How to choose a credit card that’s right for you

How credit cards can come in handy

Credit cards provide you with a line of credit when you need it, which means they can help you manage your finances if used responsibly. And given that they are accepted around the world, they can certainly be useful for international travel.

But here’s the thing. You need to choose a credit card that’s right for you and your spending habits.

Know your spending habits

Before choosing and applying for a credit card, it’s important to understand your spending habits and how disciplined you are with money.

If you’re someone who pays off their credit card balance in full each month, then you may want to consider a credit card that earns Reward Points or Frequent Flyer Points.

However, if you think there may be times when you can only make the minimum repayments, then you may want to consider a low interest rate credit card. Below we explain the different types of credit cards and more.

What are the different types of credit cards

What to look for when comparing credit cards

Below are some of the things you should consider when comparing credit cards. Want to compare ANZ credit cards? We have a handy tool for that.

How do interest-free periods work?

Nowadays, a lot of credit cards come with interest-free periods, which usually run from the beginning of a statement period to the payment Due Date. If an interest-free period applies, it means you could avoid paying interest on your purchases balance during that period, so long as you pay the Closing Balance (or if applicable, the ‘Adjusted Closing Balance’) in full by the Due Date on your statement each month.

At ANZ, if you have an interest-free period on purchases and you don’t pay the full Closing Balance (or Adjusted Closing Balance) shown on your statement by the Due Date each month, then the interest-free period will not apply and the outstanding purchases balance on your account will attract interest.

• Look for a generous interest-free period

That's why it's often a good idea to look for a credit card with a generous interest-free period. At ANZ, the interest-free period on purchases across all new credit cards (excluding business cards) varies depending on the credit card. Our cards offer up to 55 days' or up to 44 days' interest free. Remember, it’s "up to" 55 days or 44 days, not 55 days or 44 days for every purchase.

Given interest-free periods run from the beginning of a statement cycle until the payment Due Date, the number of interest-free days will depend on when you make the purchase within your statement cycle (and the type of purchase).

Bottom line? Always aim to pay the Closing Balance (or Adjusted Closing Balance) in full by the Due Date on your statement so that you can maintain your interest-free period. Learn more about interest-free periods and how they work.

How do credit limits work?

When you apply for a credit card, the provider will offer you a credit limit for which you’re eligible and will be set out in your Letter of Offer.

Remember, you don’t have to accept the full amount offered. You can always ask to reduce your credit limit if you think it’ll suit you better, so long as it is not below the minimum credit limit that applies to your credit card type. Learn more about credit limits and how they work.

Credit card features and benefits

Credit cards with higher credit limits generally come with more features and benefits. This may include things like complimentary travel insurances, extended warranties on purchases, a personal concierge to help with hotel and restaurant bookings, and so on and so forth.

While it’s smart to maximise any features and benefits that come with your chosen credit card, it’s a good idea not to get too mesmerised by them. You’re better off sticking to some of the tips above to ensure that you choose a credit card that’s right for you.