Types of Credit Cards

By Mozo ·

Gone are the days when banks had one or two different types of credit cards you could choose from! Now there are plenty of types of credit cards on offer in a very competitive market, all come in different shapes and sizes and with unique benefits. Work out what type of credit card user you are and then you can pick one that suits you and your needs.

Ready to choose your credit card? Compare & save - page last updated September 22, 2020

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  • Thumbnail icon for CUA
    mozo-experts-choice-2020
    CUA Low Rate Credit Card

    11.99% p.a.

    0% p.a. for 13 months and then 21.74% p.a.

    $49 $0 in the first year

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  • Thumbnail icon for St.George
    St.George Vertigo

    0% p.a. for 7 months then 13.99% p.a.

    0% p.a. for 22 months and then 21.49% p.a. (1.50% balance transfer fee)

    $55 $0 in the first year

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  • Thumbnail icon for Bankwest
    mozo-experts-choice-2019
    Bankwest Zero Platinum Mastercard

    17.99% p.a.

    2.99% p.a. for 9 months and then 17.99% p.a.

    $0

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  • Hot Deal$200 Cashback Offer (T&Cs apply)

    Thumbnail icon for Westpac
    Westpac Low Rate

    13.74% p.a.

    0% p.a. for 20 months and then 21.49% p.a. (1.00% balance transfer fee)

    $59

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Low interest credit card

If you can be a little forgetful and aren’t likely to pay off your credit card bill in full each month then a low interest credit card could be right for you. If you fall into this category, look around and find the lowest rate you can get your hands on! Low interest cards or low rate cards generally have an interest rate of 14% p.a or less.

Pros

  • Most low interest cards will have up to 55 interest free days
  • Some low rate card offer complimentary insurance and concierge service
  • Useful when you need to make a large one off purchase as you can pay it back over a year at a low rate

Cons

  • You will be hit with an annual fee of around $60. Read our guide on avoiding credit card fees.
  • Low rate cards aren’t ideal if you travel overseas regularly as you’ll be hit with a hefty foreign exchange fee, a travel credit card is a better option
  • There aren’t many rewards attached to a low rate credit card

Balance transfer credit cards

If you’re credit card debt is a little out of control and you’re being charged at a high interest rate then it may be a good idea to move over to a balance transfer credit card. The process isn’t too complicated, you move your existing credit card debt across to a new balance transfer credit card and pay low or no interest at all your transferred debt for a period of 3-24 months. When you do you balance transfer comparison look for a low annual fee and low revert rate.

Pros

  • Enjoy a lower interest rate and become debt free faster
  • Many balance transfer cards have a low annual fee under $50

Cons

  • Continually moving your debt from one credit card to another can have a negative impact on your credit rating
  • Some banks will charge a balance transfer handling fee of around 1%-3% of the transfer amount

No annual fee credit card

Wow, who would have thought, a credit card free of fees! A no fee credit card refers to a card that doesn’t have an annual fee. If you’re only going to use your card a few times a year and pay your balance off in full each month, a no annual fee card is well suited to you. Plug some figures into credit card debt repayments calculator to find out how long it will take you to pay off your card.

Pros

  • Save money by avoiding an annual fee each year
  • A no fee credit card still allows you to earn rewards

Cons

  • Interest rates are usually pretty high compared to say a low rate card
  • If you accumulate interest you’ll end up paying more on a no fee credit card then a low rate credit card with an annual fee

Rewards credit card

Who doesn’t like being rewarded for spending money?! A rewards credit card allows you to accumulate points every time you flip out the plastic to make a purchase. These points can then be cashed in for things like, petrol, shopping vouchers, cash, electronics, frequent flyer miles to name a few. If you’re someone who will spend around $10,000 or so a year on your credit card and will pay your card statement in full each month, a rewards card will sit well in your wallet.

Pros

  • The more money you spend the more rewards you’ll receive
  • Receive benefits and perks for the things you’re interested in

Cons

  • Reward points can expire and take a while to build up
  • Annual fees are usually pretty high

Cash back credit card

Make purchases on your credit card and you’ll receive cash back for your spending. Sounds like a pretty good deal! Cash back rewards cards are a great way to get extra value for your spending habits. Depending on your provider, some will issue a cash voucher while others will credit an amount back to your account. How much cash you actually receive varies from one provider to another. So use the Mozo Rewards Revealer tool, to compare the best rewards card for you.

Pros

  • You get to choose how you reward yourself by what you spend your cash on
  • Pay your bill in full and get the most value from a cash back credit card

Cons

  • Expect high interest rates and an annual fee with a cash back credit card
  • Some cards may have a cap on how many points you can earn

Frequent flyer credit card

If you love to travel and see the world or just enjoy touring Australia, a frequent flyer credit card has plenty of benefits to suit you. A frequent flyer credit card is directly linked with an airline's frequent flyer program like Qantas or Virgin. Whenever you make a purchase on your travel rewards card you’ll accrue points or flyer miles that go towards your frequent flyer program.

Pros

  • Pay less on your overseas holiday by using your points
  • Free overseas travel insurance
  • Interest free days when you pay off your balance in full each month

Cons

  • Frequent flyer points can expire
  • Standard credit card fees apply to a frequent flyer card such as annual fee, program fee, cash advance fee and more

Platinum and black credit card

Enjoy and embrace the best credit card perks on the market, from top travel benefits to personalised concierge service. High end black cards are available to people over 18 years who earn over $50,00 p.a and have an impeccable credit rating. Compare 114 rewards cards in the Mozo comparison engine.

Pros

  • Exclusive deals for dining and travel
  • Platinum cards offer the best rewards program with the most points earned for dollars spen
  • Points do not expire on platinum cards

Cons

  • Annual fee is very very high, some providers charge over $300
  • Platinum and black credit cards have heft interest rates

Questions to ask yourself when choosing a credit card

Q1. Is my credit card going to be used for day to day spending?

Q2. Will I only use my credit card a few times a year on big purchases?

Q3. Am I organised and diligent to pay off my credit card balance in full each month?

Q4. Could I be a little forgetful and/or am I poor at budgeting and will carry over my outstanding balance each month?

Q5. Is travelling a hobby and something I love?

Q6. Where do I like to do my grocery shopping?

Q7. How’s my crediting rating, strong or poor?

Q8. Do I have a lot of credit card debt already built up?

^See information about the Mozo Experts Choice Credit Cards Awards

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