How to choose a credit card that fits your spending and save

Font Size:

Credit cards are a convenient way to pay for things, but that convenience can come at a cost.

The kind of credit card you should get depends on your spending habits and how you want to pay off your debt. 

Choosing the right one can save mean significant savings.

Credit cards have different features to suit different types of spenders and it is important that your credit card matches your spending patterns and financial behaviour.

If you always pay off your credit card in full each month, look for one that offers interest-free days. This means you pay no interest for a certain number of days after making a purchase (for example, 55 days).

These cards may charge higher interest rates and annual fees, but if you pay off your debt within the interest-free period, you’ll avoid paying interest altogether, so the higher annual fee may be worth it.

If you know you won’t be paying your debt in full straight away, consider a card with no interest-free days. You’ll usually pay lower annual fees and less interest, either from the day of purchase or the day your monthly statement is issued.

A recent Canstar credit card ratings report found that a five-star rated credit card for customers that benefit from low-rate cards could get interest rates of 9.78 per cent, while the market average for credit cards is 16.41 per cent.

According to Canstar, if rewards cards are most beneficial to your spending habits, getting a five-star rated rewards card could offer around $52 in value per year after factoring in annual fees and other charges, compared to an average rewards card, which would actually end up costing you $84 per year when factoring in the fees and other charges.

It’s worth shopping around to find the best credit card for you. It might be easy to get a card with the financial institution you normally use, but you could find a better deal elsewhere.

For more information on choosing the credit card that is right for you, visit moneysmart.gov.au.

If you enjoy our content, don’t keep it to yourself. Share our free eNews with your friends and encourage them to sign up.

Join YourLifeChoices today
and get this free eBook!

Join
By joining YourLifeChoices you consent that you have read and agree to our Terms & Conditions and Privacy Policy

RELATED LINKS

Purchases you shouldn’t make with a credit card

Older Australians are increasingly asking for help in managing credit card debt.

Are you too smart to be scammed? Take this test to find out

Australians are set to lose a record amount to scams in 2019, according to the ACCC.

Safety and security lead housing concerns for older Aussies

Safety and security and having somewhere that feels like home are critical.

Written by Ben

0 Comments

Total Comments: 0

    FACEBOOK COMMENTS



    SPONSORED LINKS

    continue reading

    COVID-19

    Concerns over limited data on how vaccine will affect over-65s

    There are growing concerns that the vaccine expected to be given to the majority of Australians when the rollout starts...

    Nutrition

    Making healthy eating more affordable

    Eating a healthy diet is crucial to our mental and emotional health as well as our physical wellbeing. It can...

    News

    Hands up who's in the club that is wrecking the planet

    Alex Baumann, Western Sydney University and Samuel Alexander, University of Melbourne Among the many hard truths exposed by COVID-19 is...

    Stylewatch

    The most iconic handbags of all time

    While countless clothing trends have come and gone, certain handbags have remained desirable across the decades, as coveted now as...

    Health news

    Health check finds Australia is stressed and obese

    One quarter (25.6 per cent) of Australians undergoing a health check have been identified as at risk of developing diabetes....

    Finance News

    Financial planning costly and complicated, say review submissions

    A review of the financial advice sector seeking to cut red tape and provide affordable advice could lead to more...

    Diseases

    Types of polyps and what to do about them

    Polyps are clumps of cells that grow inside your body. While most polyps aren't dangerous, some can develop into cancer....

    Finance

    How SMSFs invested in 2020 - and what this means for 2021

    The size of the self managed super fund (SMSF) market now represents one-quarter of the Australian superannuation industry and sits...

    LOADING MORE ARTICLE...