Hi All,
I am a newbie to grown up life (19, m) and the use of credit cards. I always see cash back rewards for the use of American Express cards on the front page of Ozbargain and think it is time to get involved..
Can someone recommend the best credit card (doesn’t necessarily need to be Am Ex) for a young adult who still lives at home and simply wants to take advantage of the cash-back/point gaining offers on casual purchases?
Thanks in advance,
Thanks for the tips! I hadn't considered getting multiple cards for different purposes, but that makes perfect sense. Ill have
a look into them
Mate, very curious to know why you recommend BankWest platinum for online purchase?
I did a quick search on BankWest platinum here in Ozbargain but mostly are for overseas transaction (which is also helpful information because I will in Japan for 10 days for vacation)?
sorry i guess when i meant 'online purchases', i meant overseas online purchases (geekbuying, aliexpress, gearbest etc).
My CBA card gets hit with for-ex fees while the Bankwest one doesn't. These days i mostly use it for Gearbest.com but I've traveled with it to Singapore and using the local currency with it has been very good.
Also very good advice, if you ever travel with it in a foreign currency country - when using their local eftpos/card machines - opt for 'local currency', not card currency. Massive difference between the two.
Thanks for the info. :)
I just wondering does overseas online purchase include Amazon?
I've recently bought 128gb SD card from Amazon and plan to buy more stuff…
Great tip with the local currency !!
I recommend getting a no fee credit card - you have then instantly saved ~ $25-50 per year :)
Also I recommend using a credit card ONLY IF NECESSARY as many peeps get caught out over spending with credit card and then paying massive monthly interest fees, which is destructive :/ . ALWAYS pay the TOTAL amount on your credit card statement each month to avoid paying interest.
Okay - thanks for the tip! Yes i was wondering how the "no fee" credit card companies are actually making money - this is the answer ….. cheers!
All credit cards charge the merchant a fee.
A fee to the card holder helps offset the cost of their rewards schemes.
Also agree with barbarella, you need to be disciplined. If you can't pay it off completely when due, then cut it up.
If harvesting credit cards didn't (apparently) reduce your credit rating then sign-up bonuses would be the easiest money.
But since July 1, where the RBA has restricted the transaction fees that card companies can charge merchants, it's nonsensical for low-spending people to pay membership fees for rewards unless they're exploiting the card-issuers for a non-monetary feature (e.g. travel insurance). The fact that a lot of merchants now charge fees for these cards make the endeavor double pointless.
I think AMEX is fine for a first card. It has a great perks (statement credits, purchase protection, points, etc) and has no fee cards available: https://www.americanexpress.com/au/content/credit-cards/no-a…
Not everywhere accepts it but you probably shouldn't be using your first credit card everywhere anyway. For the few places that don't, just use your debit card instead.
The Qantas American Express looks good … gain points, take advantage of the cash back offers and hopefully one day I can use the points on a flight upgrade to Europe ;p Thanks!
I would almost recommend staying away from Amex until you're in a position to take advantage of one of the big signup offers. Otherwise you'll have to cancel your card and wait 18 months before you can get one. The Coles Rewards Mastercard might be worth looking into as a general-purpose card, but bear in mind you need to spend $9900 on it before you start getting ahead of the annual fee. Also you would have to shop at coles to turn the flybuys points into credit. S
(This is assuming you only convert to flybuys dollars and not transfer to etihad or velocity. At 2 flybuys points per $ and 2000 points per $10 credit works out as a 1% back.)
Maybe just apply for the BankWest Zero? If they approve you for $6000 or more you get the platinum which is no foreign transaction fee, and if they only approve you for the non-platinum well it's still a card you can use and build history with them, then apply for an increase after a year or so?
It's also worth thinking about getting a small limit for your first card, to make sure your spending habits don't take off. Paying interest is going to outweigh any benefit you get from points.
Thank you for the detailed input. I already have a 28 degrees card from the last time that I went overseas that was good for waiving international fees.
I am more looking into something that accumulates points and/or can be used in these "10$ cash back when you spend 30$" sort of deals .. Can you expand on these sign up bonuses? Is it a bonus amount of points if you spend a certain amount of $$ ?
Then in that case you would want an AMEX with a points-earning capability. My Westpac 55 Day Platinum Visa also has cashback offers but their offerings are pretty poor compared to AMEX.
The cashback (or in AMEX terms statement credit) is only for seelected stores though (not sure if you know that)
Accumulating points: Even if you fork over $400/year or more on the card's fee, the best you'll do is around 1.5 points per $ (when transferred to frequent flyer programs, which give the best value).
Unless you've got a business or something, and can put a large amount of spending through a business credit card (e.g., online businesses and their ad spend), you'll have a hard time accumulating enough points to offset the annual fee. The best price:annual fee ratio I'm aware of is the Coles Rewards Mastercard, at $99/year, and 2 FlyBuys points per $. If you redeem the points as credit off coles shops, it works out to 1% cashback i.e., you need to spend $9,900 before you've even made up the annual fee. (The numbers will be different if you transfer points to Velocity or whatever but I haven't run them.)
Many cards will offer a sign up bonus of the form "Spend $X in the first Y days/months to get Z points". These are usually pretty big bonuses because they want to get you into the habit of spending with their card, and spending more than you're used to (more money for them in fees that the merchant pays, and potentially in interest charges if they get you to mess up). Example: The Amex Explorer offers 100,000 Points if you spend $1,500 in the first 3 months of card ownership. If you have held any Amex-issued card (ones you get from the bank don't count) in the past 18 months, they won't let you have the bonus. So if you get a little Amex card for the bonuses you'll have to cancel it and wait for that period.
Some people apply for and cancel credit cards to get all the good sign up bonus, but I don't know if that's a good idea when you're starting out. You might need that credit history for other things, and it requires a lot of work tracking deadlines, spending targets, etc.
Some of the Amex cards offer freebies that offset or effectively cancel the annual fee - the $195/year Platinum Edge has a $200 travel credit, and the $395/year Explorer has a $400 travel credit. Nice if you can use it, but you have to spend it all at once on the Amex travel page, which means no cheap flights with Jetstar/Tiger/… This is work to track, and if you don't get around to using it you lose out. Again, I think this is too complex for your current needs.
That said, Amex is the only provider with frequent cashback offers - spend $X at a certain merchant to get $Y back. I've been on this site for about a year and haven't gotten a huge amount out of them. But if you're set on getting an Amex card now, there are three Amex cards that have no annual fee: the Amex Essential, Amex Velocity Escape and Amex Qantas Discovery. Only the Essential has a signup bonus: $50 credit after spending $750 in the first three months (it's $75 if you go through a referral link, so if you sign up for it, make sure you do that and make some other OzBargainer happy). But its earn rate is worse than the others: effectively 0.75 points per $ when you transfer to an airline program, and almost nobody can transfer into Qantas Frequent Flyer. If you're already loyal to an airline (which I doubt, especially at 19 when sale fares are going to be more appealing), it might be worth looking at the other two.
Overall, I can't imagine you moving enough cash through the cards to get a lot out of the Amex line at this time. My experience with the cash backs is that they don't give you a whole lot, and if you spend when you would not have otherwise bought that thing you lost.
You need to run some numbers on your income and spend (you may not even qualify for the high-fee cards) and then work out if the points are even going to be worthwhile for you. Also look back over the Amex statement credit offers posted here: many of them are for things that you won't even use.
My guess: you're probably going to get more out of buying WISH eGift cards at 5% off through CashRewards and using them at Woolworths Petrol stations than out of any fiddling you'll do with rewards cards, unless you're way more loaded than the average 19yo.
Damn son; +1 for the very extensive write-up
Wow this is the exact explaining I as looking for. I had no idea about the 18 month "cooling period". As you explained, this makes more sense to wait then immediately grab a no-fee card.
Its interesting to see that practically you haven't been able to take advantage of many cashback offers, I image it would be even less so for myself !!
Looks like its time to develop a spreadsheet and do some analysis based on your info (lucky I am a semi-nerdy engineering student and enjoy that :p )
Once again, thanks for the info and I appreciate your time, this is a lot more complex then first thought !! and im definitely not more loaded then the ave 19yo, the irresistible oz-bargain deals will be the end of me haha
@boxer155: I went over my transactions and found I'd used exactly one statement credit in the 12 months I've held this card.
If you're a nerdy engineering student and spreadsheet for fun, the calculations might work out in your favour.
no annual fee on the coles credit card (the lower one)
https://financialservices.coles.com.au/credit-cards/no-annua…
i think you confused it with the high end one.
this one;
NO annual fee. Ever.
Collect 1 point for every $2 you spend. Everywhere, every day. 1
$10 off your Coles supermarket shop instantly at the checkout every time you redeem 2,000 flybuys points.2
Free delivery at Coles online using your Coles Credit Card.3
Free Coles Mobile Wallet, lets you pay and collect flybuys points with your phone, while keeping track of your purchases for your convenience and control.
Coles Mastercard and flybuys card in one so you only have to carry one card instead of two.
Up to 62 days interest free on purchases when you pay your full balance off each month.4
19.99% on purchases and cash advances.
Superior Security and fraud protection – the Falcon™ fraud management system and our zero liability guarantee give you peace of mind.
Convenience of Mastercard PayPass - for amounts under $100, simply Tap & Go with your Coles Mastercard, or enter a PIN for amounts over $100.
Access your account easily online.
Additional cards available with one convenient statement.
Platinum No Annual Fee Mastercard with even more benefits if you’re approved for a certain credit limit.
Protected by the Coles Shield Coles Shield - protection against fraud
I think its a really decent card. I've got one but dont use it as my work gave me the macquarie black with no fees as an employee.
Credit cards are good, but avoid increasing your spending.
Absolutely. If you increase your spending to chase points or rewards, you lose the game.
ANZ FF black is best.you be silly to get AMEX with a large annual fee.
Disagree. You're paying a similar fee ($425) but without access to statement credits, travel credits and so on.
Noone keeps a card for more than a year. ANZ is fee free in first year.
Not sure I'd recommend that strategy to a 19yo on his first serious card.
@endgame: but you would instead recommend a 425 dollar fee just because it gets travel credits because that's what all 19 year olds are doing…
@Dont Care: Nah for OP I'd recommend the Bankwest Zero, but I'm saying in general that a $425 visa card with 1 point/$ and no credits is probably worse than a $400 amex card with statement/travel credits.
For casual purchases you'd probably want a no fee credit credit?
Amex is fine but i'd get an additional visa or mastercard as alot of small places don't take Amex or they charge a surcharge.
The Coles credit card is good and gives you flybuys points with no fees. Then for online purchase you could get the BankWest platinum if you'd like? depending on your credit profile.
Its always a good idea to keep an eye out on 'deals' and promos for credit card.
https://www.finder.com.au/credit-cards is a good site to compare if ya need.
let us know which one you end up going with!