Not all credit cards are created equally. And so it makes it that much harder to decide which credit card offer to choose. There are many factors you should take into consideration when deciding which offer you should apply for. Some of those factors include:
- Interest rate
- Interest free days
- Reward programs
- Annual fees
- Member benefits
Let's look at these factors separately so you can see how to evaluate which card might be right for you.
Interest Rate
If you pay off your balance every month, most likely a low interest rate won’t matter to you. But most people are not so financially disciplined with their credit cards. Most people do carry a balance from month to month.
Low interest rate credit card market in Australia is currently being hotly contested. These cards typically offer no rewards program although some have bonus partners . An interest free period on these cards is pretty much standard at between 40- 55 days, and generally have a late payment fee. Low rate credit card offers are best suited to those people who spend less than 15k per year and/or carry a balance from month to month
Balance Transfer Offers
A good way to reduce the interest you are paying is to look for a credit card with a low balance transfer rate and a low ongoing annual percentage rate. From time to time banks and credit card issuers will use a promotional balance transfer rate that is lower than the ongoing rate to attract new business. As long as you transfer your outstanding balance to a lower rate card and pay it down you will save on interest charges. Look for promotional balance interest rates that last for at least 6 months or better still for the life of the balance. For hints on how to maximise low balance transfer credit card offers click here…
Reward Programs
Most major banks and credit card issuers have card products with a choice of a rewards program. Usually rewardsoffers will have a higher annual fee than a “no frills” credit card but the rewards can be worth it if you spend big on your credit card and pay off your balance each month. If you travel a lot, then this kind of offer might be exactly what you are looking for. Some products have the option of choosing a rewards programme that allows you to earn points that can be redeemed against merchandise such as retail vouchers, IPODs, juicers and toasters.
Here is a list of some popular reward programs issuers like - American Express, ANZ, NAB, Westpac, Citibank, Commonwealth Bank, VirginMoney and GE - offer:
Frequent flyer program Merchandise such as travel and retail vouchers, jewelry, homewares Cash-back option Discounts at retail stores and petrol stations.
Annual Fees
Although rewards are great, none of these cards come without a price. Some have moderate, while others have expensive annual fees. Especially for people who pay off their balances every month, the annual fee is an important consideration. It might be prohibitive for some people, but not so for others. You should just consider if the rewards you are getting from the card outweigh the annual fee that you have to pay on your credit card.
Membership Benefits
Benefits vary on cards. Some offer travel protection, while others offer roadside assistance, shopping insurance and/or discounts. These benefits can be useful for your particular lifestyle. So, if you are selecting a credit card, it is important to weigh the pros and cons of its benefits. And it is another good idea to see if you can’t get the same benefits somewhere else for a cheaper price.
So, when selecting a credit card take all these things into consideration. Decide which card fits your lifestyle choices.
Before applying for any credit card, be sure to discuss your specific financial needs with your financial advisor. |
