How to have an interest free Christmas
"Christmas is coming and the goose is getting fat
Please put a penny in the old man's hat
If you haven't got a penny then a ha' penny will do,
If you haven't got a ha' penny then a credit card will do."
In an ideal world, we would have all saved up for our Christmas spending, foregoing any need to borrow. Alternatively in an eco-friendly-carbon-offsetting-it's-the-thought-that-counts world, we'd all make our own Christmas presents, grow our own geese and barter with our neighbours for anything else we didn't have. In the real world however, most people end up spending a fair bit more than a ha' penny and this is usually beyond their means. If you are so inclined, there is still time to put in place a realistic Christmas savings plan and stock up on yarn while you frantically read through "knitting for dummies". If on the other hand, you are a patriotic member of the masses stuck in the real world and are destined to go into debt to pay for Christmas 2007, the most practical advice is simple: "borrow cheaply".
The lion's share of this debt will be shifted by the personal finance juggernaut, the credit card. By the time the stores open for the Boxing Day sales, there will be approximately 14 million personal credit cards in circulation across Australia. Placed end to end, they would span 1,190 kilometres or roughly the distance from Sydney to Hervey Bay. Reported spending on cards so far this year (meaning January - August 2007) is up 9% on spending over the same period last year and if this is any indication of things to come, then by the time the dust settles on this silly season (November thru January), more than $50 Billion will have been spent on credit cards.
When it comes to borrowing money at a low rate, you'll be hard pressed to find a better deal than 0% (maybe in yet another world where you can borrow money and the lenders pay you interest instead of the other way around). RateCity has scoured the Australian financial landscape to find the few credit cards with a 0% introductory offer on purchases. This means that for the first 3-6 months that you have the card, all purchases accrue interest at 0% before the card reverts to its normal rate. This should give you enough time to pay off your Christmas debt without having to pay any interest. At the moment there are plenty of credit cards on the market that offer 0% introductory rates on purchases but there are even more with other low intro rates.
| Company | Product | Card Intro Rate | Card Intro period | Regular Interest Rate | Annual Fee | Apply |
|---|---|---|---|---|---|---|
| ANZ Bank | First | 0.00 % | 6 mths | 18.24% | $30 |  |
| ANZ Bank | Frequent Flyer Visa | 0.00 % | 6 mths | 19.59% | $40 |  |
| ANZ Bank | Gold | 0.00 % | 6 mths | 18.24% | $87 | |
| ANZ Bank | Low Rate MasterCard | 0.00 % | 6 mths | 12.74% | $58 | |
| BankWest | Zero MasterCard | 0.00 % | 4 mths | 13.99% | $0 | |
| Westpac | Altitude Gold/MasterCard | 0.00 % | 3 mths | 19.60% | $150 | |
| Westpac | Altitude Platinum/MasterCard | 0.00 % | 3 mths | 19.60% | $295 | |
| Source: www.canstarcannex.com.au *ANZ offer expires 9/12/2007 | ||||||
There is still time to get your 0% introductory card in the mail before the Christmas shopping frenzy begins. You can apply for the card you want online and most people receive their card within two weeks.
You should remember that while these loans are technically temporarily interest-free, they do have to be repaid and for it to be truly interest-free, the debt needs to be repaid before the introductory period expires. Well til next time, I recommend glazing that goose but do remember to spend smart and borrow cheaply.
How do I compare credit cards?RateCity is the best website to shop around on for all credit cards, as well as most other financial products. At RateCity, you can use expert comparative data from CANSTAR CANNEX, Australia's leading financial research and ratings firm. CANSTAR CANNEX has analysed and evaluated hundreds of financial products to award five stars to only the very best. The CANSTAR CANNEX star ratings go much further than just looking at interest rates. They also take into account important features so you can be confident you are getting the best product.
Use our easy search tools to compare credit cards at RateCity.
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