Which type of credit card should I apply for?
We choose credit cards for many different reasons. As there are so many to choose from, it's important to work out which one suits you. The best thing to do is to think about how you will use your credit card and what features you are looking for, the costs that come with it like the annual fee and the interest rates, and your financial situation.
Start by thinking about what you want to use your credit card for. Will it be used to buy things online, go on a holiday, pay for bills? Maybe you need a credit card to spread the cost of a purchase over a timeframe that suits you (minimum repayments apply).
However you choose to use your card, you'll also need to consider whether you will be paying off what you owe every month, or spreading repayments over a period of time. If you will be paying the balance off each month, then you could take advantage of the interest free period. In this case, a credit card with a rewards programs, might be more beneficial than a lower interest rate.
Credit cards with reward programs like cashback or airline reward programs usually have a higher annual fee. So you need to consider the benefits and value you get from these credit card along with the annual fee and interest rate these rewards credit cards can attract. Rewards credit cards can also come with higher credit limit requirements than low rate or low fee credit cards, so consider your financial situation and if you are after a higher limit for your needs.
If you choose not to pay off the balance each month, you will be paying interest. And one way to save on interest repayments is to choose a credit card with a lower interest rate and a low annual fee.
A credit card can be a powerful tool to have in your overall financial toolkit. A credit card can be great for travelling and can help your budget go further with good management. Some credit cards come with complimentary travel extras like international travel insurance (Usually you will need to purchase your flights or accommodation on the credit card, with a minimum amount spent to get it). An added bonus is the international transaction fees are rebated for eligible customers, which can really add up when you're shopping or paying for restaurants and hotels while overseas.
Here's a check list of some of the attributes you should consider when deciding if a credit card is appropriate:
Interest rate on purchases - This is the cost of borrowing money on a credit card , if you don't pay the whole balance off each month. You can compare the standard interest rate for different cards which will help you to choose the lowest. You should also compare other things about the card, for example fees, charges and benefits
Annual fee - Some credit cards charge an annual fee for the credit card. The fee is added to the amount due and you will have to pay interest on the fee as well as on your spending, unless you pay it in full by the due date
Instalment plans - If you don't want to pay off amounts owing in one hit, instalment plans allow you to 'lock in' a lower interest rate than the standard interest rate on purchases and pay it off in fixed monthly instalment payments.
Minimum repayment - If you don't pay off the balance each month, you will be required repay a minimum amount
International transaction fees - when you purchase overseas or online. Usually 3-5% of the purchase amount. Some credit cards waive this fee like ING, for eligible customers.
Complimentary travel insurance - when you purchase your flights and accommodation on your credit card
Cashback - This is where you get cash back on your spend. With ING's Rewards Platinum credit card you'll earn up to $30 per month on your spend.
Interest free days - Interest-free days on credit cards are a set number of days in which you generally won't be charged any interest. You won't be charged interest on purchases provided you pay off the Amount Due on your previous statement in full by its Due Date. Make sure you read your credit card statement carefully.
ING offers both a low rate credit card with no annual fee and a rewards platinum credit card with cashback rewards and complimentary travel insurance. Compare our credit cards and work out which one is best for you.