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Credit cards are a widely accepted, convenient, and secure alternative to cash and other payment methods in Australia. The evolution of credit cards in Australia can be traced back to the 1900s, starting with charge coins issued by large merchants. Over time, these were replaced by charge plates, which included the customer's name, address, account number, and sometimes their signature, making fraud more difficult. The first widely available credit card issued by Australian banks for general consumption was Bankcard, which dominated the market in the 1970s and 1980s. Today, credit cards in Australia are provided by banks, credit unions, and online financial institutions, with the Big Four banks (CommBank, Westpac, ANZ, and NAB) being the most popular choices. The three major credit card networks in Australia are Visa, Mastercard, and American Express (AMEX). Credit cards offer various benefits, such as rewards, travel perks, and purchase protections, but it's important to be aware of the associated fees and responsibilities.
| Characteristics | Values |
|---|---|
| History of credit cards in Australia | Charge coins, charge plates, and charge cards were used before the introduction of credit cards in the 1970s. |
| First credit card in Australia | Bankcard, introduced in the 1970s, was the first widely available credit card issued by Australian banks. |
| Major credit card networks | Visa, Mastercard, and American Express (AMEX) |
| Other credit card networks | Diners Club and the now-defunct Bankcard |
| Credit card providers | Banks, credit unions, and online financial institutions |
| Popular credit card providers | The Big Four banks (CommBank, Westpac, ANZ, and NAB), Citi, AMEX, and HSBC |
| Average credit card limit | Around $9,500 |
| Credit card trends | No-interest cards, virtual credit cards, cashback offers, and credit card perks |
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What You'll Learn
Charge coins and charge plates
Charge coins were first introduced in the late 19th century and remained popular until the 1930s. These coins were typically made from metal and had the account number and sometimes the customer's name engraved on them. They were presented by the customer to the merchant as a form of payment, and the merchant would then use a metal imprinter to transfer the coin's information onto a paper draft, or charge slip, for authorisation. The charge coin was essentially an early form of a credit card, and they were often given to customers who had accounts in prestigious department stores or oil companies.
Charge plates were similar to charge coins, but they were larger and usually made from a more valuable metal, such as silver or gold. Like the charge coin, the customer's account number and name would be engraved on the plate, which would then be presented to the merchant to make a purchase. The merchant would then use a metal imprinter to transfer the plate's information onto a paper draft, or charge slip. Charge plates were often given to high-value customers as a symbol of their status and to encourage their continued custom.
Both charge coins and plates were usually kept in a small leather case, which would sometimes include a metal imprinter for the merchant to use. These early forms of credit cards were a precursor to the modern credit card, which was introduced in the 1950s. The metal imprinter, which was used to transfer the customer's account information onto a paper draft, was also a predecessor to the modern magnetic stripe and chip-and-PIN technology used on credit cards today.
While charge coins and plates are no longer used, they played an important role in the development of credit and payment systems. They offered a convenient and secure way for customers to make purchases without carrying large amounts of cash and provided merchants with a guaranteed form of payment. Today, they are collectors' items, offering a glimpse into the history of commerce and the evolution of payment methods.
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Credit card networks
Credit cards in Australia have evolved from charge coins and charge plates to the plastic cards we know today. The introduction of charge coins can be considered the earliest form of credit in the country, dating back to the 19th century. These were issued by large merchants such as departmental stores, hotels, and petrol companies, and they bore the customer's account number, name, and the merchant's logo.
Today, credit card companies in Australia primarily come in three forms: credit card networks, credit card providers, and credit card brands. Credit card networks, also known as credit card associations, are responsible for processing payments and facilitating network services for credit card transactions. They set up the infrastructure to process credit and debit card payments, and they charge merchants surcharge fees to facilitate these transactions.
The four major credit card networks in Australia are Visa, Mastercard, American Express (AMEX), and Diners Club. Visa, Mastercard, and American Express are the most dominant, with a combined 93.3% share of general-purpose consumer credit and charge cards on issue in Australia as of 2000. American Express differs from the others as it is both a network and a provider, directly issuing credit and charge cards to consumers. Diners Club, on the other hand, has been fading in popularity and availability, but it still provides travel cards to Australian Government public servants.
The major credit card networks work with card issuers, which are often banks or credit unions, to offer credit cards to consumers. Card issuers set the financial terms, such as annual fees, interest rates, grace periods, and late fees, and they provide customer service. In Australia, card issuers include Commonwealth Bank, Westpac, Macquarie, NAB, and ANZ. These card issuers may offer cards on different networks, giving consumers a variety of options to choose from.
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Credit card providers
The Big Four banks—CommBank, Westpac, ANZ, and NAB—are the most popular credit card providers in Australia due to their brand presence and market reputation. Other major players in the credit card space include Citi, AMEX, and HSBC. Regional banks and smaller financial institutions, such as People's Choice, are also growing in popularity as consumers turn to them for alternative products, deals, and services.
There are also industry-specific card providers, such as the Australian Military Bank, Defence Bank, Police Credit Union, Police Bank, and Teachers Mutual Bank. Airlines, supermarkets, and retail companies partner with credit card providers to issue co-branded cards, such as store and frequent flyer credit cards. For example, NAB issues co-branded Qantas Premier cards and Coles store cards.
In addition to traditional credit card providers, there is also a category of virtual credit card products that are digital, flexible, and linked to brands. MoneyMe is one of these new types of no-card options. As with all online issuers and brands, consumers should carefully read the fine print before applying for a credit card.
Australia's three major credit card networks are Visa, Mastercard, and American Express (AMEX). Other notable networks include Diners Club and the now-defunct Bankcard, which ceased operations in 2006. Credit card networks are distinct from providers, although AMEX and Diners Club are both networks and providers.
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Credit card trends
Credit cards are a big business in Australia, with a range of banks, credit unions, and online financial institutions providing them to consumers. The average credit card limit in the country is around $9,500, and the major credit card networks are Visa, Mastercard, and American Express (AMEX).
The rise of virtual credit cards
With the increasing use of mobile wallets, physical credit cards are being replaced by virtual ones. While it is still common to have both a plastic card and a digital one, some providers are now offering instant virtual and virtual-only options, such as the MONEYME Freestyle Virtual Card and the PayPal Rewards Card.
No-interest credit cards
In 2020, credit cards that do not charge interest but instead accrue a flat monthly fee when used or when a balance is carried over were introduced. These cards were launched as an alternative to BNPL (Buy Now, Pay Later) services, combining features of traditional credit cards and BNPL.
Cashback and bonus point offers
0% interest and bonus point offers have long been popular in Australia. Cashback offers, in particular, have gained traction, with some card providers partnering with merchants to offer cashback rewards when specific cards are used for purchases.
Co-branded credit cards
Airlines, supermarkets, and retail companies partner with credit card providers to issue co-branded cards, such as store cards and frequent flyer credit cards. For example, NAB issues co-branded Qantas Premier cards and Coles store cards.
Credit card competition
Prior to 1974, the only credit cards available in Australia were store-issued cards that could only be used in the issuing store. The introduction of Bankcard in the 1970s marked the beginning of a national bank card association, allowing the use of credit cards nationwide. Since then, the market has become more competitive, with the rise of international cards like Visa and Mastercard, as well as other offerings from banks and financial institutions.
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Credit card history
Credit cards have become an extremely potent source of financial support in Australia, with the industry serving as a useful source for both consumers and corporate giants. The history of credit cards in Australia dates back to the 19th century, with the introduction of charge coins.
These charge coins were made of celluloid or metal and were issued by departmental stores, hotels, petrol companies, and other large merchants to regular customers. They featured the customer's charge account number, along with the merchant's name and logo, making it easy to imprint on sales slips. However, due to the lack of additional identification, these coins were susceptible to fraud.
To address this issue, charge coins were replaced by charge plates in the 1930s. These charge plates, resembling military dog tags, included the customer's name, address, account number, and sometimes their signature, making fraud more difficult. However, they were still issued only by large merchants and could only be used in the issuing store.
In 1946, banker John Biggins developed the Charg-it card, which was the first bank-issued card that could be used at multiple merchants. This was followed by the Diners Club card in 1950, made of cardboard and accepted at select restaurants.
In the mid-1960s, Bank of America began licensing its Californian credit card system to banks across America, leading to the formation of a national bank card association and the widespread use of BankAmericard (later known as Visa). In 1966, Master Charge, which would later become Mastercard, was introduced as a cooperative effort between Northeastern banks.
Prior to 1974, Australia primarily used store-issued cards, with only a small number of American Express and Diners Club cards accessible to the wealthy. However, in 1974, credit cards were introduced nationwide through the joint effort of Australian banks, which launched the Bankcard. By 1976, Bankcard had become a success, with over a million cardholders and almost 49,000 participating merchants. The first ATMs appeared in Australia in 1977, and by 1978, Bankcards could be used across the country.
In recent years, the rise of mobile wallets has led to a shift from physical credit cards to virtual ones, with providers offering instant virtual and virtual-only options. Additionally, credit cards with no interest and flat monthly fees have gained popularity as an alternative to BNPL (Buy Now, Pay Later) services.
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Frequently asked questions
Credit cards in Australia are typically made of plastic. However, the earliest credit cards in the country were made of cardboard or even metal.
Credit card providers in Australia include banks, credit unions, and online financial institutions. The Big Four banks (CommBank, Westpac, ANZ, and NAB) are the most popular options, but there are also smaller banks like People's Choice and industry-specific card providers like the Australian Military Bank and Teachers Mutual Bank.
The three major credit card networks in Australia are Visa, Mastercard, and American Express (AMEX). Other notable networks include Diners Club and the now-defunct Bankcard, which was withdrawn from use in 2006.
