Australian credit card companies, namely Visa, Mastercard and American Express, issue credit cards to banks, other financial firms and supermarkets.

There are a multitude of these fantastic credit cards on the market and each one is tailored to meet the unique needs of individual cardholders.

So, if you’re new to this, pay attention! Perhaps you’re young and have decided to move into your own place and it needs some furnishing. In this case a little credit will be needed to buy all the things you can’t afford upfront on your own. Then it’s a good idea to start with something a bit more basic and feel your way around having credit in the first place and how it all impacts your spending, financial mindset and basic affordability.

A low rate credit card will feature a low purchase interest rate, all the while offering a lower annual fee. This is ideal for such purchases, if managed correctly. The difference with platinum credit cards is that they typically charge higher rates of interest and higher annual fees.

Once you’re comfortable that you’re ready to get your hands dirty, consider these credit cards:

Low interest rate credit cards

These come with a pretty low purchase rate of interest which helps with those purchases that you cannot settle before the next date of statement. You might even be lucky enough to pay as low as 0% in some cases if there’s a promotion running by the credit card provider. You can also obtain credit cards with reward programs that will really benefit you based on your habits, spending and financial goals. 

No annual fee credit cards

These cards have higher rates of interest, but on the upside, if you don’t use the card, you aren’t liable for any fees or charges! If you’re trying to build up a credit record, this is the ideal way to go.

Low-income credit cards

If you’re not looking to kit out your entire Australian lair, then a low-income card might suit you best since there are low credit limits on them. To qualify for one of these cards, your annual income needs to be around $15,000 or more to service the credit limit of $500. They have very low fees which is perfect for beginners to the world of credit cards.

Student credit cards

There are credit cards tailored to meet the lifestyle of a student. Obviously high annual fees and high rates of interest aren’t in the favour of any student who has a limited budget. Rates and fees are reasonable in most instances. 

Beginners do's & don’ts of credit cards

Credit card do's

Keep your payments as regular as possible. You’ll have to make a minimum repayment each month and this protects you from paying any penalty fees for late payments. When you can, always pay more than required.

Stick to your budget. Just because you have access to credit does not mean that you should use it. It’s there for cash emergencies only or well planned expenses. Don't add any unnecessary expenses to your budget as you will end up in trouble before you know it.

Be informed. Don’t use the card absentmindedly and think that everything will be okay provided you are making payments towards it. There are a number of ways that poor management of the credit period, the repayments, using the ATM etc, can land you into a bad debt situation than you can afford. Understand how it works and play by the rules. There are interest-free periods that you need to be aware of and become familiar with all instances where you might be charged a higher rate of interest than the norm.

Credit card don'ts

Do not draw cash. Drawing money from an ATM with your credit card or otherwise paying certain bills with it, will attract very high rates of interest as well as cost you a couple of dollars for the transaction. We’re talking 29% per annum. Interest-free days mean nothing when you make a cash advance, so remember that too!

Do not give anyone your credit card information. Obviously, when purchasing online that’s a different story, although you should still be very wary which sites you are purchasing goods on and make sure that they are a secure paying site. It would be dangerous to dish out those details over SMS or an email that you don’t trust.

Do not apply for any credit card if you feel that you cannot afford it. There are fees to be aware of, interest rates, the potential for landing in debt if not well managed and so many other risks. Steer clear if you’re unsure whether or not you can afford the repayments. Your budget will determine this for you.

Applying for your very first credit card

It’s not that scary or complicated really. It’s as simple as deciding which card suits you best and making sure you meet the minimum requirements stipulated by the Aussie bank or provider. You should have all the necessary documents handy for the process of applying and you’ll have an application form that you need to complete. Questions that they might ask include what your income is, what your assets and liabilities look like, and where you live and work.

You can expect a response in no time and can simply wait for your very first credit card to be delivered!