate
    Annual fee
    Rewards program
    20.49% p.a.
    0% p.a. for 18 months and then 21.49% p.a. (1.00% balance transfer fee)
    $200 $149 in the first year
    Qantas Frequent Flyer
    Details

The pros:

1. If you play your cards right, you’ll be rewarded

Banks are always trying to tempt potential customers like you with rewards and incentives like complimentary travel insurance and concierge. This is good news for you, if you build up a good credit rating (see point four) and stick to the rules of paying your balance on time and in full each month. Make it on your terms, and you could be in for some big rewards. If you’re curious to see what rewards credit cards are available at the moment, visit out rewards cards comparison hub here.

2. It’s safer than carrying around cash

How strange would it feel carrying around wads of cash every time you went shopping? One of the perks of having a credit card is that it’s a safer way to shop because credit cards connected to the Visa, MasterCard and AMEX networks offer zero liability policies. This means if your credit card is lost or stolen, you will be reimbursed for any fraudulent activity. Just keep in mind, you’ll generally be required to notify your provider within a reasonable period of time. If you want to learn more about credit card fraud, find out more here.

3. Having a credit card keeps your options open

For online big ticket or spontaneous purchases, having a credit card can make life easier when you don’t have the funds at hand but do have the means to pay it back later. Credit cards are also there to help in the event of an emergency like if you receive an unexpected bill or fine. Having this trusty piece of plastic in your pocket can guarantee you that extra sense of security when you need it the most.

4. You get to build up a credit history, which helps when applying for bigger loans

A clean credit rating is going to add that little bit extra assurance to the banks when you apply for a hefty loan like a home loan. Think of it like a good school report which reflects well on your character and trustworthiness. But of course, you’ll also face the risk of damaging your credit report, which we’ll run through in the cons below.

5. It does the record keeping

Have you ever paid cash for an item that turned out to be faulty, only to realise you lost the receipt? The handy thing about using plastic is the convenience of keeping a record of what you buy to use it as evidence if needed, and also as a budgeting tool so you know where your money is going each month and on what.

But wait for it...here are the cons:

1.Credit cards can cost you money

While credit cards give you the freedom to buy things now rather than later, the banks are going to come out on top if you don’t use your card the right way. That’s because if you don’t pay your balance in full and on time each month you’ll be slapped with having to pay interest on whatever you spend, as well as a late payment fee. To top things off, many credit cards come with an annual fee. 

People shop and spend differently, so there are credit cards to facilitate that. Take the black credit card for example, a card for the serious punters. While the plentiful promotions from owning one is enticing, the yearly fee will usually set you back around $400. 

On the other end of the scale, there’s the no fee credit card. This type of card has no annual fees, but you need to watch out for the high interest rates and pay your bills on time. If you want to learn more about the various credit cards available including the benefits and disadvantages of each type, read up on it here. And remember, it’s really important to do your research when choosing any credit card, so ensure you read the fine print, so you’re aware of any hidden fees.

2. And having one might just change the way you think about money

Just because your credit card can buy it, it doesn’t mean you should buy it. A study at Cornell University found that people are more likely to buy junk food with plastic than cash, because they cannot part with cash when spending it on vices. If having a credit card around is too dangerous for you, maybe switch it to a different wallet or purse for occasional spending only. That way you’ll be disassociating it from your regular spending habits. 

Another option is going for a debit card over a credit card, which allows you to spend your own money not the banks, and also generally comes with the protection of MasterCard or Visa’s zero liability policy.

3. It can hurt your credit rating

The Australian Retail Credit Association (ARCA) has developed a website called CreditSmart to keep credit card holders informed about their legal rights and obligations concerning credit. According to CreditSmart, any “default information and any record of payment of the default will stay on your credit history for five years.” Repayments will also stay on your credit history for two years. 

This is something to keep in mind when looking at the crystal ball of your future in terms of housing and leasing applications. After all, you don’t want the debt collectors knocking at your door.

Now it’s time to choose your credit card destiny…

You have read all the pros and cons to help you decide whether you want a credit card, so that means you can go ahead and get one, right? Wrong! The next step is to choose precisely which credit card is suitable for you. Different credit cards have different features, and some might not be relevant or appropriate for your spending style. 

So check out this neat article on the types of credit cards there are around. And the best thing is, there are always new credit cards entering the market too. We have an extensive credit card comparison section on our website that crunches all the numbers down into plain English.

Our final piece of credit card wisdom...

If you need more information about what a credit card application process is like, have a read of our lowdown here, and follow these helpful hints for using a credit card the right way.

  • Once you have the plastic in your pocket, create a spending budget so you only spend what you know you can repay in full.
  • Keep track of your credit card repayments by penning important payment dates coming up in your diary. Or better still, set up automatic repayments to avoid late payment fees.
  • Avoid ATM cash withdrawals using your credit card because instead of being charged the purchase rate, you’ll be slapped with the notoriously high cash advance rate which is charged straight away as interest free days don’t apply to cash withdrawals.
  • Set up online statements for convenience, the planet, and cost efficiency. Some banks charge a few dollars a year for paper statements, so you may as well save where you can.

^See information about the Mozo Experts Choice Credit Card Awards

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