How Australians Really Use Credit Cards
Australians hold credit cards for three main reasons: earning frequent flyer points, managing cash flow across pay cycles, and consolidating existing debt through balance transfers. The 55-day interest-free period remains the single most valued feature, since it lets cardholders pay for everyday groceries, fuel and bills while their salary sits in a high-interest savings account.
The biggest mistake most people make is choosing a rewards card while carrying a balance. Rewards points lose their value quickly when interest accrues at 20 percent or more. A cardholder earning 100,000 bonus Qantas Points through a $12,000 annual spend still comes out behind someone paying 13 percent interest on a $5,000 carried balance. The maths never favours the points in that scenario.
Another common trap is the annual fee that quietly rises after the first year. Many cards advertise an attractive first-year fee of $199, only to revert to $295 or higher in year two. The same applies to rewards program fees, which some banks now charge separately on top of the card fee.
Rewards Cards: Matching Points to Your Travel Habits
If you pay your balance in full each month, rewards cards deliver genuine value. The key is matching the rewards program to where you fly. Qantas flyers should look at cards like the ANZ Frequent Flyer Black, which currently offers 130,000 bonus points plus $200 cashback after meeting the spend threshold. The $425 annual fee stings, but the first-year net cost becomes far more palatable with the cashback.
Velocity members, by contrast, get more from Westpac's Altitude Velocity Black, which offers up to 150,000 bonus Velocity Points across two years alongside Virgin Australia lounge passes and Economy X upgrades. There is an extra $75 Velocity Rewards Program fee on top of the card fee, so factor that in before applying.
For households that want flexibility rather than airline loyalty, the St.George Amplify Rewards Signature offers up to 200,000 bonus Amplify Points across two years, with a $199 first-year fee versus $295 ongoing. The catch is the spend requirement of $12,000 per year to unlock each 100,000-point tranche. If that threshold feels unrealistic, a simpler card earning one point per dollar without caps might serve you better.
The table below summarises the current landscape across major categories:
| Card Category | Example Card | Annual Fee | Points / Earn Rate | Best For | Watch Outs |
|---|
| Big Qantas bonus | ANZ Frequent Flyer Black | $425 | 130k bonus + $200 back | Frequent Qantas flyers | High ongoing fee, earn cap |
| Big Velocity bonus | Westpac Altitude Velocity Black | $295 + $75 program fee | 150k bonus over 2 years | Virgin Australia regulars | Extra program fee applies |
| Flexible rewards | St.George Amplify Rewards Signature | $199 first year, $295 ongoing | 200k bonus over 2 years | Households spending $12k+/year | Strict annual spend threshold |
| Everyday low rate | CommBank Low Rate Card | $72/year ($6 monthly) | No rewards | Balance carriers | Rate is personalised up to 15.99% |
| Balance transfer | ANZ Low Rate (Balance Transfer) | $58 | 0% for 26 months on transfers | Paying down existing debt | 3% transfer fee applies |
| No annual fee | American Express Low Rate | $0 | No rewards, 10.99% rate | Occasional balance carriers | Amex acceptance can be patchy |
Balance Transfers and Debt Consolidation
For anyone carrying high-interest credit card debt, the balance transfer is Australia's most powerful debt tool. The ANZ Low Rate card currently offers 0 percent interest for 26 months on transferred balances, the longest window in the market. A 3 percent transfer fee applies, and the rate reverts to a low ongoing 13.74 percent once the promotional period ends.
The discipline required here cannot be overstated. A 26-month interest-free window only helps if you actually pay down the principal. Set a monthly direct debit that clears the debt before the promotion ends, otherwise you are simply delaying the interest bill rather than avoiding it.
Smaller banks and mutual banks often compete hard on this front. Australian Mutual Bank, for instance, offers a Visa credit card with a 7.90 percent introductory rate for the first six months, no annual fee, and a low ongoing rate of 11.50 percent. Their flexible credit limits range from $1,000 to $25,000, which suits borrowers who want modest limits and zero ongoing costs.
The Hidden Costs: Fees Beyond the Annual Fee
Australians routinely overlook fees that chip away at the value of their card. International transaction fees of around 2 to 3 percent on every overseas purchase add up quickly for travellers. Some cards waive these entirely, making them far better choices for frequent overseas trips. The same applies to cash advance fees, which typically cost $4 per transaction plus a higher interest rate charged from day one.
Late payment fees, usually around $10 to $15, are avoidable with a simple strategy: set up a direct debit for at least the minimum repayment each month. This single step protects your credit score and prevents penalty fees, regardless of whether you carry a balance.
Sarah, a Sydney-based marketing manager, switched from a high-fee rewards card to a no-annual-fee Visa after realising her monthly spend of $2,500 was earning points worth roughly $300 a year, while her annual fee and international transaction fees totalled more than $280. She now uses a card with no annual fee and no international transaction fees, and her travel purchases cost her noticeably less. Her experience reflects a broader shift among Australian consumers who are increasingly price-sensitive about card fees.
A Step-by-Step Approach to Choosing Your Card
Start by answering three questions honestly. Do you clear your balance every month? If yes, rewards cards make sense. If not, prioritise the lowest purchase rate you can find. Where do your points need to go? Qantas, Velocity or flexible rewards programs each suit different travel patterns. How much do you spend annually? Bonus point thresholds of $12,000 or more per year are only worth chasing if your regular spending already reaches those levels.
Once you know the answers, compare cards using the major comparison sites, then check the issuer's website directly for current terms. Pay close attention to three details: the ongoing annual fee after year one, the rewards program fee, and the earn rate caps. These three factors account for most of the difference between a genuinely good card and an expensive mistake.
Australian banks frequently run personalised offers for existing customers. NAB, for example, offers reduced annual fees and bonus points to existing customers through its app. Before applying for a new card, check whether your current bank has an upgrade path that avoids a new credit application on your file.
Final Thoughts
The best Australian credit card is not the one with the biggest bonus points or the most lounge passes. It is the card that matches your spending behaviour, your travel habits and your repayment discipline. Pay your balance in full, and rewards cards reward you. Carry a balance, and the low-rate card wins every time. Choose based on the maths of your own situation, not the marketing, and your card will work for you rather than against you.
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