Credit Card Comparison


Credit Card Comparison can help you access the merits of credit card offers and features in one place, saving you time and also simplifying the process of comparing the credit cards by presenting them side by side for easy comparison.

To conduct a credit card comparison you will first need to understand the key features of each of the credit card types, and decide which of these features are particularly important and relevant to your circumstances and credit card needs.

The Australian credit card types can be classified into 7 categories:Credit Card Montage

  • Balance Transfer Credit Cards
  • Rewards Credit Cards
  • Frequent Flyer Credit Cards
  • No Annual Fee Credit Cards
  • Low Interest Credit Card
  • Student Credit Cards
  • Business Credit Card

Balance Transfer Credit Card Comparison

A balance transfer credit card is one that enables you to transfer your credit card debt to it from your current credit and store cards. The key benefit of these balance transfer credit cards is that the interest rate or balance transfer rate, which is charged to the transferred debt, will be lower than the current interest rate being charged on the debt. The net affect of making a balance transfer are potentially significant savings on interest charges.

Whilst the credit card debt which you owe the credit card provider remains the same, the interest savings you can potentially make are significant because balance transfer credit cards charge low or even 0% interest rates for a fixed period of time on the transferred balance. Once the fixed period of time, or balance transfer period ends, you will have to pay higher interest on any remaining debt, until the balance is fully paid.

To make a comparison of balance transfer credit cards four key card features should be considered, the Balance Transfer Interest Rate, the Balance Transfer Period, any Balance Transfer fees and the Revert Rate to which the credit card reverts at the end of the balance transfer period.

 

Compare Balance Transfer Credit Cards 

Balance Transfer Interest Rate - This is the promotional interest rate that will be applied to the debt transferred to the balance transfer credit card. When conducting your comparison of the credit cards offering a balance transfer deal a key feature of the cards that should be compared are the Balance Transfer rate being offered and the Purchase Interest Rate of your Current Credit Card from which you are transferring the debt. For any balance transfer to make financial sense the balance transfer rate needs to be significantly below the purchase interest rate you are currently being charged against the debt. Typically Balance Transfer rates are below 2% p.a. with many deals offering balance transfer rates as low as 0% p.a. To access the 0% p.a. balance transfer offers you will need to have a blemish free credit report and have no outstanding bad debts.

Balance Transfer Period - The number of months that the balance transfer rate applies to the transferred debt, this tends to range between 6 and 24 months.

Balance Transfer Fees - This administration fee is generally charged as a % of the debt you are transferring, with fee levels averaging at around 2%. Balance Transfer Credit Cards can be found that charge no fees.

Revert Rate - This is the interest rate which will applied to any debt which remains once the balance transfer period comes to an end, these revert rates will be significantly higher than the balance transfer rates and should be a key consideration in your comparison of balance transfer credit cards.

In conjunction with these cost related criteria your credit card comparison should also consider a couple of points regarding the application process and eligibility:

Each credit card provider has strict rules concerning which credit card providers it will accept balance transfer from, as a general rule you will not for example be able to make a balance transfer to a balance transfer credit card offered by your current provider.

To be accepted for Balance Transfer Credit Card you will need a clean credit report, so prior to making any applications be sure to check your report and rectify any issues on the report.

 

Rewards Credit Card Comparison

Rewards credit cards are designed to reward cardholders for paying for transactions with their card. The more you spend on your card the more reward points you earn, and in turn, the more valuable the rewards you are able to acquire through points redemption.

To make a comparison of Rewards Credit Cards you should consider 5 card features: The Points System, The Rewards on offer, The Points Redemption Rate, Purchase Rate, Annual fee/Rewards Fee and the presence of any caps or expiry conditions on the rewards points.

Points System - Reward Points are earned each time you make an eligible purchase with your card. Each reward card will have a “point earn rate” which defines how many Reward Points you earn for each dollar spent. As a benchmark 1 point per $1 spent is in the mid range of the point earn rates offered by the Australian Reward Credit Card providers.

Alongside this standard point earn rate some reward credit cards also feature higher point earn rates when you make purchases with your card at certain “reward partner” retailers, these purchases can often attract point earn rates double that of the standard earn rate.

As the popularity of Reward Credit Cards has increased the credit card providers have evolved their offering to help cardholders to maximize their point earning opportunities. The latest innovation has been the offering of “companion credit cards” which sees you have 2 credit cards on a single account, with the sole objective of optimizing all reward point earning opportunities. So for Example you may hold an AMEX card and a Visa or MasterCard, with each of the cards offering different point earn rates for different types of purchases. An example might be overseas purchases where AMEX tends to offer significantly higher earn rates than either Visa or MasterCard, and so for this purchase you would use your AMEX card..

 

Compare Rewards Credit Cards 

How can Reward Points be used? - all Rewards Credit Cards work on the presumption that at some point in the future you will wish to redeem your points for a Reward. When making your comparison of Reward Credit Cards you should ensure that the redemption opportunities match your interests and requirements and represent value. The rewards available broadly fall into 5 categories:

  1. Travel Related Rewards  - offer the ability to redeem your reward points for a wide range of travel services including airline tickets, hotel bookings, flight upgrades, travel insurance and package holidays. If you are a frequent traveller the frequent flyer credit cards aligned with the major Airlines are an option worth comparing, as they not only provide travel related rewards but also include redemption opportunities across the majority of the other categories below.
  2. Gift Cards - from many of Australia leading retailers are offered across many of the Card Reward programs, including Myer, Westfield, JB Hi Fi and Harvey Norman.
  3. Cash Back - enables you to redeem reward points for cash that is generally credited back to your credit card. The option to redeem your reward points for cash only kicks in once you reach a minimum points balance, this minimum level varies by card provider.
  4. Merchandise - The range offered by Credit Card Reward programs are extensive with thousands of goods offered in the leading reward programs run by Qantas, Virgin, Westpac and ANZ. These Reward stores include Technology, Home and Garden, Baby and Kids, Beauty and Fashion, Sports and Wine offerings comparable with your local shopping centre.
  5. Charity Donations - can be made by donating your points to a range of charities who partner with the Reward Point programs.‚Äč

The Points Redemption Rate of the points you can vary significantly by program and require careful comparison, so for example one reward program may offer a Myer $50 gift card for 5,000 points while another Reward Program may require 8,000 points for the same $50 gift card.

Conditions associated with Reward Points should be included in your credit card comparison as they can impact both point earning and point redemption. Increasingly reward credit cards are featuring point caps which put a limit on the number of points you can earn across a defined period, usually monthly or annually. To maximize the reward points you can earn from your credit card look out for credit cards with no point cap that will reward you for every $1 you spend using your card.

 On a more positive note many Reward credit cards offer introductory offers of “Bonus Points” to new applicants, these bonus points tend to be awarded following a successful application and some initial purchase hurdles, such as making a purchase within the first 3 months of holding your new card.

 

Frequent Flyer Credit Card Comparison

Frequent Flyer Credit Cards are a form of rewards credit card which are designed to reward cardholders with reward points that can be added to a nominated frequent flyer account The Frequent Flyer programs in Australian have millions of members who earn reward points for flying with their preferred airline, many of these frequent flyer members have also chosen to use a Frequent Flyer credit card aligned with their chosen Airline to provide an additional means of accumulating Frequent Flyer points, by attaining points in return for using their frequent flyer credit card for everyday purchases.

These points can then be redeemed through the Airlines Frequent Flyer stores that offer flights, hotels, experiences and a wide range of merchandise.  The 3 most popular Frequent Flyer Programs in Australia are Qantas Rewards, Velocity Rewards and KrisFlyer Miles, all of which offer have alliances with Reward credit card providers in Australia

Frequent Flyer Credit Cards focus on rewarding cardholders with points of a single airline partner, so prior to making any comparison of specific frequent flyer credit cards you should decide on your preferred airline. This may involve an obvious choice if you are  a member of a frequent flyer program

If you are not a member of any Frequent Flyer Program you will need to select a preferred airline with whom you see value in accumulating points with. This selection will be eased, by answering a couple of questions:

1. Does the Airline I normally choose to fly with have a frequent flyer program?

2. Does this Frequent Flyer Program offer the types of rewards that are attractive to me?

3. I fly on a regular basis but I am not loyal to any single airline - are frequent flyer credit cards relevant to me?

Many frequent travellers select and book their flights based on the price of the ticket offered, this often results in several airlines being used to fulfill their travel itineraries. Where no single Airline is being used on a frequent basis the value of a frequent flyer credit card diminishes as the ability to accumulate a points total worthy of redeeming becomes difficult. The good news is that the card providers have recognized that some frequent travellers want greater flexibility when earning frequent flyer points from their credit card spend, and have responded by offering Reward Credit Cards that are aligned to a numbe of Airline partners, as opposed to just one. This flexibility means that any points earned on credit card purchases may be transferred to any of the airline partners participating in the Reward Program, an popular example of this type of program is the Altitude Reward Program, operated by Westpac Group, that allows you to transfer your Reward Points to any of 10 airlines.

 

Point earn Rate Comparison of Frequent Flyer Credit Cards?

Having decided on a preferred Airline your credit card comparison can now begin. A good starting point is to consider the credit cards Point Earn rate, which defines the number of points you will earn for each $1 spent using your credit card. When conducting this comparison to important factors should be considered:

 

1. The base point earn rate and any bonus rates

The majority of frequent flyer credit cards offer a base point earn rate that applies to the majority of purchases, and then a second that is higher than the base, by rewarding you for spending with a range of “bonus partners”. Increasingly a third tier earn rate is also available where the point earn rates are again increased for spend on travel products offered by your preferred airline, so for example purchasing a holiday via Qantas holidays with your NAB Qantas Rewards Credit Card.

 

2. Reward points are only earned on eligible purchases

The definition of eligible purchases varies by credit card provider, so check the terms & conditions of the frequent flyer credit cards you are comparing. As a general rule eligible purchases are everyday purchases, with non eligible purchases being balance transfers, utility bill payments, ATO payments and council related payments.

 

Introductory Bonus Point Offer Comparison?

With the increasing popularity of Frequent Flyer Credit Cards the credit card providers often use introductory offers to entice new cardholders to select their credit card. These introductory offers range from 5,000 to 60,000 bonus points. When making a comparison of these introductory offer you should pay close attention to any terms and conditions associated with receiving the bonus points as increasingly these offers include spend tiers which must be met, in a specified time period, for the bonus points to be awarded.

 

Do Frequent Flyer Rewards points have an expiration date?

Frequent Flyer Points earned through credit card usage are regulated by the same terms and conditions of the points earned through flying with your preferred airline, so to understand any points expiration details you should check your frequent flyer terms and conditions.

What is point capping?

The presence of a points cap on your frequent flyer credit card means that your ability to earn points from your spend will be limited relative to this cap. These caps generally operate at a statement period level, stating that X number of points can be earned within this period, and once this points level is reached any further spend will not earn any points.

To access the potential impact of any point caps make a comparison of your forecast monthly credit card spend with the cap values the frequent flyer credit card places across the statement period. Credit cards with uncapped points do exist, but are few in numbers, Qantas Credit Cards with No Points Cap and Velocity Credit Cards with No Points cap should be considered if you are seeking to be rewarded for every dollar of spend on your frequent flyer credit card.

 

No Annual Fee Credit Card Comparison

When No Annual Fee Credit Cards where first launched they where cards that where stripped of benefits in return for $0 annual card fee. As this no fee, no frills proposition gained popularity with Australian consumers the Credit Card providers began to add benefits to the cards though maintained the $0 fee.

No Annual Fee credit card comparison should include an appraisal of the cards terms and conditions, and the range of benefits that are now increasingly being packaged with these popular credit cards.

 

Compare No Annual Fee Credit Cards 

Is the No Annual fee for  ever?  This is question which has recently become very relevant as a new tranche of credit cards have been launched onto the market which offer a $o card fee for an introductory period, usually 12 months, post which the annual card fee reverts to the standard fee. The original No Annual Fee Credit Cards where the $0 fee is for the life of the card do still exist, though they are few in numbers.

When making your comparison of the No Annual Fee credit cards consideration should be given to the benefits that are increasingly being included on these cards such as Balance Transfer Offers, Interest Free Days on Purchases and Reward Programs.

The Purchase Interest Rate of No Annual Fee Credit Cards are generally in the mid range so it is important these accessed in conjunction with the waiving of the annual fee, as any interest charges on outstanding balances will soon wipe out any positive impact of not paying an annual card fee.

 

Low Interest Rate Credit Card Comparison

Low Rate Credit Cards are generally defined as featuring a Purchase Interest Rate of below 15% p.a. When making a comparison of these Low Rate Cards it is important to understand that the low interest rate which these cards promote is the Purchase Interest Rate, with the other interest rates for Cash Advances and Balance Transfers often buried in the small print,  but certainly worthy of inclusion in any comparison of low rate credit cards.

Low Interest Rate Cards are favored by cardholders who frequently carry a balance or debt on their card each month, against which they wish to minimize the monthly interest costs incurred.

 

Business Credit Card Comparison

A Comparison of Business Credit Cards should commence  with the costs of using the card, followed by an appraisal of the cards features to ensure it satisfies the businesses needs and how they wish to use it. These requirements may include issuing of cards to multiple cardholders, different credit limits for cardholders and the importing of card statements into a particular book keeping system, such as Xero or MYOB.

Purchase Interest Rate - If credit balances are going to be carried on the card each month it is critical the Purchase Interest Rate is competitive, as this will determine the amount of interest which will be payable on these outstanding balances.

Cash Advances - If the Business Credit Card is going to be used to acquire cash the Cash Advance rate will need to be compared as this is the interest charged for any cash advanced using the card. An important point to consider on Cash Advances is that the Interest Charge normally commences on the day on which the withdrawal was made and so no interest free days apply across cash advances.

Annual Fee - Business Credit Cards annual fees cover a very wide range as the cards include a varied spectrum of features. Cards do exist which attract annual fees below $100 p.a. but the majority feature fees in the $100- $200 range. It will also be important to compare the rate charged for including additional cardholders on the account if your plan is to issue cards to a number of employees.

Interest Free Days - The ability to delay paying the balance on the credit card may assist in cash flow so interest free days should certainly be considered in your Business Credit Card comparison. A point to look out for is that cards with lower interest free days tend to have lower annual fees, so be sure to balance the benefits to your business of each of these characteristics.

Rewards Program - Businesses are one of the most frequent users of credit cards and represent a large proportion of the dollars spent on Credit Cards so the opportunity to earn rewards points is significant. A number of Business Credit Cards do offer Rewards Programs, many with rewards that would be handy to businesses such as flights, hotel accommodation, Technology Products and gift vouchers for many of the high street retailers.

 

How to Compare Student Credit Cards

Student Credit Cards have been designed in the knowledge that students are focused on their studies, having fun and managing a tight budget. The eligibility criteria to apply for a Student Credit Card have lower thresholds than other card types as the card providers understand that you won’t have a massive monthly income and that you don’t have mountains of cash stashed in your bank account.

Comparison of Student Credit Cards starts with accessing the eligibility criteria of the cards as there is no point applying for any cards that are going to reject you based on not meeting these publicized criteria. Typically these criteria include a minimum annual income level, proof that your registered with a higher educational establishment in Australia, you are 18 years of age and are an Australian Resident.

Having established the Student Credit cards for which you can meet the eligibility criteria the next step is to compare the costs of each of the credit cards, the key costs to be considered are Fees, Purchase Rate and Interest Free Days.

Student Credit card Fees - The first fee to access is the Annual Card Fee that is charged by the Card Providers at the point you receive your card and then on the anniversary of this date. The fee for a Student card is on average is around $50 per annum, but deals are frequently offered by the Card Providers that see this fee waived for an introductory period (usually the first 12 months) so look out for these. Two other fees to be aware of are the Over Limit and Late Payment Fees that are charged when you fail to make your monthly payment on time or spend beyond the monthly credit limit set on your card.

Purchase Rate - This is the % rate of interest you will get charged on any debt your do not pay off on your credit card on the due date, the rate tends to fall between 10% p.a. and 15% p.a. The objective when comparing the purchase rates is to find the card with lowest purchase rate and then make sure it also has a low annual fee, as a combination of a low purchase rate and a low annual fee is a great combination.

Interest Free Days - This is the period commencing on the first date of your statement cycle plus the number of interest free days offered by the credit card. What is means is that your payment for that statement cycle is not due until X days post the 1st date of the cycle which means you pay no interest on any purchases made during that period so long as you settle the account on or before the interest free days have lapsed. You are essentially looking for most interest free days that on Student Credit Cards tends to be 55 days.