What if I told you, you could fly around the world in business class, staying in five star hotels, all for free. This is something everyday Australians do all the time and it involves credit cards. You may have heard of the phrasing credit card churning. In short credit card churning involves applying for new credit cards that offer a sign-up bonus, and then using that signup bonus to pay for your airline fares and your accommodation. In most cases, all that’s involved in doing this is applying for the credit card; meeting a minimum spend; and then the points are credited to your account. Simple! However, there lies the problem for a lot of people like me a few years ago, when I went to apply for some of these cards that offered the amazing signup bonuses, the eligibility criteria was way outside of where I was at the moment, but that doesn’t mean the opportunities weren’t out there.
So today I’m going to share with you exactly what I found. These are the best five credit cards I could find for anyone looking to get started in the credit card churning movement that have no annual fee. Now, before we get into the specifics of each card, I just wanted to preface that in order for this to actually be effective and be worthwhile financially for you, you need to have a deep respect for the damaging nature credit cards can have, and that they do have on most consumers. When used incorrectly credit cards can stunt your wealth growth by years and can sometimes have you paying them back for decades. Don’t believe me? Here’s an example. Let’s say you have $15,000 in credit card debt at an 18% interest rate. If you were to only pay the minimum repayments on that, which is all that’s required for most credit cards, it will take you 50 years and three months to pay that off.
Now, the timeline in and of itself is insane, but listen to this. Over that 50 years, you won’t only pay back the $15,000 in debt that you had, but you will also pay $40,483 in interest alone. So in order to avoid paying any fees at all, this is what I recommend you do. And this is exactly what I do each month with my credit card. You’ll put your normal expenses on the card, always keeping in mind the amount of money that you have in your debit account. So you’re never using more than you actually have open up a spare savings account within your bank that you hold your debit account with. And every time you’ve make a transaction on your credit card transfer the amount that you spent on the credit card from your personal account, into that separate spare account, that savings account that you opened up.
Then at the end of the month, when you get your bill for your credit card, you transfer over the exact amount, eliminating the balance means you don’t pay anything in interest and your worry free with this strategy and a little bit of self discipline. You could take advantage of all of the rewards and benefits that come with credit cards without attaching the negatives.
Okay, now that we’ve got that out of the way, let’s go over the cards.
5. Virgin money, no annual fee card
Number five, the Virgin money, no annual fee card. Now this car doesn’t have the fancy bells and whistles of some of the other cards, but it’s one of the best cards you can have as a beginner. You’ve got access to fraud shield, which is an around the clock service that if Virgin money pick up any dodgy transactions, they’ll notify you immediately and make sure that you won’t be liable in the event you are the victim of fraud.
Eligibility
Now the eligibility criteria for this card that you’re over the age of 18, a permanent Australian resident have a minimum income of $25,000 a year and have a good credit rating number.
4. St. George bank, no annual fee card
Again, this card doesn’t have too many bells and whistles. However, with this card, you can also add three additional card holders at no extra cost. This card also includes fraud protection and another benefit.
Eligibility
The only requests that you have a regular verifiable income, no minimum amount listed here as for the eligibility criteria. Again, you’re over the age of 18, you’re an Australian citizen or on a permanent residency visa, and you have a residential address in Australia.
3. American express essential credit card
Number three, it’s getting a little bit more interesting. Now in this position, we have the American express essential credit card, as it says it on the website, this one has great benefits and no annual fee like the previous two cards.
This card also has for protection and no annual fee, but for a smartphone paid in full by the card, or have the monthly payments put on this card, you actually get $500 worth of screen repair credit every year. Not only that the ability to earn 1.25 membership reward points on every $1 spent and keep in mind, these points can be redeemed to nine of their airline partner reward programs. Otherwise you could use the points online at American express travel or Webjet. You could use your points at David Jones. You could use your points to purchase gift cards, transfer them to cash, to use for eligible purchases on the card, or use them for experiences with Ticketmaster. But you also so get access to their buyer’s advantage, purchase protection and refund protection. Now it isn’t the end of the world, but they do actually have a minimum annual income for this particular card of $40,000.
Eligibility
Other than that, it’s having no bad history of bad debt or payment default being an Australian citizen, a permanent resident, or a long-term visa holder, agreeing to access your statements online and being over the age of 18.
2. Citi simplicity credit card
Now for number two, we have the Citi simplicity credit card. As the name suggests, it’s a pretty simple card, no late, no annual fees, but in terms of benefits, this is what brings this card up. Every time you dine with the bank dining program, you get a free bottle of wine. You also have access to cities, world privileges, which includes money, I’ve dining, upgraded hotel rooms and car rentals and online shopping discounts. And like number three, you also get purchase insurance and extended warranties. Now this one only has a $35,000 annual income requirement. And again, the 18 years of age and being an Australian resident.
1. Qantas American express discovery card
Finally, number one, the Qantas American express discovery card, this card offers all of the same great benefits as number three, the other American express card that we covered.
However, this card earns you 0.75 Qantas reward points for every $1 you spend. Not only that, but at the time of applying for this card, the Qantas reward program actually had a $99 application fee. However, because I had just been approved for this Amex card, they actually waived that $99 application fee allowing me to get access to the Qantas reward points without having to pay for the application. Not only that, but it includes all of the same world-class service benefits as the other Amex card that we mentioned. And it actually has a $5,000 a year, lower minimum income requirement.
Eligibility
So the eligibility criteria for this card is that you have an annual income of $35,000 a year. You have no history of bad debt or payment default, you’re over the age of 18 and you’re an Australian citizen, permanent residents on a long-term visa.
And with that, we wrap up the best five credit cards for beginners.I know none of these credit cards had the amazing signup bonus, but at the end of the day, you need to have a starting point. And if you can get a card like this, that has no annual fee, which you can keep open for the rest of your life. Not only will, in some of these cases, actually using the cards, give you additional points, but as some of you may be aware, the longer you have a credit line open, the better it looks on your credit report. So in having this card open and keeping it open, you are actually doing yourself a favor in terms of increasing your credit score.
If there were any cards that I missed out on, or you have any recommendations for cards, please pop them in the comment section below, it would really help out the people who are reading this, trying to get started in credit cards and building their credit score.