A credit card comparison allows you to see all of your options side-by-side before you make a decision. This can help you find the card that best suits your needs based on your spending habits and budget, as well as any specific features or benefits you are interested in using.
Here, you can compare credit cards from a range of providers based on the features you want. We also walk you through the different types of credit cards available and important details to remember when comparing your options so that you can apply for one that meets your needs.
Different types of credit cards offer specific features and benefits that are designed to suit a variety of needs. When you know what you want from a credit card, you can narrow down your comparison to a few cards by using these categories. To help you do this, we have outlined the major credit card categories below:
Balance transfer cards
If you have an existing credit card debt, a balance transfer credit card can help you save on interest charges and pay off your debt faster by offering you a promotional low or 0% p.a. interest rate for an introductory period. After the promotional period has ended, any debt remaining from the transfer attracts a higher, standard interest rate.
To compare balance transfer credit cards, make sure you look at the length of the introductory period, the rate of interest applied to any remaining debt after that time and any one-off balance transfer fees that may apply. This will help you choose the right card and budget accordingly.
Rewards credit cards
These credit cards offer you rewards for every $1 spent on eligible purchases, including most everyday transactions. When you compare rewards credit cards, make sure you consider the type of rewards programme, the rewards you can redeem and the rate at which you earn rewards (usually points per $1 spend).
It is also important to compare the card’s interest rate, annual fee and complimentary extras, such as travel insurance or airport lounge passes. The goal with a rewards credit card should always be to get more value from the programme than you pay in fees, so make sure you consider the value of the rewards you will earn based on your average spending.
Airpoints credit cards
Some rewards credit cards are linked to Airpoints. These cards earn Airpoints per $1 spent on the card and may also offer other travel benefits such as complimentary insurance, flights or airport lounge access. As with other rewards credit cards, when you compare Airpoints cards, you need to look at the rewards programme available, the number of points you earn per $1 spent, the card fees and any complimentary extras to make sure it is worth it for you.
No annual fee credit cards
These credit cards have a $0 annual account fee, potentially saving you hundreds of dollars. Some no annual fee credit cards only offer a $0 fee for the first year you have a card, while others have no annual fee for life. Make sure you consider both of these options when you compare no annual fee cards, so you can choose one that offers the most convenient features and greatest savings for your circumstances.
Low interest credit cards
Low interest credit cards are designed to save you money on your balance by offering a competitive rate of interest. Some of these cards may offer a promotional low or 0% p.a. interest rate for purchases, while others offer a low ongoing interest rate. If you regularly carry a balance on your credit card, a low rate option could save you hundreds or even thousands of dollars every year.
How much can I save with a low rate card?
To see how much value a low rate card offers, let’s compare a $1,000 debt on a credit card with an interest rate of 18% p.a. and a card with a lower rate of 12% p.a. If you only paid the minimum, it would take 7 years and 9 months to pay off the 18% p.a. card and would cost $861 in interest. With the low rate card, it would take 5 years and 10 months and cost $393 in interest – that’s a saving of 1 year and 11 months and $468 in interest charges.
Student credit cards
If you are studying, you may want to get a credit card to help manage your finances or build up a credit history. As most students don’t earn a lot of money, student credit cards typically have lower minimum income requirements and lower credit limits. These cards offer basic features that can help you with cash flow and can be a good way to learn how credit cards work. If you are interested in getting a student credit card, make sure you consider the income requirements, credit limit and annual fees to find an option that is both flexible and affordable.
Business credit cards
Business credit cards offer specific features designed to make financial management easier across a company, such as additional credit cards for employees, individual pre-set spending limits and itemized statements. If you are comparing business credit cards, make sure to consider which extra features you need (including rewards programs) as well as the interest rates and fees so you choose an option that is affordable and convenient for your finance and accounting needs.
Travel credit cards
You can use almost any credit card when travelling but some cards come with specialised features and benefits to help you save you money on every trip. Depending on the card you choose, perks could include complimentary overseas insurance, domestic flights, inconvenience insurance, car hire coverage, Airpoints, hotel offers, airport lounge access and no foreign transaction fees. To compare travel credit cards, make sure you consider how often you will actually use these features, as well as the ongoing card costs, so that you can find one that offers value for money and covers your travel needs.
Gold, platinum and black credit cards
Gold, platinum and black credit cards are premium options designed for bigger spenders. They have higher credit limits and more additional benefits such as complimentary insurance, higher reward point earn rates and shopping and travel perks. It is important to check the minimum income requirements when comparing gold, platinum and black credit cards, as they are often higher than standard cards. Also, make sure you consider whether the benefits available outweigh the cost of interest charges and annual fees – both of which may be higher on a premium card.
Other credit cards
Most credit cards fall into one or more of the categories above. But if you are looking for a specific feature, you may also want to consider comparing credit cards listed in the following niche categories:
- CashBack credit cards. These type of credit cards reward you with cash back or a credit on your account when you meet specific spending requirements. Some CashBack credit cards offer a percentage back for each $1 you spend (similar to rewards credit cards), while others offer a fixed rate of cash back, usually as an introductory promotion.
- 0% p.a. foreign fees. These credit cards don’t charge a fee for transactions made in an international currency or with an overseas retailer, potentially saving you 2% to 3.5% per purchase.
- 0% p.a. purchase and balance transfer cards. Some credit cards offer 0% p.a. interest for both purchases and balance transfers. These cards allow you to save money on both old and new credit card debt for a limited amount of time before standard interest rates kick in.
- Credit cards with introductory offers. Many credit cards come with introductory offers, such as 0% p.a. interest, reduced or $0 annual fees and bonus points. These deals are designed to give you more value when you choose a particular card, but only in the short-term.
- Credit union credit cards. Credit cards provided by credit unions offer competitive value through lower rates, fees and other features.
- Debt consolidation credit cards. These balance transfer cards can provide you with an affordable option when you have several debts that you would like to combine and pay off on one account.
Regardless of the type of credit card you are looking for, it is important to consider a range of factors to find a card that is right for you. Here, we have outlined the key features you should look at when you compare credit cards.
Credit cards often come with promotional features for new customers that are designed to add upfront value to the card you choose. Some of the most popular introductory offers include:
- Bonus points
- 0% p.a. balance transfer interest rates
- 0% p.a. purchase rates
- Reduced or $0 annual fees in the first year
- Cashback, gift cards or flight vouchers
If you are comparing credit cards with introductory offers, make sure you look to check the ongoing features to get a true sense of the value the card will provide in the long term. Also look at the length of the introductory period and any other conditions you need to meet to claim the offer available. For example, a reward card offering bonus points might require you to spend a certain amount of money in the first few months you have it, while a balance transfer offer might only be available if you include your transfer request when you apply.
Credit cards offer a wide range of complimentary features and benefits that can add value to the card you choose. Some of the most popular options include:
- Travel insurance
- Airport lounge passes
- Flight and travel vouchers
- Concierge services
- Ticket and event offers
- Purchase protection insurance covers
These perks can add up to hundreds of dollars of extra value, but only if you use them. When you are looking at the complimentary extras during your credit card comparison, be realistic about whether or not you will get value from these features so they offset the cost of any fees.
If you want to earn rewards for your credit card spending, pay attention to the type of rewards program available. Some credit cards have their own rewards programs, such as BNZ Visa Platinum. Others are linked to existing programs, such as the ANZ Airpoints Visa Credit Card.
As well as deciding which rewards program you want, think about the amount of points you will need to redeem rewards; and how often you will use your credit card. This will help you choose a credit card with a rewards program that is right for you.
Rates and fees
When you compare credit cards, the rates and fees will help you work out the overall cost of each option. Here are the key features to look at:
Credit card annual fees can range from $0 (The ASB Visa Light) to up to $390 for prestige cards (Westpac Airpoints World Mastercard). This fee is usually charged when you first activate your account, then once a year on the anniversary of your account activation.
When you are comparing cards, think about what features will offset the cost of the annual fee so you can find one that is affordable for you. Remember some credit cards only offer a $0 or lower annual fee in the first year, so check the long-term features of the cards you compare to avoid any nasty surprises after the first year.
This is the interest rate that is charged for most of the transactions you make using your credit card. Standard purchase rates range from around 13% p.a. to 21% p.a. (variable) depending on the card you choose. If you regularly pay your balance in full, the purchase rate may not be of major concern, but if you think will carry a balance then choosing a card with a lower interest rate will help keep the cost down.
If you pay your balance in full each month, you can usually receive a certain number of interest-free days on purchases during each statement period. This can help you to avoid interest charges during your statement period. Usually, interest-free credit cards will offer somewhere between 25 and 62 days on new purchases.
If you plan to pay off the balance in full for every statement cycle, the number of interest-free days available could be an important factor for your credit card comparison. However, remember this feature won’t be much use if you carry a balance.
This interest rate is applied to “cash advance transactions” including ATM withdrawals, foreign currency exchange, bets and other gambling charges. It is usually around 19% p.a. to 22% p.a. (variable) and applies from the time you make a cash advance transaction. While it is a good idea to avoid making cash advances with a credit card, it is important to consider this factor in your comparison so that you know what the potential costs will be for these types of transactions.
As well as applying interest to cash advance transactions, credit cards charge a one-off fee on cash withdrawals etc. This is usually around 2% to 3.5% of the total transaction cost, so make sure to check this out before you get a card or use it for a cash advance. As with the cash advance interest rate, it is a good idea to check this fee when comparing cards so you are aware of the cost of cash advances for any option you choose.
The balance transfer interest rate applies to debts you have moved from old accounts onto your new card. Usually, a low or 0% p.a. promotional rate is offered when you transfer your balance onto a new card. When the promotional period ends, a higher, standard balance transfer rate applies. It is important to check both the introductory rate and the standard rate when you are comparing balance transfer credit cards so that you are aware of the costs that may apply over the short-term and the long-term.
Balance transfer fees
Some credit cards charge a one-off processing fee for balance transfers. This fee could be between 1% and 3% of the total debt you want to move to a new card. As not all cards apply this charge, it is an important consideration when comparing balance transfer offers to make sure you find an option that is affordable for you.
- International transaction fee
Most credit cards apply a fee for transactions made in a foreign currency or with an overseas merchant. This fee usually adds 2% to 3.5% to an international transaction. If you plan to travel with a credit card or want to use one to shop online with overseas retailers, it is a good idea to look at cards that waive this cost or at least have a lower fee than other options you are considering.
Some credit card companies charge you a fee if you don’t make a payment by the due date on your statement. The average charge for this in New Zealand is $12 and will be added to your account balance if your payment is late. While you should always aim to pay your credit card off by the due date, checking this fee when you are comparing credit cards can give you an idea of how each option treats late payments and you may want to factor this into your final decision.
If you max out your credit card, you could be charged a fee of around $3 to $20. It is important to consider this cost when comparing different cards so that you know what penalties could apply for different options. It may also help you decide on a sensible credit limit when you apply.
Credit cards may charge a range of other fees for different features and services, including:
- Additional cardholder fees
- Printed statement fees
- Emergency card replacement
Make sure you consider these charges when they could apply so that you know what other potential costs you may have to pay for any card you choose.
From low rate and balance transfer options to rewards credit cards, super-premium platinum and black cards or those with no fees, there are credit cards available to suit almost anyone’s needs. Now that you understand more about the different factors that need to be considered, you can start comparing credit cards and apply for one that really works for you.Compare cards and apply securelyPictures: Getty Images