Credit Card Australia, How To Minimise Your Debt

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Do you like to shop till you drop? Here are some tips about how to manage your debt and how to get the card that fits your spending style.

We all love to spend. It is just human nature.

And we love the hassle free cards. No need to carry money. No need to count and think if there is enough for the next day.

Easy to swipe or just wave and rush to the next task or... shop.

But it comes with a hefty price.

Unless you know how to manage and make the most of it.

Credit Card Australia - What Type of Buyer Are You?

  • Are you an impulse buyer?
  • Do you respond to promotional offers?
  • Do you have to have that bargain, whether you need or not?
  • Do you love swiping your card and forget checking how much you owe?
  • Are you paying back just the minimum amount shown on your monthly statement?

If you replied yes to most of the above, search for low rate credit cards and go for the lowest possible you find.

Don't worry about interest free days because they wouldn't apply to you. If you don't pay your card in full every month there's no interest free period.

Don't go for rewards. If you spend a lot you may get them, but they will cost you a lot more than you think, because of all the interest that will come out of your pocket.

But you may be different:

  • Are you disciplined and pay your debt in full every month?
  • Can you afford to shop and shop again, and still pay off your debt month after month?

If so, ask your bank for a rewards credit card and take advantage of all those shopping offers or flying points.

But beware. The better the rewards, the higher the annual fee of the card. So check the fine prints, have a look at the rewards offers and calculate whether their value would be higher than the annual fee.

If yes, by no means, go for a rewards card. If no, don't bother as those points that you accumulate may expire and you may lose some of them before their value exceeds the annual fee.

Credit Card Australia, How to Reduce your Costs

Here are our tips to help you enjoy more of your credit card.

  • Pay the credit card in full every month.
  • If you can't pay it in full, then pay more than the minimum amount shown on the statement.
  • Set an automatic payment plan to pay the card in full (or the maximum you can afford) so that you don't forget.
  • Shop for your big items at the beginning of the statement period to benefit from the maximum number of free interest days.
  • Don't withdraw cash from an ATM. Ever. In most cases you'll pay a higher interest plus a withdrawal fee. The interest free period will not apply to cash advance. But if you have no choice and really must grab the cash, then  repay the amount as quickly as you can.
  • Don't fall into the trap of paying for your shopping by credit card and saying yes when the shop assistant asks whether you want cash out. It's as if you were withdrawing from the ATM.  
  • Transfer your balance to a card with a lower rate. There are a lot of balance transfer credit card offers on the market. They give you a promotional period with very low interest rate. Make no mistake, when that period is gone, the interest goes up to much higher rates than usual. So pay in full before that period  expires.  
  • If you have a rewards credit card that offers free travel insurance, use it to pay for your flights. You will save big on insurance. But check that the cover you get is what you need. 
  • Check your statements every month and if you see an item  that shouldn't be there, ring your bank.
  • If you have a store card and go with a finance free option, divide the total amount you owe to the number of months in the finance offer, add the monthly account fee and pay the resulting amount every month. If you do this, you will avoid being hit with a massive interest bill at the end of the finance free period.

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