Five common credit card mistakes

In Australia alone consumers have racked up a staggering $49.5 billion in credit card debt

Five common credit card mistakes

In Australia alone there are 15.85 million credit card accounts currently in use and consumers have racked up a staggering $49.5 billion in credit card debt. But not everyone is using their cards wisely.

Australians are paying hundreds of thousands of dollars each year in unnecessary charges due to mistakes they’re making with credit cards. Consumers are being urged to use their credit card wisely in order to avoid nasty debt that can develop quickly and last for years.

Jeremy Cabral, publisher of leading credit card comparison website,, points out the five most common credit card mistakes and gives tips on how to rectify them.  

1. Paying bills late
If you pay your credit card bill late, and don't pay it in full, you will attract late payment charges and will not benefit from interest free days on purchases. This will become even more important once we move to a positive credit reporting system here in Australia. Always pay your credit card on time and in full, to avoid additional interest and late payment charges.

2. Making only the minimum payment
If you carry a balance, always repay more than the minimum repayment amount. An extra $50 a month can go a long way in reducing your interest charges and repayment period.

3. Failing to compare cards on the market
Compare rates and fees regularly. Always choose the right credit card for your spending and repayment behaviour.

  • If you carry a balance month to month and have a rewards credit card, you should consider switching with a balance transfer to a low interest credit card that reverts to a low purchase rate. It's important to repay the balance in full before the introductory period ends.
  • If you spend a lot on your credit card, always repay it in full, and on-time and don't have a rewards program attached to your card, consider switching to a frequent flyer card or another rewards program credit card.
  • If you only use your card in emergencies, consider a no annual fee credit card.
  • If you plan to make large purchases on your card, consider a card with a special introductory rate on purchases that reverts to a low interest rate. It's important to repay the balance in full before the introductory period ends.

4. Spending without a budget in mind
Spend only what you can afford to repay within the interest free days period - a lot of cards commonly have a 55-interest free days feature. It's also important to have a budget to plan how much you can afford to spend.

5. Withdrawing cash at ATMs
Avoid using ATMs to withdraw funds as they attract very high cash advance charges and interest is charged immediately from the day you withdraw the funds. Plan your spending appropriately to avoid ever having to use your card for a cash advance.

"By understanding these mistakes, you can take charge of your finances and free yourself of unnecessary financial stress. By rectifying these mistakes, valuable savings can be made, as well as shaving time off the repayment period,” concludes Mr. Cabral. is a free service which, since 2006, has helped over 4.8 million Australians save time and make an informed decision when comparing credit cards issued by Australian banks and credit unions.


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    Pass the Ductape
    5th Feb 2013
    Best advice anyone with a credit card will ever get!

    Cut the damn things up...... You'll end up a lot richer for the experience.
    5th Feb 2013
    I pay my card on the due date by moving money from my "trading account" (which has a very low interest payment) to my credit card account. All done by internet banking as my account(s) are with the same bank. Hence, no interest charged to my card.
    One Credit Card mistake not mentioned is the purchase of lottery/Lotto tickets on line (and over the counter) using your Credit Card. Gambling is regarded as a cash withdrawal and the appropriate interest is charged immediately to the account. This is a much higher rate and is charged on a daily basis until the card payment is made.
    Use a Debit Card for that type of purchase.
    Young Simmo
    5th Feb 2013
    OK here is a system that has worked for me and my wife (73 year olds today) since 2000 and we have not payed a cent in interest. We only pay the annual fee which started out at about $45.00 and is now near $70.00. In 2000 we decide to go onto the Internet, so we got a $500 limit Visor Card. We got that so nobody could take us for more than $500 in one lump. We use our Visor Card for just about everything we buy and pay fore. The freebies for awards is nice as well. Every pension day we pay off the Visor and start from scratch. The $500 limit doesn't hold us back either as when we go to Perth or on holidays we just top it up with a $1000 or $5000 to cover that particular obstacle. Yes 12 years use and not a cent in interest.
    5th Feb 2013
    One of the nice things about the Commonwealth Awards Credit card, is the Annual Fee can be paid by the Award points, so you are not out of pocket at all, as long as you pay the balance on time and in full.
    5th Feb 2013
    Forgot to mention that in the current Money Magazine, they have an article on credit cards in Australia. 81% pay the full amount, but 19% DO NOT pay in full. Interesting statistic.
    6th Feb 2013
    Remember interest is charged on the original FULL amount until you get the card fully paid off. If you MUST eg., an emergency do a cash withdrawal, pay off the total card as soon as possible after that transaction, do not wait for the statement.
    6th Feb 2013
    Does anyone know if one member of a couple uses a credit card against the other persons advice ,,and owes money on it when they die, is the other person responsible for the debt??
    6th Feb 2013
    Yes A Friend Of Minds Spouse Died And He Had To Pay Off Her Credit Card As The Card Was Used To Buy Household Items