News and Features

28th December 2007
5 things you can't afford -if you have a credit card debt

21st December 2007
Green Credit -the latest trends

21st December 2007
How to survive the post-Christmas sales

14th December 2007
Tips for Christmas spending abroad

14th December 2007
Plastic surgery -It's rife among credit cards

29th November 2007
Reward cards -What's Your Point Currency?

29th November 2007
What makes up your credit score?

16th November 2007
Caught in the credit card spin cycle?

2nd November 2007
How to have an interest free Christmas

19th October 2007
What to look for in a credit card

5th October 2007
Money matters - Who can you trust?

28th September 2007
Shopaholics dream - the soaring Aussie dollar

21th September 2007
Credit Card Catastrophe Looming

12th September 2007
Did you remember to pay your credit card?

23rd August 2007
Foreign Currency Can Be Costly

13th August 2007
Avoid the balance transfer blues

16th July 2007
Debit Cards vs Credit Cards - Chalk and Cheese?

8th May 2007
Avoid the budget bombs - Responsible saving and spending are easily sabotaged by these budget blunders.

4th May 2007
Credit Card Balance Transfers - How low can you go?

Hints & Tips

Make sense of it all with these Credit Card hints & tips.

About Credit Cards
Credit Card General Tips
Credit Card Security
Fees & Penalties
Introductory rates & Balance transfers
Credit Card Minimum Repayments
Credit Card Features

About Credit Cards

Credit cards simply offer you an unsecured line of credit. They are convenient and safe to use, whether shopping in person, by telephone or on-line. The cost of having access to this line of credit depends on your spending and repayment habits but, as a general rule, the faster you repay the borrowed amount, the less the card will cost.

Credit Card General Tips

Understand your spending and repayment habits and look for cards that work the way you do. Which of the following four profiles best describes you?

Habitual Spender - If you struggle to pay off your credit card each month, try to find a low rate card with a very low or no annual fee.
Impulse Spender - If you only use your card for emergencies and impulsive spending (such as Christmas shopping, vacations or sales) then spend a few months after paying off the balance, try to find a low rate card with a very low or no annual fee.
Everyday Spender - If you use your car for regular purchases such as groceries and petrol and pay off your balance each month then you have a bit more breathing room since you don' have to worry about interest rates. Your challenge will be to find the card that provides the features you're interested in at the lowest cost.
Big Spender - If you earn and spend a lot of money on your credit card each year and always pay off your balance you might be in the market for a card that provides features and perks that you use frequently. These may include free travel insurance, concierge services and rewards programs.

Other apects of credit cards that you should consider include:

Understand the terms and conditions of introductory and balance transfer offers and periods.
On average, cards with reward programs cost more. Only choose a reward card if your annual spending will give you a return will outweigh the cost of the rewards program membership.
Know the features and conditions of your card such as the minimum repayment criteria, currency conversion fees and penalties for missed/late payments.
Understand that there are some cards that charge interest on all new purchases if minimum payment is not made by the due date.
Be aware there are some cards that treat BPAY transactions as cash advances.
Be aware that most rewards programs incur an additional annual fee, however some may offer a spend per annum deal to waive that fee.
There are some cards that allow you to earn points on cash advances and BPAY.
Pay as much as you can off the balance each month - enough to cover interest and fees and charges.
Reduce the number of cards you hold. This will reduce additional costs like ongoing fees.
Avoid store cards which usually have a much higher rate of interest
Avoid increasing the limit of the card.
Some institutions offer credit cards under "package deals" and allow for annual fees/rate discounts on the cards. (certain eligibility criteria to be met).

Credit Card Security

Be aware of credit card security as the last thing you want is to be a victim of credit card fraud. Take these easy steps to protect yourself and your money:

Report Lost or Stolen cards immediately.
Never let your credit card get out of your sight while making a purchase (eg at a restaurant).
Notify your card issuer if you plan to travel overseas so that your transaction won't be perceived as being suspicious. This could prevent your card being deactivated while you're in the middle of your vacation.
Make sure when shopping on-line that you deal only with reputable sites that secure their we sites through the use of https:// pages. Read the help for your internet browser to find out how you can tell that each site is secured properly.

Fees & Penalties

Your behaviour can affect how much or how little your credit card will cost you. Some fees are part and parcel of the card but some are only triggered when you miss a payment or use your card in certain ways:

You should familiarise yourself with the features and conditions of your card such as the minimum repayment criteria, currency conversion fees and penalties for missed/late payments.
There are some cards that charge interest on all new purchases if minimum payment is not made by the due date
You should be aware of the types of transactions that will trigger additional fees and charges (such as international transactions).
Know what your account balance is and how close you are to your limit to avoid being stung by over the limit penalty.
Know the due date for your payment and transmit payment with enough time to cover delays.
Avoid cash advances (these transactions attract interest immediately and institutions are beginning to charge a higher interest rate for cash advances than is charged for other purchases)

Introductory rates & Balance transfers

Make sure you understand the terms and conditions of balance transfer and introductory rate offers such as the interest rate, the term for which the interest rate applies and what the interest rate reverts to when the term expires.
Pay it, don't park it - balance transfers can give you a break in interest rates but it is up to you to take advantage of it. Resist the urge to take on more debt while paying off a balance transfer. Instead pay more than usual as more of your payment will go towards paying the balance and you will get debt-free quicker.

Some good questions to ask about honeymoon rates are;

What is the honeymoon rate?
Does it apply to new purchases and balance transfers?
How long does the honeymoon rate last?
What does the honeymoon rate revert to when the period expires?

Credit Card Minimum Repayments

At all costs, avoid making only the minimum required payments. A small debt like $1,000 could take several years to repay and cost hundreds of dollars extra in interest charges if you only make the minimum monthly repayment. Every dollar you repay above the minimum required payment saves you both time and money.

Chart of credit card repayments

Chart of minimum credit card repayments

Credit Card Features

Additional features usually come at an additional cost either in the form of a higher interest rate, a larger annual fee or both together. Additional credit card features also include rewards programs that reward cardholders for their loyalty to their card. The more they use the card and pay off their debt, the greater the rewards they can redeem. Features such as free travel insurance, purchase protection or extended warranty can be useful credit card perks. It is always smart however to pay only for extra features you intend to use.

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