Our best credit card hints and tips
InfoChoice has compiled a list of what it considers are the best credit card hints and tips to help Australians save money.
We have looked across: Low rate cards, rewards cards, balance transfer offers, overseas cards, penalty and annual fees
At InfoChoice, we give you access to around 200 credit card comparison based on rates, fees and features.
Compare below to find the best credit card for you.
1. Reduce your Annual Fees
If you have multiple credit cards consider cutting them to only one card. Why pay annual fees on multiple cards if you don’t have to? Some credit cards have an annual fee of $300-400 per year per card so this is well worth considering.
If your card charges an annual fee each year think about switching to a credit card with no annual fee as they do exist.
2. Avoid over limit fees
Regularly review your available credit on your card and don’t spend more than your limit to avoid over-limit charges of up to $40.
3. Don’t Pay Late Fees
Be aware of your credit card’s payment date, transfer money into the account at least a few days before this date to avoid being charged late fees. Some providers charge up to $40 for late payment.
4. Minimise Overseas ATMs Fees
Most credit cards charge fees for withdrawing money outside of Australia. Some cards will incur an overseas cash advance fee of up to $5 or 3% of the withdrawal amount plus a currency conversion fee of around 2-3%. Try to minimise the number of small purchases or small cash advances you make when travelling to reduce these costs.
You can cash up the card prior to departure and withdraw the money like your normal ATM card to avoid being charged the cash advance interest rate. Typically cash advances incur interest at a high rate immediately from the date of withdrawal.
5. Switch to a Low Rate Card
Using a low rate credit card is especially important if you don’t pay off your monthly balance in full each month. If this is you, a card with a low rate of interest is the most important feature you should be looking for. A low rate card will help you minimise the amount of interest you are paying each month.
6. Rewards Cards – Are they really worth it?
Shoppers who pay off their credit card balance every month in full can look for a card that offers great features and rewards as the interest rate is of less importance to them. Some credit card rewards provide travel offers, access to rewards points, insurances and extended warranty on purchases however they generally have high interest rates and annual fees associated with them.
It is important that you do some homework on the various reward cards available to you. Often shoppers will be required to spend over a certain amount on their card in order to get a real benefit and this can be well over $1,000 a month. In these situations if you aren’t a big spender on the card the cost will often outweigh the benefits.
7. Take Advantage of Balance Transfer Offers
Balance Transfer offers can give some relief for people with credit card debt. There are plenty of balance transfer offers in the market which offer low rates of interest over the balance transfer period. You need to ensure you repay the balance transfer debt in full first before making new purchases on the card so you avoid paying rates of interest which are likely to be higher than the balance transfer rate.