What is a credit card?

A credit card in Australia is a payment instrument that lets the holder borrow money up to a pre-approved limit to make purchases or withdraw cash, with the borrowed amount repayable to the card issuer at the end of each statement period. Credit cards are issued by banks and other Authorised Deposit-taking Institutions and operate on the Visa, Mastercard, or American Express networks.

Credit cards typically have an annual fee (often from zero to several hundred dollars), an annual interest rate (typically 14 to 23 per cent on purchases, higher on cash advances), and an interest-free period that applies if the full balance is paid by the due date each month (usually up to 55 days from the start of the statement period). Many cards offer rewards points, frequent flyer miles, complimentary travel insurance, or cashback on purchases.

Credit cards are regulated under the National Consumer Credit Protection Act 2009 and supervised by ASIC. Issuers must conduct a responsible-lending assessment before approving a card and must check the applicant's ability to repay the credit limit within three years. The Reform Banking Code of Practice and the Credit Card Reforms Act 2018 introduced positive credit reporting (so good repayment history shows up alongside defaults), tighter limits on unilateral credit limit increases, and clearer disclosure of minimum repayments and total cost.

Credit card debt has fallen sharply since the mid-2010s as more Australians use buy-now-pay-later services like Afterpay and Zip alongside debit cards. Total credit card balances accruing interest were about 20.2 billion dollars in 2024, down from a peak of 36.6 billion dollars in 2017. Customers who fall behind on credit card payments can seek free help from the National Debt Helpline (1800 007 007) or a financial counsellor through Financial Counselling Australia. Lost or stolen cards should be reported immediately to the issuer to limit liability for unauthorised use, capped under the ePayments Code at 150 dollars in most cases.