Where Most People Get Stuck
The Reserve Bank's own figures tell a familiar story. Total credit card debt sits around $43 billion across roughly 12 million accounts, with the average balance hovering near $3,540. Here's the part that stings: the average purchase interest rate still clears 18%, which means a balance that gets carried month to month quietly erodes whatever rewards the card was earning in the first place.
The mismatch usually falls into one of three patterns. Rewards card users who carry a balance are paying more in interest than they'll ever claw back in points. Low-rate card holders who never carry a balance are giving up perks they could get for the same annual fee. And balance transfer chasers often get caught by the revert rate once the promotional window closes, landing on a purchase rate that's higher than their old card.
Shopping around matters more than brand loyalty here. The Big Four banks — CommBank, Westpac, ANZ and NAB — all carry flagship cards at roughly 20.99% p.a. on purchases, and several have announced rate and fee changes taking effect from late September and October 2026. So a card that looked sensible in June may not look as good by summer.
The Four Card Types Worth Knowing
Low-rate cards make sense if you sometimes carry a balance. NAB's Low Rate Card runs a 13.49% p.a. purchase rate with a $99 annual fee and up to 55 interest-free days, plus complimentary mobile phone insurance. That's the lowest ongoing purchase rate among the big banks, and it beats paying 20%+ on a rewards card while trying to clear debt.
Balance transfer cards exist for one job: moving existing debt onto a 0% window so your repayments actually dent the principal. ANZ Low Rate currently offers 0% on balance transfers for 26 months with a 3% transfer fee, and its 13.74% ongoing purchase rate stays reasonable after the promo ends. The catch is discipline — whatever you don't clear before the window closes reverts to the standard rate, which can jump above 20%.
Rewards and frequent flyer cards earn points per dollar on eligible spend, usually 1 to 2 points per dollar before any per-statement caps. Westpac's Altitude Qantas range pays up to 1.2 Qantas Points per dollar, with bonus earn rates on Woolworths and BP purchases. ANZ Rewards Black charges a $375 annual fee for uncapped flexible rewards plus complimentary insurances, while entry-level rewards tiers sit under $100 a year. If you clear your balance monthly, this category pays for itself through points and perks. If you don't, it's a donation to the bank.
Cashback cards skip points altogether and hand money back. The ANZ Platinum cashback offer credits $450 back when you spend $4,500 in the first four months, with no annual fee in year one and $87 p.a. after that. Westpac's Low Rate Cashback offer gives $75 back each month for six months when you spend $1,000 or more, adding up to $450, with the $84 fee waived in year one for existing customers. These suit people who want a predictable return rather than points they may never redeem.
A Quick Comparison Table
| Card Type | Example Product | Annual Fee | Purchase Rate | Best For | Trade-offs |
|---|
| Low Rate | NAB Low Rate Card | $99 | 13.49% p.a. | People who sometimes carry a balance | No rewards points earned |
| Balance Transfer | ANZ Low Rate (BT offer) | Low ongoing fee | 13.74% p.a. after promo | Clearing existing debt faster | 3% transfer fee, high revert rate |
| Rewards | ANZ Rewards Black | $375 | 20.99% p.a. | Frequent spenders who pay in full | High fee, interest traps for balances |
| Frequent Flyer | Westpac Altitude Qantas | Varies by tier | Around 20.99% p.a. | Regular flyers using Qantas Points | Points caps, insurance exclusions |
| Cashback | ANZ Platinum / Westpac Low Rate Cashback | $0 year one, then moderate | Standard variable | Predictable dollar-for-dollar return | Spend thresholds to unlock offers |
How to Choose Based on Your Own Spending
Start with one honest question: do you pay your statement in full every month? If the answer is no, a low-rate or balance transfer card beats any rewards program. Interest at 13.49% instead of 20.99% on a carried balance saves real money every single month, and that saving dwarfs a few thousand points.
If you do pay in full, work out what you'd genuinely use. A Sydney professional flying to Melbourne every few weeks might value Qantas Points and lounge access more than cashback. A family in Brisbane with grocery and utility bills spread across several cards might prefer the simplicity of one cashback card with a single annual fee. Either way, the 2026 rule of thumb from industry analysts holds: pick the card that pays back on how you already spend, and skip sign-up bonuses that force you to inflate your spending to unlock them.
The fees deserve a second look too. The average Australian credit card carries a $155 annual fee, and premium rewards cards run from around $96 up to $420. If you're earning points you never redeem — and the data suggests many people don't — you're paying for nothing. A no-frills low-fee card from ANZ or NAB starts with an annual fee in the tens of dollars and does the same job for everyday purchases.
Before You Apply
- Check the effective date of any rate changes. Several major banks are adjusting purchase rates, cash advance fees and points caps in late September and October 2026. Confirm the numbers on the bank's own product page, not a comparison site that hasn't refreshed.
- Read the PDS on insurance perks. Complimentary travel insurance on rewards cards often excludes pre-existing conditions and requires activation. Treat it as a bonus, not a replacement for proper cover.
- Use a comparison tool with current data. Money.com.au and Canstar both maintain updated tables across 40-plus providers, and they flag promotional windows and revert rates clearly.
- Time your applications. A balance transfer makes most sense right after a big purchase season, when the debt is fresh and the 0% window has maximum runway.
One last thing worth remembering: credit card statistics show interest is only charged on a fraction of total balances, which means most Australians already use their cards sensibly. The ones who struggle are usually the ones who chose a card for its headline offer instead of its ongoing behaviour. Choose the boring card that fits your habits, and the rewards — or the savings — take care of themselves.
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