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credit-building

Choosing Your First Credit Card in Australia

By PointsExplainedLast reviewed

Decide how you'll use the card

Pay in full every month, carry a balance sometimes, or chase rewards? Your answer decides which costs matter most.

Compare rates and fees

Compare the purchase rate, annual fee and other fees on each card's Key Facts Sheet.

Check interest-free days and reward rules

Interest-free days only help if you pay the full balance by the due date. For rewards, check earn rates, caps and expiry.

Set a limit you can afford

Ask for the limit you actually need rather than the maximum offered.

Plan how you'll pay it off

Set up a direct debit or reminder so you never miss a due date.

Where this comes from

Sources

The documents this guide relies on. If one has changed since we read it, the document is right and this guide is out of date.

  1. Moneysmart (ASIC) glossary: credit card

    A credit card gives you access to money the bank has agreed to lend you.

    moneysmart.gov.au · Accessed
  2. Moneysmart (ASIC): Credit cards

    If you don't pay off your balance on time, interest and fees can add up quickly.

    moneysmart.gov.au · Accessed
  3. Moneysmart (ASIC): Choosing a credit card

    Three usage patterns and matching card types; limit based on ability to repay within three years; you don't have to take the full limit; list of costs to compare; 'complimentary' extras usually not free; applications added to credit report; ready-to-apply checklist; new card may not suit people struggling with bills.

    moneysmart.gov.au · Accessed
  4. ASIC Report 788: Credit card lending in Australia: Staying in control (July 2024)

    Responsible lending test (three years) since 1 January 2019; ban on unsolicited credit limit increase offers since 1 July 2018; right to reduce limit or cancel online for contracts after 1 January 2019, and the provider must not suggest something contrary and must take reasonable steps to deal with it as soon as possible (pp. 41-43).

    download.asic.gov.au · Accessed
  5. ASIC media release 18-257MR: ASIC prescribes three-year period for credit card responsible lending assessments

    Three-year period applies to new credit card contracts and credit limit increases; ASIC prescribed the period.

    asic.gov.au · Accessed
  6. Moneysmart (ASIC): Loan rejection

    Lenders look at credit report, income, expenses and debts; must decline if the assessment shows hardship; must tell you if rejection was due to your credit report.

    moneysmart.gov.au · Accessed
  7. Australian Banking Association: Banking Code of Practice (effective 28 February 2025)

    Paragraph 156: you can tell the bank your preferred limit and it won't give you more than you requested; transactions may still exceed the limit. Code adopted by ABA member banks with a retail presence.

    ausbanking.org.au · Accessed
  8. ASIC Report 580: Credit card lending in Australia (July 2018)

    Key Facts Sheet: one-page document in a format prescribed by the National Credit Regulations and its contents; providers must give consumers a Key Facts Sheet (para 87); intended to allow consumers to compare cards more easily in a standardised form (para 345).

    download.asic.gov.au · Accessed
  9. OAIC: Access your credit report

    Free credit report copy if refused credit within the past 90 days.

    oaic.gov.au · Accessed
Questions

About this guide

How do lenders decide my credit limit?

Since 1 January 2019, lenders must not give you a credit card limit that you couldn't repay within three years. They assess your credit report, income, expenses and other debts.

Can I ask for a lower limit than I'm offered?

Yes. Moneysmart says you don't have to take the full amount. Banks that follow the Banking Code of Practice commit not to give you a limit higher than the one you ask for.

Will applying for several cards hurt my credit score?

It can. Each application is added to your credit report, and several in a short period can harm your score. Apply only for the card you intend to use.

Can I cancel a credit card online?

For contracts entered into after 1 January 2019, providers must give you a way to cancel or reduce your limit online, and must not suggest something contrary to your request.
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