1. Find a card that suits your needs
Different types of credit cards have different benefits, and may be better suited to different patterns of spending and repaying. Broadly, credit cards can be grouped into three categories:
- Interest-free: May best suit those who are new to credit and want more control over their finances. Interest-free cards generally offer a simple monthly fee based on the card limit, so there are no complex fees and pricing structures
- Low fee: May best suit those who are confident they’ll regularly pay off their balance in full, as low-fee cards can attract higher interest rates than some other card types
- Low rate: May best suit those who carry a balance over from month to month, and want to minimise the amount of interest paid on purchases. Low-rate cards have a higher annual fee than some other card types
- Awards: May best suit those who intend to pay off their balance in full each month and who want to make the most of their credit card spending by earning awards points that can be redeemed for reward items, including gift cards, electronics, in-store purchases and cash back. Awards cards attract higher interest rates and annual fees than some other card types
You can use our credit card finder tool to help find a CommBank card that will suit you.
2. Know your monthly spending limits
You’ll want to avoid overspending and getting yourself into debt beyond your means. Before applying for a credit card, use our budget planner to assess how much disposable income you have each month that could be used to repay a credit card. Our credit card repayment calculator can help you figure out how long it would take to pay back your balance, based on what you can afford to pay.
Each month, you can choose to repay just your minimum due payment, your full balance each month, or any amount in between. The more you pay off, the less interest you'll be charged.
3. Understand how interest is calculated
Each credit card has different interest rates for different types of transactions, such as regular purchases, balance transfers and cash advances.
The interest rate you’ll often see in advertising is the purchase interest rate. This is the rate you’ll be charged on purchases if you don’t pay your balance in full by the monthly payment due date (i.e. the due date on your statement each month).
Many credit cards come with an interest-free period, meaning you won’t be charged any interest on purchases you make during that period, as long as you pay your closing balance in full by the due date every month. Interest-free cards don’t incur interest charges, but may incur monthly or annual fees.
4. Understand fees and charges
Most credit cards include other charges in addition to the payable interest.
For example, late fees may be charged if you don't make your minimum repayment by the monthly due date. You can avoid late fees by making sure you pay at least your minimum repayment amount. If you withdraw money from your credit card, you may need to pay a cash advance fee (alongside the interest charged on that advance). Check our standard fees and charges for credit card services.
5. Maximise the benefits
From complimentary international travel insurance to emergency assistance and extended warranty on purchases, there's a range of benefits that may be included with a credit card. Different card types have different benefits, so check the card you’re interested in to see if it has the benefits you’re after.
Remember, cards with lots of perks are likely to have higher annual fees and interest rates than other card types.