Australian consumers today want credit cards with the lot: interest-free days, competitive interest rates, a good balance transfer rate and low annual fees. With the economy now slowing down, many are reconsidering their current credit cards and preferring those are great value for their money. If you’re thinking about switching to another credit card or are applying for the first time, compare credit cards that on offer before taking the plunge.
What are the most popular credit cards in Australia?
Low Rate Credit Cards
If a low rate card is what you’re after, then BankWest Lite MasterCard with its low interest rate of 10.75% might be what you’re after. Compare credit cards to see what else is available because there are other features like annual fees that you need to consider as well. BankWest Lite has an annual fee of $59, so other cards like NAB Low Rate with an annual fee of $49 and a low rate at 10.99% might also be an alternative.
0% balance transfer Credit Cards
Thinking of making the switch? Then keep your eyes peeled for 0% balance transfer credit cards like the St George Vertigo that offers 0% balance transfer rate for 6 months before switching back to a low rate of 11.39%. ANZ Low Rate cards also offer zero balance transfer rate for 6 months and then jump to a low rate of 11.99%. Compare credit cards and make sure you know what the interest rate will be when the balance transfer rate ends.
Long balance Transfer Credit Cards If you need a longer period to pay off your balance after switching credit cards, then long balance transfer credit cards might be an option. These cards offer low interest rates for longer periods of time so compare credit cards before jumping in. For example, the ANZ Frequent Flyer gives you a low rate of 2.90% for 12 months before it climbs to 17.99%, but only if applied through Mozo. It’s always a rewards card, so you can accumulate frequent flyer points as you spend. The Aussie MasterCard is another popular option with balance transfer rate of 5.99% for 12 months before it reverts back to 11.74%. It also has a special offer of 9.99% on purchases for the first year.
Low Annual Fee Credit Cards
Low annual fees are great for the consumer who needs a basic credit card for bill, groceries and the occasional retail therapy. There’s no need to pay for what you don’t need so choose a card like the NAB Mini with the low annual fee of $24 or ANZ First which has a fee of $30. Most cards with low annual fees have higher interest rates, but couple that with interest free days and you’ll avoid getting stung by the higher rates. Always compare credit cards across a range of banks for a better idea of what you’re paying.
Interest free days Credit Cards
Buy yourself some time to repay your credit card bills by opting for a card with interest-free days. In order for this feature to apply however, remember to pay your bill back in full. The Bankwest Lite has 55 interest free days, so does ANZ Balance which rewards you for reducing your balance. However, interest rates and annual fees vary, so compare credit cards to find out what’s best for you.
Where can I compare credit cards?
The easiest and fastest option to compare credit cards is to head to financial comparison websites like mozo.com.au. Here you can narrow down your search according to features like low annual fees, low rate, zero balance transfer or interest free days and compare credit cards from a wide range of banks.
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- Interest rates apply when you need to start paying the banks back for the purchases you make. If you struggle to meet monthly credit card payments, then go for a card with low interest rates to avoid getting penalized. You can even just compare credit cards with low interest rates on financial comparison websites like Mozo.com.au
- Interest-free days are generally found in most, if not all, credit cards. This is how much time you get before the banks start charging you interest for your purchases. So for example, “44 interest-free days” means you have up to 44 days to pay off your monthly credit card spending before the bank starts charging interest. As most people get paid monthly, this gives people some breathing space to get their monthly finances in order. Make sure you compare credit cards to see what suits your financial situation.
- Annual fees vary from card to card. If you want a credit card with a higher credit limit and lots of rewards, annual fees will naturally be higher here. But if you prefer to avoid fees and simply want a card that helps pay the bills, then go for one with low annual fees. Again, it pays to compare credit cards according to their annual fees on websites like mozo.com.au
- Rewards program are typically great for those on a higher income, or people who are frequent users of credit cards. Interest rates and annual fees will be much higher, but you get perks like frequent flyer points, loyalty points to redeem for things like electronics and even free insurance. If this is a handy option for you, it’s a smart choice to compare credit cards to see what reward program they have.
- Credit limit is definitely something you need think about. Just because you’re on a higher income doesn’t mean you need to get a card with a high credit limit. If you know you can’t handle the responsibility, go for a lower credit limit. It could just mean you stay out of debt!
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Credit cards are fantastic financial tools to help you manage bills and pay for goods, and can even reward you according to how much you spend. But before you launch into the world of credit cards, you need to do your homework and know what you’re getting yourself into. And the one thing you must do above everything else is to compare credit cards from a range of banks so you get the perfect one that matches your lifestyle and needs.
When you compare credit cards, you make sure things like interest rates, annual fees and rewards points are exactly what you want – not what the banks say you need. Having a credit card is great for those times when you need extra credit to make big purchases like holidays, unexpected medical bills, or car insurance and registration. But it does come with a lot of financial responsibility. You need to ensure that you can control spending and not end up in debt, which means when you compare credit cards, you can see how one card fits into your lifestyle more suitably than the other.
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Although a large number of people are swearing off using credit for any kind of purchase, mindful of the credit crisis spreading across the Western world like wildfire, there are still many for whom their “flexible friend” is an indispensable weapon in their financial armoury. For high-value purchases, often cash is simply not an option, while on overseas travel using your credit card can work out a lot cheaper than paying exchange surcharges every time you want to withdraw money. For those of us who are happy to continue with plastic, it is instructive to compare credit cards and see which will give us the better deal.
The two most prominent credit card brands on the planet are Visa and MasterCard. These two rivals have been battling for the larger market share ever since the credit revolution began a few decades back. Unless you are lucky enough to qualify for preferential banking offers, any credit card you are issued will most likely come from one of these companies. The issuing bank will have the most space on the card, with its name and logo having the most prominence, while the iconic and ever familiar MasterCard or Visa logo also be visible somewhere on the card.
As far as the use of the card goes, there is very little difference between these two. Both are widely accepted wherever you go in the world – this is in the merchant’s interest, as not accepting a certain type of credit card will see them miss business, however incremental this loss. As a rule of thumb, if you are traveling overseas it is worth keeping in mind that Europe seems to favor Visa, while the USA is more receptive to MasterCard. The UK seems to have equal provision for both, as do the most popular tourist destinations.
Comparing Visa and MasterCard is rather like comparing two different kinds of bottled water. Both do a perfectly good job for what they are, it is largely a matter of personal taste as to which you select. What you should look out for is the long-term interest rate on each card, rather than any special offers that you are offered. These special offers will often be enough to make a person sign up for a card, but just remember that the bank has to make their money from somewhere, so an excellent initial interest rate may well give way to a less-than-satisfactory one later on.
Credit cards that are more exclusive do exist – the American Express name is known worldwide as a byword for financial big hitting and is often mentioned by people looking to impress with the size of their bank balance. While the AmEx and Diners Club cards used to be used as “charge cards” – with the balance needing to be paid in full each month, both do now allow the holder to carry a balance from month to month. There are, however, both annual fees and credit scoring requirements that put both beyond the reach of many people – particularly in the present climate.
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Although some aspects of the media would like to convince the general public that credit cards are nothing but bad news, the truth is life without one can sometimes be difficult. Numerous websites and companies require a credit card for authentication purposes, as well as the fact that anything you buy with a credit card is protected by your credit card company. When used correctly, and in moderation, credit cards can be the most useful payment tool available to you.
The first, and perhaps most important, trick is to find a card that is applicable to you and your spending patterns. If you intend to use a card for one big purchase that you plan to pay off in stages, the best card is one with a low overall interest rate. Often, cards with low rates come with few enticing introductory offers – such as interest-free periods – but this becomes a benefit, as the long-term rate is lower. After all, there is little point having an interest-free period when you plan to be paying something off for a long time – interest is going to accrue, so it’s more important to get a rate that’s lower in the long run. For all these reasons, it is always best to compare credit cards before applying for one.
If, however, you use a card for every day purchases and can pay it off in full each month, the opposite is true. Go for a card that offers as many interest-free days as possible, which may make it possible to pay no interest at all. There are many cards available where the interest-free period is more than 40 days, which means if you do pay off the balance in full at the end of each month, you will accrue no interest at all. To ensure you get the best deal, carefully scrutinise the terms and conditions of any card you are considering applying for.
Secondly, a highly important part of using a credit card is to remember this: wherever possible, avoid the cash advance. Credit card companies make an obscene amount of money from cash advances, with some charging up to 27% interest on any cash withdrawals. If you need money for something when only cash will do, there are ways of obtaining the money you need from your credit card without paying a cash advance fee.
Using an online payment system like PayPal, send money to a trusted friend – or even yourself, using a different account – using your credit card as the source of funding. This will count as a purchase, so your normal interest rate will apply. When the money arrives in your online account, transfer it into your bank account. This process takes around five days, but on large amounts it will save you a fortune, as much as $270 on a $1000 transaction.
Finally, one of the most popular credit card tricks is known as ‘stooging‘. Hundreds of credit card companies offer introductory interest-free rates, designed to entice new customers. However, when the interest-free period has expired, the annual rate is usually quite high.
To get around this, find a card with a large interest-free period on balance transfers. Move your balance over to the card for the interest-free period, and then when that period is nearing an end, apply for another card with an introductory interest-free rate on balance transfers. Again, transfer the balance across from your first card. You can keep doing this for as long as different credit card companies accept you for new cards. Stooging can save you a great deal of money if you have a large balance that you are paying off month-by-month. Just remember to cancel each card before the interest-free period ends and move your balance in plenty of time. Credit card companies don’t like this, but it is perfectly legal.
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Where can I compare credit cards online?
Most consumers know how important it is to compare credit cards before applying for one. The problem is how overwhelming and confusing the comparison process can be. There are numerous credit card companies and each company offers several different types of cards. Fortunately, there are sites like Mozo where consumers can quickly and easily compare credit card offers.
All of the important factors outlined above are presented side-by-side. At a glance, you can see which card offers the lowest APR and who charges the highest annual fee. When you find a card that interests you, simply click on it to learn more. Mozo.com.au is an objective third party, so you can trust that their information is completely unbiased. If you decide to apply for a card, Mozo.com.au links directly to the online applications.
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One of the biggest reasons it’s important to compare credit cards is that there are different types of credit cards. For instance, there are low interest rate cards, which are a good choice for people who anticipate carrying a balance. Then there are balance transfer cards for those looking to consolidate the balances they’re carrying on multiple high-interest credit cards. If you don’t do some research, you won’t know if you have the right card for your personal financial situation.
Once you know what kind of card you want, it’s time to start looking at the numbers. Carefully compare the APR (annual percentage rate) offered by each card. There are a couple of things to look out for with regard to interest rates. First, note whether the rate advertised is an “introductory rate.” Often the rate advertised on a credit card offer will only last a short period of time, such as six months. Second, pay attention to whether different rates apply to different types of charges. There may be, for example, one interest rate that applies to purchases and a second, higher interest rate that applies to cash advances.
A variety of other factors also affect whether you’re getting the best deal. When comparing credit card offers, be sure to consider annual fees, rewards, cash back offers and late fees as well.
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Why is it important to compare credit cards?
A credit card is the physical representation of a line of credit you have with a particular financial institution. Having this line of credit enables you to purchase an item now and pay for it later. You are then typically charged interest on the balance.
Virtually all credit cards share this same basic setup, but that’s about where the similarities end. Everything from interest rates to perks and rewards varies widely from card to card. It would be a mistake to simply accept the first credit card offer that arrives in your mailbox. By comparison shopping, you can find the card that best suits your needs and offers the terms that benefit you most.
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Credit cards offer consumers a wide array of benefits. When used wisely, credit cards can help you track your spending and improve your credit score. They also make shopping more convenient. Here are seven of the biggest benefits of using credit cards.
Emergency expenses
Unexpected emergencies are a part of life. For instance, you or a family member may have a serious medical emergency, or you may find your car in need of expensive repairs. Unfortunately, not everyone has sufficient cash on hand to cover emergency expenses. In these situations, a credit card can be your safety net, and the interest you’ll pay will be significantly less than that of payday loan.
Convenience
Credit cards eliminate the need to carry cash, which means fewer trips to the bank. The added bonus is that a credit card is more secure than cash that can easily be lost or stolen. Credit cards also offer an easy way to purchase big ticket items, such as a new TV or holiday accommodation. A third convenience of using credit cards is the ability to make remote purchases, such as booking airline flights online or purchasing concert tickets over the phone.
Keep track of your expenses
Credit cards make it easy to keep track of your monthly expenses. Each month you’ll receive an itemised statement from your credit card company. At a glance you can see where your money is going and assess your spending habits. Your statement provides you with a concise and comprehensive record of your finances. Some credit card companies even categorise your expenses, providing you with a breakdown of what percentage of your monthly expenditures went to things such as retail and dining out.
Boost your credit score
Using a credit card responsibly can improve your credit rating. By paying your monthly bill on time, you are demonstrating your creditworthiness. A good credit history helps you obtain loans and negotiate better interest rates. Credit scores can even affect your ability to obtain insurance and get certain jobs.
Theft protection
All credit cards come with some type of theft and fraud protection. For instance, most credit card providers have fraudulent transaction policies and online guarantees so that you won’t be liable for unauthorised purchases. Stolen cash, on the other hand, cannot be tracked. If your cash is stolen, it is simply gone.
Widely accepted
Major credit cards are accepted virtually everywhere, all around the world and at most restaurants and retail shops. When you go out, a credit card is the only form of payment you need to carry with you. In addition, credit cards are often the only type of payment accepted by online stores. Without one, your ability to shop online is greatly limited.
Rewards
The majority of credit card companies offer some type of rewards program. Just by making your everyday purchases you are earning valuable rewards. Cash back programs are becoming increasingly popular. For instance, some cards will give you 1% cash back for qualified purchases. Other cards let you earn points that you can use to purchase items from a rewards catalogue. Earning frequent flyers miles is another popular rewards program.
If you use them responsibly, credit cards can be an asset. The seven benefits outlined above are only some of the reasons why credit cards will improve, not complicate, your finances and budget.
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Welcome back to the many different types of credit cards - part 3! In this article we will discuss low fee/no fee credit cards and reward credit cards.
Low fee/no fee
A low fee credit card is one that has only a nominal annual fee. A no fee credit card does not have any annual fee. An annual fee is a yearly amount charged for the convenience of having a credit card. Depending on the type of credit card you have, the annual fee can range from $25 up to a few hundred dollars.
Note that there are other fees associated with credit cards in addition to annual fees. You may be charged a late fee if you do not make your payment on time. Typically there are also fees charged for taking cash advances.
Rewards
Rewards cards are credit cards that let you earn rewards when you use the card to make purchases. One type of reward a credit card might offer is cash back. For instance, you might earn a 1% cash reward for every $1 you charge on the card. With other rewards cards, you earn points based on the amount of money you charge. You can then save up your points and redeem them for a reward of your choice. Common rewards include frequent flyer points, gift cards, hotel accommodation, car rentals, travel and merchandise. If you plan to apply for one of these credit cards, find one that offers rewards you’re interested in because there are many to choose from.
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