Credit cards are not one product. Every NZ card is a mix of a few levers: an interest rate that applies when you carry a balance, anyway you earn points or cashback, an annual fee, and a set of interest free days. Different cards pull those levers differently, and the marketing tends to shout about the rewards while assuming away the interest. Understand the trade offs and "best card" stops being advertising and becomes a question about your own habits.
Rewards cards: for people who pay in full
Rewards cards earn points, cashback or travel perks on your spending. The catch is they usually carry a higher interest rate and often an annual fee. If you always pay the balance in full each month and use the card for spending you would do anyway, rewards can genuinely put money back in your pocket. If you ever carry a balance, the interest you pay on what you carry can easily wipe out the value of everything you earn.
Low rate cards: for people who carry a balance
A low rate card keeps the interest rate down and strips out most of the perks and rewards. It exists for people who sometimes do not clear the balance. If you think you will pay interest, a lower rate saves more money than any rewards program will give you. The honest summary: rewards suit pay in full people, low rate suits carry a balance people, and most people drift between both.
Balance transfer cards
A balance transfer card lets you move existing debt from another card onto it, often at a reduced rate for a set promotional period. That lower rate window is useful when you are paying down a balance you already have. Read the detail before you sign: understand the rate that applies once the promotional period ends, any transfer fee, and whether new purchases sit at a different rate. Used well it is a cheap way to clear existing debt; used carelessly it can leave you paying a higher rate than you started with.
Match the card to the job. Rewards for pay in full spenders, low rate for balance carriers, balance transfer for clearing existing debt, business for separating work spending, and secured for building a credit history. One card rarely does all of these well.
Business credit cards
Business cards sit in the same framework but are aimed at companies. Their main value is admin: a separate card keeps business spending out of your personal accounts, produces tidy statements for accounting and can earn rewards on expenses you are paying anyway. Before applying, check the annual fee and whether the person behind the card guarantees the debt, which is common for new or small businesses.
Secured cards
A secured card is backed by a deposit you lodge with the issuer, and your credit limit is tied to that deposit. It is easier to get approved for and is the standard tool for building or repairing a credit history. You still get what is essentially a credit card, but the deposit protects the lender, which is why they will take the risk. For someone starting out or coming back from financial trouble, it can be a deliberate first step rather than a fallback.
How to pick
The decision is more honest than the marketing. Answer three questions:
- Do you always pay in full? If yes, rewards or no fee cards matter more than the interest rate.
- Do you sometimes carry a balance? Then a low rate card beats points, and carrying both is often a false economy.
- What are you paying in fees? An annual fee and overseas conversion or cash advance costs only make sense if what you get back in rewards and convenience genuinely outweighs them. See our guide to rewards and fees for how to weigh that.
Whichever type you land on, the discipline is the same: pay at least the minimum on time, understand the interest free days, and avoid running the card to its limit. The best card in the world is a bad deal if you carry a balance on it, and the plainest card is fine if you use it sensibly. Our guide to managing credit card debt covers the rest.