What GFC? It’s appears we as Australians are spending up to $2.4billion more on our credit cards than last year. Consumers are being urged to ensure they get the right card to suit their spending habits in order to avoid unnecessary charges and reap the benefits of Christmas spending.
by Anna McDougall, Money Maven
According to Jeremy Cabral, Publisher of leading credit card comparison website CreditCardFinder.com.au, there are three distinct credit card personalities.
Each personality has some important things to consider before choosing a credit card:
1. Live It Large
The credit card user who flashes their card at any and every purchase and lives beyond their means. The impulse buyer who doesn’t think about repayments and lives the champagne lifestyle on a beer budget. “If you’re a ‘Live it Large’ credit card holder you could consider a low interest credit card, possibly one that has a 0% purchase rate and balance transfer rate.,” says Mr. Cabral.
One Example Credit Card: The Citibank Clear Platinum Credit Card
. $49 p.a. annual fee for the first year ($99 p.a. thereafter) annual fee
. 0% p.a. for 6 months (reverts to 11.99% p.a.) on purchases
. 0% p.a. for 6 months on balance transfers
. Cash Advance Rate of 21.74% p.a.
. 55 days interest free
. Minimum Income Requirement of $35,000 p.a.
2. The Rewards Hoarder
The credit card user who is obsessed with earning rewards points on all purchases. The Rewards Hoarder would use their card to pay for a coffee if they could get points from it! “If you’re fanatical about earning points and claiming rewards from your credit card but don’t necessarily spend big on your card each month then you could consider switching to a rewards card with a $0 annual fee.” says Mr. Cabral.
One Example Credit Card: American Express Qantas Discovery Card
. $0 p.a. annual fee
. 0% p.a. for 6 months (reverts to 20.74% p.a.) on purchases
. 44 days interest free
. Minimum credit limit of $1,000
3. The Grinch
The credit card user who only uses their card in emergencies and pays their balance in full each month. The responsible spender who likes to be in control. “If you’re a Grinch credit card user you could consider a credit card with a $0 annual fee and 0% balance transfer card.” says Mr. Cabral.
One Example Credit Card: Bank West Platinum
. $0 p.a. annual fee
. 0% p.a. for 6 months (reverts to 17.99% p.a.) on purchases
. 55 days interest free
. Minimum income requirement of $15,000
. Complimentary travel insurance
. no foreign transaction fees
Avoid the Christmas Blow-Out!
1. Avoid Long Shopping Trips
Tiredness takes over at the end of a shopping trip and you tend to stop watching the dollars because you just want to get home. Try to plan your Christmas shopping as several smaller trips.
2. Use the Lowest Interest Credit Card
If you need to use a credit card for purchasing gifts, try to use a card that has the lowest interest rate, in case you have to carry over a balance. Now is the time to switch to a low interest card.
3. Know Your Balance and Purchase Rate
Simply knowing your credit card balance and purchase rate will help you to keep track of the amount you will need to repay so that you can keep your spending in check.
4. Plan Your Repayment Budget
Try to have a repayment plan before the bills start arriving and stick to that plan.
5. Consider Shopping Online to Avoid the Bustle and Excitement
An alternative to shopping in a busy, bustling shopping centre is to shop online where you have time to select your products, and you can avoid the excitement and pressure that you experience when shopping in overcrowded stores.