What is the most important thing to compare in a credit card?

It depends on how you use it. If you carry a balance, the purchase rate matters most. If you pay in full every month, the annual fee and rewards value are more important. Most people should focus on rate first, because carrying a balance even occasionally makes rewards irrelevant.

How do credit card interest-free days actually work?

Interest-free days only apply to purchases (not cash advances) and only if you paid your previous statement balance in full. The advertised maximum (e.g. 55 days) only applies to purchases made on Day 1 of the billing cycle. If you carry any balance, you lose interest-free days on all new purchases.

Is a rewards credit card worth the annual fee?

Only if your spending generates enough rewards to offset the fee and you pay the balance in full every month. Most reward points are worth 0.5-1.0 cents each. With a 1-point-per-dollar earn rate and a $250 fee, you need to spend at least $25,000-$50,000 per year just to break even.

What should I check before doing a balance transfer?

Check the promotional rate, how long the promotional period lasts, the balance transfer fee (usually 1-3%), the revert rate after the promotion ends, and whether new purchases attract interest during the transfer period. Only transfer if you can pay off the full balance before the promotional period ends.

Do all credit cards charge foreign transaction fees?

No. Most cards charge 2-3% on international transactions, but some travel-focused cards charge 0%. On a $5,000 overseas trip, the difference between 0% and 3% is $150. If you travel regularly, a no-foreign-fee card can save more than most rewards programs.

How to Compare Credit Cards in Australia

Why Comparing Credit Cards Is Harder Than It Looks

Credit cards are the most complex consumer financial product to compare. Unlike a savings account or home loan where interest rate is the primary variable, credit cards bundle multiple price dimensions together: purchase rates, cash advance rates, annual fees, reward structures, interest-free days, and balance transfer offers. Comparing on one dimension while ignoring the others almost always leads to a worse outcome.

With 81 credit cards currently tracked on RatePilot, choosing the right one depends entirely on how you plan to use it. A card that's excellent for someone who pays their balance in full every month is terrible for someone who carries a balance. This guide gives you a framework to compare cards based on your actual spending behaviour - not marketing hype.

Step 1: Know How You'll Use the Card

Before comparing any features, answer one question honestly: will you pay the balance in full every month?

This single answer determines which card features matter:

Usage Pattern	What Matters Most	What Matters Least
Pay in full monthly	Annual fee, rewards, interest-free days	Purchase rate
Carry a balance	Purchase rate, fees	Rewards, interest-free days
Balance transfer	Transfer rate and period, revert rate	Rewards
Overseas spending	Foreign transaction fees, exchange rate	Domestic rewards

Most people overestimate their ability to pay in full. If you carry a balance even occasionally, the purchase rate becomes the single most important factor - and rewards become irrelevant because the interest you pay will dwarf any points you earn.

Step 2: Compare Interest Rates (If You'll Carry a Balance)

Credit card interest rates in Australia are among the highest in consumer lending. The lowest purchase rate currently available is 0.00% p.a., but most cards charge significantly more.

Credit cards typically have multiple rates:

Purchase rate - what you pay on purchases if you don't pay in full. This is the key rate for balance carriers.
Cash advance rate - typically 2-5% higher than the purchase rate. Applies from the day of withdrawal with no interest-free period.
Balance transfer rate - a promotional rate (often 0%) for transferring debt from another card. Always reverts to the purchase rate after the promotional period.

Low rate vs standard rate cards

Card Type	Typical Purchase Rate	Annual Fee	Rewards
Low rate card	9.99%-13.99%	$0-$59	None or basic
Standard card	19.99%-21.99%	$0-$100	Some
Premium rewards card	20.99%-22.99%	$150-$450+	Extensive

Rates are illustrative and vary by provider.

If you carry a balance, a low rate card at 12% will save you hundreds or thousands per year compared to a premium card at 21% - regardless of how many reward points the premium card offers.

Step 3: Understand Interest-Free Days

Interest-free days are one of the most misunderstood features in credit cards. The advertised "up to 55 days interest-free" is the maximum - not the average.

How it actually works:

Interest-free days only apply to purchases (never cash advances).
They only apply if you paid your previous statement balance in full by the due date.
The actual interest-free period for any purchase depends on when in the billing cycle you make it. A purchase on Day 1 gets the maximum; a purchase on the last day gets almost none.
If you carry any balance, you lose interest-free days on ALL new purchases - not just the old debt.

For the full maths on why the advertised number is misleading, see Interest-Free Days: The Maths Most People Get Wrong.

Key takeaway: Interest-free days only benefit people who pay in full every month. If you carry a balance, this feature is worth zero.

Step 4: Check All the Fees

Credit card fees can significantly change the value proposition:

Fee Type	Typical Range	Who It Affects
Annual fee	$0-$450+	Everyone
Late payment fee	$20-$40	Balance carriers
Cash advance fee	$2-$5 or 2-3%	Cash users
Foreign transaction fee	0%-3%	Overseas spenders
Over-limit fee	$0-$40	Rarely charged now
Balance transfer fee	0%-3% of amount	Balance transferrers
Card replacement fee	$0-$15	Rare

Fee ranges are illustrative.

The annual fee trade-off

A $0 annual fee card with a 20% rate can be more expensive than a $200 annual fee card with a 12% rate - if you carry a balance. Conversely, a $200 annual fee rewards card is a bad deal if you never earn enough rewards to offset the fee.

The break-even calculation: divide the annual fee by the per-point value of the rewards program, then ask whether your spending will realistically generate enough points to cover it.

Step 5: Evaluate Rewards Honestly

Rewards programs are complex by design. Banks want you to feel like you're getting value, but the actual return is often modest.

Types of rewards

Points programs (Qantas, Velocity, Amex) - earn points per dollar spent, redeemable for flights, gift cards, or merchandise.
Cashback - earn a percentage back on purchases, credited to your account.
Store credits - earn discounts at specific retailers.

The real value of points

Most airline points programs deliver 0.5-1.0 cent per point when redeemed for flights. On a card earning 1 point per dollar spent, that's a 0.5-1.0% return. If the card has a $250 annual fee, you need to spend $25,000-$50,000 per year just to break even on the fee.

Reality check: If you spend $3,000/month and earn 1 point per dollar at 0.7 cents per point, your annual rewards value is approximately $252 - which barely covers a premium annual fee.

Rewards only make sense if you pay in full every month (avoiding interest), spend enough to offset the annual fee, and actually redeem the points before they expire.

Step 6: Balance Transfer Offers

Balance transfer promotions can save significant money if you have existing credit card debt - but they come with traps.

What to check:

Promotional rate - often 0%, but some offer low rates like 1.99-3.99%.
Promotional period - typically 6-24 months.
Balance transfer fee - usually 1-3% of the transferred amount, charged upfront.
Revert rate - what happens after the promotional period. This is often the standard purchase rate (20%+), which will eliminate any savings if you haven't paid off the balance.
New purchases - some cards charge interest on new purchases from Day 1 during the transfer period, even if you're paying minimums on the transferred balance.

Critical rule: Only use a balance transfer if you have a clear plan to pay off the full balance before the promotional period ends. Otherwise, you're just moving debt around.

Step 7: Check Foreign Transaction Fees

If you travel or shop online from overseas retailers, the foreign transaction fee matters more than you might think.

Most cards charge 2-3% on international transactions.
On a $5,000 overseas trip, that's $100-$150 in fees alone.
Some cards (particularly travel-focused cards) charge 0% foreign transaction fees.

A 0% foreign transaction fee card can save more on a single overseas trip than an entire year of rewards points on a domestic-only card.

Credit Card Comparison Checklist

Use this when evaluating any credit card:

Criteria	What to Check	Done
How you'll use it	Pay in full monthly, or carry a balance?	_
Purchase rate	Competitive for your usage pattern?	_
Annual fee	Worth it based on your spending level?	_
Interest-free days	How many? Will you actually benefit?	_
Rewards	Real value vs fee? Will you redeem them?	_
Foreign fees	0% or 2-3%? Do you travel or shop overseas?	_
Balance transfer	Rate, period, fee, revert rate?	_
Cash advance rate	Relevant if you'll ever withdraw cash?	_
Additional features	Insurance, concierge, lounge access?	_

Credit Cards Worth Comparing

Card	Purchase Rate	Annual Fee	Interest-Free Days	Balance Transfer
Westpac Lite CardWestpac	9.90%	$0	45 days	-
Business VantageSt. George Bank	9.99%	$55	55 days	-
Business VantageBank of Melbourne	9.99%	$55	55 days	-
VISA BusinessBankSA	9.99%	$55	55 days	-
Bankwest Breeze Classic MastercardBankwest	12.99%	$49	55 days	-

For rewards-focused options, see our full credit card comparison.

Common Mistakes When Comparing Credit Cards

1. Choosing based on rewards alone

Rewards are marketing tools. If you carry a balance even occasionally, the interest you pay will dwarf any points earned. Focus on rate first, rewards second.

2. Ignoring the annual fee in the value calculation

A $0 fee card with basic features can deliver better overall value than a $400 premium card if your spending doesn't generate enough rewards to justify the fee.

3. Assuming you'll always pay in full

Be honest about your payment history. If you've carried a balance in the past, assume you may again. A low rate card is a safer choice than a rewards card with a high rate.

4. Stacking balance transfers without a payoff plan

Transferring balances repeatedly without paying down the principal just accumulates transfer fees and delays the inevitable. Have a repayment plan before applying.

5. Overlooking foreign transaction fees

These are a hidden cost that adds up quickly for travellers and online shoppers. A few trips per year can cost more in foreign fees than you'd save from rewards.

For a comparison of credit cards vs buy now pay later or personal loans, see our dedicated guides.

The Bottom Line

The right credit card depends entirely on how you use it. If you pay in full every month, focus on rewards value minus the annual fee. If you carry a balance, the purchase rate is the only number that matters. And if you travel, foreign transaction fees can outweigh any other feature.

Start comparing with RatePilot's credit card comparison tool - filter by rate, fee, or rewards to find cards that match your spending pattern.

For a deeper look at how interest-free days actually work, see our guide on Credit Card Interest-Free Days.

This is general information, not financial advice. Consider your own circumstances before making financial decisions. Product information is sourced from RatePilot's database and is updated regularly. Rates, fees, and terms are subject to change - always confirm with the provider.