If you’re looking to get into your first credit card and need help deciding what to choose or your credit card applications are denied, this Article is for you. I will review 5 of Australia’s best beginner credit cards that help you to decide your best first credit card. As these are the best first credit cards, I recommend you expect only a few credit card points or cool features. But think of these cards as stepping stones for more attractive, feature-rich cards after you’ve built up your credit score.
Getting Your Best First Time Credit Card
With so much complicated information out there, it’s easy to understand why you might feel you need more time to feel ready for your first credit card. But having a no fee credit card comes with a ton of benefits, such as the ability to build your credit score, protection against fraud, and, of course, rewards like cash back in miles. It’s important to understand that when you pay with a credit card, nothing is actually coming straight out of your bank account.
Instead, the bank that issued you the card is paying on your behalf with the expectation that you’ll pay them back at the end of the month. This is why banks look at your credit score and income before approving you for a credit card: They want to feel confident that they’re going to get repaid for all the money they basically lent you.
If you don’t pay back what you owe at the end of the month, you’ll be charged a ridiculous interest rate, which is the last thing you want. Now, when you’re actually looking at a credit card offer, there are only five things you need to look at.
Annual fees
Many cards will charge you an annual fee to keep the credit card open. While there are good credit cards out there with annual fees, I recommend staying away from cards with yearly payments for your first credit card for one simple reason. Your first credit card will have the biggest impact on your credit score, and if you choose a credit card with an annual fee that down the road you end up no longer wanting, you’ll either have to close the credit card, which will hurt your credit score, or you’ll end up continuing to pay an annual fee for a card you don’t want anymore to keep your credit score up.
Annual Percentage Rate
This rate is typically given as a range because it’s based on your credit score, and you will find out your exact percentage rate after you get approved for the card.
Foreign Transaction Fees
This is basically an additional fee on your spending that you have to pay if you use your card internationally. For some of you, this may be a huge deal, and for others, it may not matter at all. It depends on your lifestyle and how often you plan to travel to other countries.
Credit Cards Rewards
Not all credit cards have rewards, but for those that do, there are generally two types of rewards. The first is points or cash back that you get for spending money on your card, and the second is a sign-up bonus, which is usually a cash bonus you get for spending a certain dollar amount on your card in the first few months.
Issuing Banks
Now, this is something that only some people talk about when looking at credit card offers, but it can really make or break your experience with the credit card. Eight-tier banks offer some of the best credit cards or credit card experiences. B-tier banks are the middle of the pack, and C-tier banks are banks that you should generally stay away from. In A tier, we have Discover, American Express, and Chase.
Discover, and American Express always rank far above the rest when it comes to having a good customer service experience while also offering good credit card deals. While Chase may not have the best customer experience, its credit card options are so good that it’s worth being an A-tier anyway.
In the B tier, we have a lot more banks because they’re not particularly amazing or over the top, but they’re not the worst either. You’ll generally be fine getting a credit card from one of these banks, but expect them to be off your side when you need help.
Lastly, there are banks that you should avoid. These banks score poorly on customer experience surveys and make a lot of their money by charging fees for all sorts of things you wouldn’t expect. Credit One, in particular, uses a very similar name and logo to Capital One, which has led many people to think they’re the same company when they’re really not.
Billing Cycle Explained
You’ll also see something about a billing cycle as well that can get complicated, but here’s a simplified explanation. Your billing cycle runs from May 1st to May 31st, on the last day of your billing cycle. So, in this case, on May 31st, you’ll get sent a billing statement that lists all the things you’ve purchased on your credit card and tells you how much you owe. The statement will also have a due date on it, which tells you when you need to make your payment.
But that’s not to say that you shouldn’t because if you don’t pay off your balance in full every month, you’re going to get charged that crazy APR on everything you didn’t pay back.
Should You Carry a Balance
Second, and this is related to the first piece of advice: always pay off your balance in full every single month so you don’t get charged the ridiculous interest rate. Even if your card has a special offer for a 0% interest rate, you should still pay off the card in full every month, or else things could easily get out of hand.
Getting Denied for a Credit Card
Lastly, if you apply for a credit card and get denied, it’s not the end of the world, OK? People get denied all the time. It’s nothing personal. It’s just what the bank decided to do in your situation.
5 Best Credit Cards for beginners
SIGN-UP BOUNS
250$ back to your new card, when you spend $1,500 on eligible purchases in the first 3 months
ANNUAL FEE: 50%
0% balance transfer rate
Credit Limits
$1,000 Minimum Credit Limit
Interest Rate
Low-interest rate of 10.99% on purchases
ANNUAL FEE
0% balance transfer rate
Eligibility
Minimum income $50,000
$55
Annual Card Fee
13.99% p.a
Variable Interest rate on Purchases
$500
Minimum Credit Limit
$0
Annual Card Fee
19.99% p.a
Variable Interest rate on Purchases
$5
International Cash Advance Fee
$59
Ongoing Annual Card Fee
13.74% p.a
Variable Interest rate on Purchases
$500
Minimum Credit Card Limit
What a Credit Card Is?
Credit is another word for debt, and when you buy something using a card, you must pay it back at some point in the future. After spending with the card, you’ll receive a statement from your card issuer with the balance or the amount you’ve paid and a due date for repayment. If you miss the due date, you will start accruing interest at the rate set by the card issuer.
It would help if you always tried to pay off your balance in its entirety before this date. If you don’t intend to do this, you should reconsider spending or use a low-interest card. You’ll also have a minimum repayment amount on this statement. You need to make this minimum repayment to avoid incurring fees. Again, if you can ignore this amount and pay down the entire debt balance or pay down as much as you can to reduce your interest charged, two different companies will be involved with each card: the provider and the processor.
Starting with the provider. These are the guys with their logos all over the credit cards. Think along the lines of Commbank, A&Z, and Westpac, among many others. When you use a beginner credit card, in most cases, you’ll spend their money and create a debt balance you’ll need to repay. Some of the smaller providers use other larger banks to fund your purchases.
Kogan, for example, uses National Australia Bank, which you’ll find at the bottom of their offer page in terms and conditions. Alongside the provider is the payment processor. When you make a purchase, these are the guys who organize for the money to be moved from your credit card provider to the shop you’re purchasing from.
Shops can decide which processes to accept, as they face different charges depending on the processor. That’s why sometimes you’ll pay extra for pay, wave, or credit cards, as the processor charges them on every transaction. These are household names such as Visa, MasterCard, and American Express.
What’s The Best Credit Card For First Timers Australia?
ANZ Low Rate Credit Card
We are looking for low fees, simple rewards, and a low-interest rate. The first card is the ANZ Low Rate credit card, which is offered by ANZ with Visa as its processor. This basic credit card has a relatively low annual fee of $58 and an interest rate of 12.49% on all purchases, which is among the weakest in Anz’s cards. They have two simple offers available to new cardholders.
You can bring the balance over to this card, paying just the 2% fee to do so, and benefit by paying no interest for 28 months on the balance you transfer. ANZ even won the Finder award last year for having the best balance transfer card in the market. After 28 months, your interest rate shoots up to a rate of 21.24%, so make sure you wipe the debt within those 28 months.
Finally, you’ll pay no annual fee for your first year, saving $58. The second option you have with this card is a cash reward of up to $250 when you spend over $1500 using the card within the first three months of the card approval. So these are great rewards that are simple to understand for beginners, with a minimum credit limit of $1000. This card also allows you to put stock cards in place if you are often tempted to overspend, as you can keep your limit relatively low if there are a few people needing access to the card.
You can also get up to three additional cards at no extra cost. With ANZ as the card issuer, you also have access to Cash Rewards, which offers cash back on purpose purchases from over 2000 popular retailers, including Amazon, booking.com, Apple, and Subway. You can also link the card to your phone through Apple, Google, Samsung, Fitbit, and Garmin Pay and, of course, have access to all of the usual ANZ anti-fraud protections.
The downside of this card, however, is that it offers no perks or rewards compared to some of the other, often more expensive, cards in the market. ANZ credit card offers complimentary insurance on purchases or travel using this card, so they keep things simple with a no interest credit card rate, low annual fee, and some decent signup offers if you want cash back or a balance transfer.
American Express Low Rate Credit Card
If you want to exclusively find a card that offers low fees and a low interest rate, this is the card for you. It has absolutely no annual fee and a very low interest rate of 10.99% on purchases, making it a great option for beginners looking to minimize costs. While American Express as a processor is less widely accepted than Visa or MasterCard, you can use the card at larger and national chains, including supermarkets, department stores, and restaurants.
With such low fees, the card comes with no frills or reward programs. You have simple purchase protection and refund cover in case your purchases are faulty, and you can issue up to four additional cards at no cost. Amex card also offers periodic shopping discounts that are available through the Amex app.
Saint George Vertigo card
The third card is the Saint George Vertigo card, which uses Visa as its processor. Although this best starter credit card has a higher interest rate than some of the other cards we’ve looked at. At 13.99% per annum and a $55 annual fee, this card has a great sign-up offer. Like the ANZ Low rate card, you have two options here. The 1st is a 0% balance transfer for 32 months and a fee of just 1%. This is four months longer and has a fee half as high as the ANZ card featured earlier. If the balance isn’t fully repaid by the end of the 32-month interest-free.
The rate shoots up to 21.49%, slightly higher than the ANZ card. The second option, which caters to those without a balance to transfer, offers 10% cash back for six months at selected supermarkets and petrol stations, including ALDI, Kohl’s, and Woolworths. This offer lasts for just the first six months of having the card, but by spending $4000 on fuel and groceries at these stores, as many people would anyway, you can get a fairly hefty payback. You can also get a balance transfer at 6.99% for 12 months under that particular offer.
You can also set the credit card limit low on this card as low as $500 many. You can easily keep a cap on your access to credit. If this is a concern for you, you can also add a second card order at no cost, and the card can easily be linked to Apple, Google, and Samsung Pay.
The downside of this card is that it doesn’t offer a reward system or insurance in travel perks, so make sure that you take full advantage of the joining offer benefit. If, on the other hand, you don’t care for the credit card rewards and don’t anticipate carrying an interest-bearing balance on this card, the Saint George’s No Annual Fee card is also a good option to explore with no annual fee.
Coles No Annual Fee MasterCard
On the 4th card, we have the Coles No Annual Fee MasterCard. This card has the highest interest rate of any of the cards we’ve looked at so far, at 19.99%, but if you pay off your balance in full every single month, you won’t ever have to pay this anyway. The card has no annual fee and a low minimum limit of 1000, and if you want to make a balance transfer, it has one of the best offers.
This card offers a balance transfer offer of 0% for 12 months with no balance transfer fee. The other cards charge a fee between one and 2%, so if you have a balance that you can fully repay within 12 months, this might be the better option to minimize fees. Alongside the balance transfer option, you can also earn points, which is rare among cards that don’t charge an annual fee.
Now, this could be better, but for a card with no annual fee, this is just a bonus. When you sign up for the credit card first, they’ll also give you 30,000 Flybys points, which have a value of around $150.00. It’s okay for a free card. So, if you’re looking for low fees, a reward system, or a short-term balance transfer with no interest, this is a great card to consider. Just make sure that you pay your balance off each month or by the end of the promotional balance transfer. This will avoid the relatively high interest rate on this card.
Westpac Low Rate Credit Card
They also have two similar offers. The first is the option of $50.00 cash back each month should you spend over $1000 a month for five months using the card. If you have already banked with Westpac and applied for the westpac lite card, they’ll waive the annual card fee. The second offer is for a balance transfer, also for 28 months at 0%.
Unlike ANZ West, Pack doesn’t charge you a balance transfer fee, which could save you some money. If, however, you don’t fully repay your balance transfer by the end of those 28 months, you’ll have to pay 21.49% interest, the same as American Express. On purchases, you’ll pay a rate of 13.74%. The westpac low rate card also has a minimum credit limit of $500, which is relatively low and requires cardholders to have a minimum income of $30,000 a year.
Westpac also seamlessly integrates with Apple, Samsung, and Google Pay. To find out more about Westpac credit cards, click here. There you have it—five of the best beginner-friendly credit cards currently available on the Australian market. From balance transfers to cash-back offers and reward schemes, as well as basic low-fee and interest-rate cards, we’ve covered it all.
Top 5 Best Credit Cards for Young Adults
They are perfect for people who want to get started using credit cards but want to avoid paying annual fees. So, let’s jump straight into the first credit card. The first credit card is the American Express Essential Card. The best thing about this credit card is you’ll get $100 cash back on your statement for any purchase. This is when you spend at least $1500 within the first three months on your credit card.
After that, interest-free. It does have an interest rate of 14.9, 9% on purchases. However, if you keep on top of your credit card statements and pay off the full credit card balance on time every single month like me, then you won’t have to pay any interest on your credit card. With this card, you’ll receive 1.25 points per dollar spent, and on purchases within government bodies, you’ll receive one point per dollar.
For example, you can transfer your points to eight different airline partner programs, like Virgin Australia, Emirates New Zealand, and more. You could even use these points to get gift cards at places like Coles, David Jones, Harvey Norman, JB, hi-fi, and more. And finally, you can also use these points to pay off transactions within your American Express statement. Other benefits of using this card include free phone screen insurance that covers repairs of up to $500.
When you do, pay for your monthly phone plan on your American Express credit card or pay for your phone outright using your American Express credit card. In order to be eligible for this credit card, you need to have an annual income of $40,000 or more and no history of bad debt or payment defaults. You need to be at least 18 years old or older and be an Australian citizen, permanent resident, or long-term Visa holder. Once you are accepted and you start using this card, if you want to refer a friend to this credit card, you’ll also get 10,000 bonus points.
Kogan Money Back Card
The next credit card is the Kogan Money Back Card. With this credit card, you’ll get a $400.00 Kogan credit when you spend $1500 on eligible purchases within the 1st 90 days on this card. As you guessed, there is no annual fee on this credit card with no yearly fees.
With this credit card, you’ll earn two points per dollar spent on eligible purchases at Kogan and one point per dollar spent on eligible purchases outside of Kogan. You can then redeem your points for purchases at Kogan. You’ll also get security and fraud protection. With Fraud Shield and Visa 0 liability, this credit card has an interest-free period of up to 55 days. After that, it’s interest-free. Its annual interest rate is 20.99%.
Qantas American Express Discovery Card
The best thing about this card is you can start earning Qantas points for every dollar you spend, and you can even start earning Qantas points at government bodies. For example, if you need to pay a tax bill with your credit card, then you can start earning points for your tax bill. Only some credit cards offer this, but some American Express credit cards do, including this one.
You’ll also earn 0.5 Qantas points on government purchases within Australia, and outside of government purchases, you’ll receive 0.75 Qantas points per dollar spent. Some other benefits of using this card are a card refund and purchase cover, which means that if you have any trouble getting a refund for purchases that you made with this card, American Express can help you get that refund.
In fact, only recently, we had somebody steal one of our credit cards. That person was making purchases on our card. Because they were using an American Express credit card, we were able to get that money back within 24 hours.
Other eligibility terms and conditions do apply. This credit card has an interest-free period of up to 44 days and, after that, interest-free. It has an interest rate of 20.74% per year, but a reminder: if you do pay off your full credit card balance on time every single month, like me, you won’t have to pay any interest on your credit card once you are accepted and you start using this card. If you want to refer a friend to this credit card, you’ll also get 10,000 bonus points when your friend signs up and they’re approved.
American Express Velocity Escape Card
One of the best things about this credit card is you can start earning velocity points for every dollar you spend, and you can even get points for purchases at government bodies. With this card, you’ll earn 1.75 velocity points on eligible purchases within Virgin Australia per dollar spent. You’ll also earn 0.5 Velocity points per dollar spent on purchases within Australian government bodies, and outside of government bodies, you’ll receive 0.75 velocity points per dollar spent on eligible purchases. Other benefits of using this card include a card refund and purchase cover.
So, if you have trouble getting refunds or if there are any fraudulent charges on your credit card, American Express can help you with that. You’ll need to have an annual income of $40,000 or more. Other eligibility requirements do apply. The interest-free. This credit card is up to 55 days, and after this, interest-free. It has an interest rate of 20.74% per year.
So, it is important to ensure that you keep on top of your credit card statements and pay off the full credit balance in full and on time every month. Once you’re approved for this credit card, you can invite one of your friends and earn 10,000 velocity points per referral.
Coles No Annual Fee MasterCard Credit Card
With this card, you can get 20,000 Flybuys points when you spend $3000 on eligible purchases within the first 90 days. These 20,000 Flybuys points are equivalent to roughly $100 in gift cards or Flybuys dollars.
One feature of using this credit card is that you can get one Flybuys point per $2.00 spent on eligible purchases. Once you get to 2000 points, you can redeem them for $10 off your Kohl shopping or a $10.00 gift card. You can also get access to complimentary insurance in case your card is lost, stolen, or accidentally damaged.
It has an interest rate of 19.99% per year, and that’s why it’s important to keep on top of your credit card statements just so that you can try and pay off the full credit card balance in full and on time so you’re not charged any interest. Another thing to note about this card is there’s also a late payment fee of $30 and this is when they don’t receive the minimum payment due. So that’s another reason why it’s really important to keep on top of your credit card statements.
Why Doesn’t Everyone Use a Debit Card?
One of the reasons why people like to use credit cards is because credit cards often have reward systems for using that credit card for purchases. For example, with a credit card, you can get points for every dollar you spend, and then later, you can redeem these points for gift cards, free flights, hotels, and a variety of other rewards.
