Finding the right Credit Card 4U depends on how you use your card. We have identified seven different types of credit card user. Please click on the description that best fits with your planned or actual use of credit cards and follow the corresponding advice accordingly.

 

The 0% Surfer

The 0% surfer has an existing balance on one or more credit cards and prefers to make balance transfers to take advantage of low-rate offers.

 

The Interesting

The Interesting card user makes use of a credit limit and tends to carry a balance on their credit card most of the time.

 

The Monthly Revolver

The Monthly Revolver uses a credit card to pay for the majority of their purchases, and generally pays off most of the balance at the end of the month.

 

The Big Spender

The Big Spender spends over $100K per year on a credit card and is trusted to clear large balances at the end of each month or at an agreed time.

 

The Traveller

The Traveller makes regular trips overseas, spending in different currencies each year, and pays off the credit card expenses very soon after return.

 

The Poor Credit History / First Timer

…is either new to credit, or has had difficulties meeting agreed credit card repayments in the past.

 

The Backup User

The Backup User keeps a credit card as a spare or emergency form of payment, and only uses it occasionally.

 

The 0% Surfer [= Balance Transfer Credit Card]

When trying to pay off your credit cards, balance transfers help you reduce your balance at low rates of interest. You are looking for the best balance transfer rate together with the lowest fee. Fees are added to the new card balance and do not have to be paid up-front. It is recommended that you pay the maximum you can afford each month to exploit the low interest while it lasts.

If you have not cleared your balance by the end of the introductory balance transfer period, you can either revert to the standard rate of interest with the existing creditor, which tends to be much higher (typically 12%-20%), or apply for another balance transfer elsewhere (which may incur another fee).

If handled correctly, 0% surfing can be the cheapest and least risky way of reducing debts. Compared to the cost of personal loans, 0% surfing is a very attractive solution!

 

The Interesting [= Low Rate Credit Card]

To avoid paying over the odds in interest charges, the best option for you is to find a low rate credit card that keeps interest payments manageable for a constant debt balance.

Designated low rate credit cards could help to reduce the amount paid in interest by up to 10% on other credit card types.

 

The Monthly Revolver [= Reward Credit Card / 0% Purchases Credit Card]

You could benefit from cards that offer rewards for your spending. Credit card companies offer some very attractive incentives, such as reward points and air-miles, to reward spending. Reward credit cards are tailored towards different consumers – retail shoppers, travellers, commuters – so cards can fulfil your reward preferences.

By ensuring that you pay off the card balance, you will enjoy the maximum benefit of the rewards while avoiding the higher interest. Many cards offer protection from fraudulent internet sites or guarantees on purchases, which protects your spending.

If you wish to spread the cost of your purchases over a longer period of time, you might consider a credit card that offers a 0% period on purchases.

 

The Big Spender [= Gold & Platinum Credit Card / Business Credit Card]

If you require a large credit limit then you may benefit from a gold or platinum credit card. These credit cards offer credit up to $100,000, though this is usually subject to the applicant’s annual salary. Big spenders can benefit from the series of complimentary incentives available from gold or platinum credit cards, which might include travel insurance, warranties, and concierge services.

Alternatively, big spenders, like The Monthly Revolver, can benefit from the big rewards available through reward credit cards.

Business owners and managers could benefit from business credit cards which are an efficient way of handling and monitoring expenses.

 

The Traveller [= Airmiles Credit Card]

Large quantities of cash can be risky to carry when travelling, making credit cards the ideal travelling companion. The majority of shops and restaurants across the world now accept both MasterCard and Visa, and the exchange rates imposed by credit card companies are usually an improvement on airport rates.

Some credit cards do charge a commission fee on foreign purchases, so make sure that you check for details before making your decision.

A great way to reduce your travel costs would be to apply for an air-miles credit card, which could contribute towards future flights. However, you should still be aware of potential commission charges, which could negate your rewards.

 

The Poor Credit History / First Timer [= Bad Credit Card / Credit Builder Card]

After receiving an application, credit card providers consult records held by credit reference agencies to see if you meet their criteria. If you have missed payments, defaulted, or were made bankrupt within the last five years, this information will be recorded.

Having no credit history, meanwhile, can prove as detrimental as having a bad credit history. Without a credit profile, it is difficult for the lender to assess the risks involved in lending to you.

However, both of these problems can be solved by building, or improving, a credit record. We list credit history cards that can help. These charge much much more in interest to account for the extra risk. By ensuring that your card use is responsible and that your balance is paid off in full by the end of each billing period, your interest payments will be minimal and you will accrue (or restore) a strong credit history to allow more credit options in the future.

 

The Backup User [= No Annual Fee Credit Card]

Someone who only uses a credit card as a backup form of payment, and does not stand to gain massively from the different types of credit card offers could benefit from a no annual fee credit card, which costs nothing to own. Applicants should note, however, that some credit card providers make free ownership conditional on a certain level of spending.