How do they really work? I know that you get a limit. Lets say $2000. If I only spend $450, do I have to pay back that $450 in the next month to beat the interest, or only when I reach the $2000 limit?
Yes, you have to pay back the total value owed each month or you get charged interest.

What is an APR?
Annual percentage rate - the higher this figure, the more interest you potentially pay on your purchases.

How does the interest work? If you pay the balance before the end of the month, you don't pay interest?
Most providers give you a statement, a total to pay, a minimum payment, and a date to make payment. If you pay off in full by the due date, no interest. Make less than the full amount but more than the minimum payment and you are charged interest - check your provider as some charge interest on the remaining balance but most on the full balance. The due date is usually towards the end of the month but could be the start of the month or the middle... check the provider.

How can you make it work so that you don't end up in debt?
Only spend on the card what you have in the bank already and ALWAYS pay off in full.

What are rewards cards like? Are banks better or other credit card providers?
Depends what you want. I have a card with low APR (very low - 7.9%) and 1% cashback. This is because we only pay off the full amount 90% of the time so low interest is important and 1% of all monies back every year is a nice little bonus! An extra 75 quid or so doesn't go amiss. I also get instant cashback deals which change every now and then, so using one particular chain of petrol stations means I get 3p a litre straight back credited to my card every time I buy petrol there! Some people prefer air-miles or vouchers for a high-street store, check what you want first. I'd always say cashback and a low APR but you may not.

If I were to apply for a card, would they send me one? Or would I be approved and then have to fill out more forms to get the card?
You have to be approved first: I tend to apply on-line to avoid waiting and delays. It's a very simple form about income only.

With interest free periods on purchases, is there say 50 days for each purchase? So if I bought a computer on the 12th of the month, and a freezer on the 20th, would the interest free period start from the first purchase?
It's a potential interest free period: basically your statement starts on the 1st of the month and payment is due on the 25th of the next month (for example). So if you buy something on the first of the month, you pay no interest until the 25th of the next month (up to 56 days interest free in a 31-day month). If you pay in full, no interest. If you pay part of the balance, interest is charged. If you buy something on the 11th, you have only 46 days interest free. Watch out for the sneaky "up to" statements! Pay off the balance in full every month.


So could I get a card when I only get Centrelink payments? DF could co-sign. I've heard you can get cards in two people's name, in a relationship?
Depends on the creditor if they'll give you a card or not, you may need to apply to a few different places. Each application gives you a credit score though - a high score means you'll find it harder to get credit. Find out first if the creditor will give a card to a centrelink payment person before you apply. You can get cards based on a couple, we've been offered them before, but usually it's one person is the main person and responsible and the other just has access to the credit. Not good if your DF is impulsive and not good at saving. You can maybe get two cards as a couple but keep DF's in the freezer trapped in a litre of water's worth of ice - by the time it has thawed out of a block of ice he may not want to make the purchase any more! I've heard that works sometimes for impulse buyers.

HTH!