How to choose your first credit card

Choosing the right credit card can be a bit of a tricky task, especially if it’s your first card and you’re not sure what to look out for. Finding the right card for you depends on many different factors, so here are a few things to consider before committing to your new card.

What do you want to use your credit card for?

Choosing your first credit card can be a significant financial decision, and knowing what you want to use it for is the first step.

When choosing a credit card, it’s important to think carefully about both how you’ll use it, as well as your financial situation. Do you want to make your dollar go further by collecting rewards points? Do you just want the freedom of having credit when you need it? Or do you want to keep it in your wallet for emergencies?

Your need will help you nut out the type of card that will work best for you.

> Get help choosing a credit card

What should I consider?

There are several features to consider before choosing a credit card.

Understanding your credit limit

A credit limit is the maximum amount you can charge to your credit card. When you’re a first-time cardholder, your credit limit might be lower until you establish a good credit history.

It’s important to stay within your credit limit to avoid over-limit fees and any negative impacts on your credit score.

Not sure how credit scores work? Your score is a rating given by credit reporting agencies to determine the level of risk you might pose to a lender, based on your financial history. The higher the score, the less risky you’re deemed, and the more likely you are to be approved for credit.

You can check your own credit history by visiting creditsmart.org.au and following the links to access free credit reports.

Over time, with responsible use and timely repayments, you may be eligible for credit limit increases from your credit card issuer.

How interest is calculated

Interest is calculated daily based on your balance.

Each credit card has a different interest rate for different types of transactions, and many cards offer an interest-free period (for example 55 days) on purchases. This means if you pay your balance in full within this period, you won’t incur interest charges. If you don’t pay off your balance in full, you'll pay interest on the remaining amount.

Understanding interest rates when choosing a credit card is crucial because interest directly impacts how much you’ll pay in the long run, as well as the total cost of any balance you carry over time. 

Credit card fees

Credit cards can come with various fees, which can add to the cost of using the card.

These may include annual (or monthly) fees, late fees, fees for cash advances, balance transfers and foreign transactions.

A cash advance is when you use your credit card to withdraw cash from an ATM, transfer money from your credit card account to another account, and gambling and other cash equivalent transactions can attract a cash advance fee on top of the cash advance interest rate.

It’s important to understand these different types of fees and charges so you can avoid paying any unnecessary fees and take advantage of any fee-free periods or offers.

Our credit card comparison tool is a useful way to compare key details side by side for each card.

Different type of credit cards for first-timers

Westpac offers a range of credit cards, many of which are suitable for first-time users. Here are some types to consider and how their features may suit your needs.

Rewards credit cards

Westpac offers a range of rewards credit cards, including the Platinum and Black cards, that allow you to redeem points for gift cards, cashback or frequent flyer points with partner airlines. Westpac Altitude Rewards Qantas and Altitude Rewards Velocity cards allow you to earn either Qantas or Velocity points on purchases.

These cards may have higher annual fees and a higher credit card limit, but rewards cards could be beneficial if you plan to use your card on everyday purchases, or travel regularly.

> Explore Westpac rewards credit cards

Low rate credit cards

The Westpac Low Rate credit card has a low ongoing interest rate on purchases. This can be helpful if you don’t intend to pay off your balance in full each month.

It also includes a low ongoing annual card fee, which may help trim your credit card costs.

> Explore the Westpac Low Rate credit card

Low (or no) fee credit cards

The Westpac Low Fee credit card offers no annual fee (with minimum spend criteria) as long as you pay off your purchases by the monthly due date to avoid the higher interest rates.

This card may be suitable for first-timers who pay off their balance each month.

>Explore the Westpac low fee credit card

Additional benefits

Finally, consider any additional benefits that come with a new credit card. Eligible Westpac customers have the ability to split purchases over $100 into four payments, earn exclusive bonus Cashback offers, and of course, access Australia’s top banking app*.

Managing your card

Managing your credit card effectively is key to maintaining a good credit score and making the most of what your card has to offer. You could do this by always paying the minimum repayment by the due date, and to help achieve this think about setting up automatic payments in the Westpac App or Online Banking.

You might choose to use your credit card for everyday purchases to manage your cash flow better. You might like to maximise the interest-free period and avoid interest charges. Or you might only choose to use your card for purchases that earn reward points or cashback. It’s all about choosing – and then using – the right card for you.

To sum up

Whether you’re planning to use your first credit card for emergency spending or as part of a well-planned budget, be sure to carefully consider your needs, understand the different types of credit cards, and manage your card responsibly.