What would I use a credit card for?

Whether you're making everyday purchases, buying a big-ticket item or want to consolidate debt, a credit card can be a convenient tool for managing your money. But are you getting the most out of your credit card?

Here are a few different ways to use a credit card to your advantage.

Protect your purchases

Some credit cards offer a range of consumer protection benefits that you don’t get when using cash or debit. These include:

· Complimentary purchase protection. Some gold and platinum cards offer financial protection against theft and breakage on your purchases for a limited time.

· Fraud protection. Advanced security devices and fraud detection measures mean more peace of mind when shopping online.

· Price protection insurance. Available on select credit cards, price protection insurance entitles you to a refund if you find an item you've already purchased on your credit card at a lower price.

· Built-in travel protection. Credit cards offering complimentary travel insurance provide automatic cover against unexpected events and costs.

These benefits and more may make credit the smarter choice for certain purchases.

Earn valuable rewards

From groceries and petrol to your utility bills, credit cards are an easy and convenient way to pay for everyday items.

Since you’ll be making these purchases anyway, why not get more from your money with a cashback or rewards credit card and earn points for every dollar spent?

Depending on your rewards program, you may be able to redeem points for great rewards and lifestyle benefits such as:

· Cashback. Cashback cards allow you to earn points or a certain percentage of cashback for every dollar spent. Once you reach a minimum spend threshold, you can redeem the points for cash.

· Travel points. Accumulated points can be exchanged for travel benefits, including free airline tickets, hotel stays and upgrades. Points can either be transferable or non-transferable.

· Shopping rewards. Accumulated points can be exchanged for shopping vouchers, gift certificates, merchandise and more.

· Instant rewards. Instant rewards are automatic discounts at the register or on your first purchase when opening a new account.

Earn rates and points expiry will vary according to the rewards program, so always read the terms and conditions carefully.

Buy now, pay later

Got your eye on a new refrigerator or washing machine? 0% introductory rate cards can make it easier to pay for big-ticket items without breaking the bank.

With some banks offering promotional periods up to 18 months, these cards may be a good way to use credit to your financial advantage.

Reduce existing debt

A 0% balance transfer card can help slash your interest payments by allowing you to roll all of your high-interest balances into a single, interest-free payment.

If you can apply a little discipline and resist the temptation to make new purchases, a 0% balance transfer can potentially make your monthly payments go further and help you get back in control of your finances.

For example, Sam is carrying a $7,500 balance on a 20% interest credit card. His monthly payment is $200. Wanting to reduce his debt faster, he decides to transfer the entire balance to a 15-month, 0% balance transfer credit card. By paying off his debt during the promotional period, Sam saves $4,368 in interest – a smart financial decision.*

Work out how long it will take to pay off your existing balance with our Credit Card Repayment Calculator.

Have a back-up for emergencies

Do you have a leaky roof or an unplanned trip to the dentist? Having a back-up credit card in case of emergencies can give you greater peace of mind.

Some people keep a low rate credit card in their wallet for this purpose, which can help you save on interest if you carry a balance.

No fee credit cards are another good back-up option, offering you the convenience of credit without a high annual fee.

Things to bear in mind

While credit cards can help you manage your cash flow, there are a few things to be mindful of.

Make sure you:

· Don't use credit to live beyond your means.

· Try to pay down 0% balances before the promotional period ends.

· Always read the terms and conditions on your card to make sure you understand the different fees and charges.

There are hundreds of different credit cards on offer, so be sure to find one that supports your lifestyle and spending habits. If your current credit card isn’t meeting your needs, make a better choice today.

Consider whether there are any special features or benefits you could use to your advantage, and don’t forget to compare rates and fees.

Search and compare credit cards now.

* /calculators/credit-card-calculator/

Based on a $7,500 balance, 20% interest and a fixed payment of $200/month

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