Credit cards: choose the right one for you

Australians are expected to spent $27 billlion on their credit cards in December alone, up from $26 billion for the same month last year.

With that kind of money going on the national chit, smart consumers can benefit by choosing a credit card tailored to match their particular needs.

Comparison website has identified six credit card user categories and the group’s Michelle Hutchison  says consumers can save by thinking about where they fit in and looking for a good deal.

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Sales Splurgers: If you’re planning to splurge this sale season and pay it off later, then you should compare cards with no interest on new purchases to save on interest while you’re paying off your debt slowly.

There are 52 cards offering 0% interest on all of your Christmas shopping for up to 15 months so you can pay it off slowly without the interest sting.

Just in case I run out of money: If your credit card is just a backup plan and if you use it and you plan to pay the bill as soon as it arrives, look for cards with no annual fees.

These cards often come with higher interest rates but it won’t matter if you pay it off on time.

Big Spenders: A rewards program could be a good idea if this season is one of your many shopping expeditions of the year.

Look for cards with the highest points per dollar and complimentary services to make your spending go further.

There are also lots of cards offering up to 80,000 free points on sign up, but watch out for the annual fees and interest rates which can be  high on these cards.

Rewards Points Hunters: If you love to be rewarded for your shopping but you’re far from a millionaire, then you should look at the cheapest cards that will give you some value back in rewards points.

Compare rewards cards with the lowest annual fees to get the most bang for your buck.

But make sure you pay off the balance in full each month or the annual fee and interest could outweigh any return on the rewards points.

Overseas Travellers and Online Shoppers: if you’re planning an overseas trip soon or doing some shopping online from international retailers, it’s worth looking into cards with no fees like currency conversion and overseas transaction fees.

There are also prepaid travel cards allowing you to load up to 10 different currencies and lock in the exchange rate before you leave.

This can be handy if you’re traveling and  think the dollar will fall when you’re away.

Already Carrying Credit Card Debt: For those who already have a debt or expect to run one up over the holiday season, it would be worth checking out balance transfer cards.

There are now 112 cards currently offering no interest for up to 18 months if you transfer your old debt to their card.

Just ensure you pay off the debt during the promotional period as some cards will revert to much higher interest rates of up to 21.99 percent.


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