Types of credit cards

Credit cards can be a convenient way to pay for a range of things. If you're looking to apply for your first credit card or just having a browse, a good understanding of all the different types of credit cards will help you make the best decision. 

Low rate card

A low rate credit card typically offers a lower interest rate on purchases. These types of credit cards can be useful if you think you may have to carry a balance from one month to another. While these cards have a lower interest rate, there may be an annual fee you need to account for.

Reward card

Some credit cards offer cashback or other rewards for everyday spending, like points to spend on flights or shopping vouchers. This can sometimes be available for a wide variety of transactions on the card, or targeted towards a specific type of spend (e.g. household bills) but offering a more generous rate of reward. 

Explore more: Credit card rewards explained

0% purchase card

Some cards offer periods of charging 0% interest on purchases. These can be useful if you plan to buy a big ticket item and pay for it upfront, giving you a fixed period of time to repay without being charged interest. 

Balance transfer card

Some cards offer 0% interest for a fixed time period for balance transfers from other cards. These allow you to transfer existing debt from different credit cards for a small percentage fee of the amount you're transferring. This can be helpful if you will pay less interest/fees overall than keeping any debt on your existing card/s. 

Explore more: What is a balance transfer?

Credit builder card

If you have little or no credit history then these cards can help you build your credit history. Interest rates may be higher than other types of cards, but you can avoid interest as long as you pay off your balance in full each month.

What next?

Taking out a credit card is a big decision and it’s important to be sure you’re aware of all the benefits and trade-offs of the cards you’re interested in. If you’re not sure a credit card is right for you, a personal loan may suit by providing you with structured repayments over a set period of time.