| These days, life without a credit card would be hard | | | | by the due date. If you don't, be warned. You will be |
| to imagine. We have become so used to the | | | | charged interest right back to the date of purchase |
| convenience of "plastic", we don't leave home | | | | on each item. In effect, you forfeit the interest-free |
| without it. (Sound familiar?) While you can't dispute | | | | period on those purchases. |
| the ease and convenience of not having to pay in | | | | 5. Search beyond the local banks |
| cash at the supermarket, petrol pump or pub, here | | | | These days, there's a lot more choice out there - not |
| are some handy credit card reminders. | | | | just the usual local banks. Look at credit unions, |
| 1) Say no to cash advances | | | | building societies, community banks, boutique and |
| Some people just don't get it, but the bank does. | | | | online banks. Chances are you may get offered |
| The Interest-free periods offered on credit card | | | | better interest rates or lower fees than the big |
| accounts never apply to cash advances. In the | | | | banks because these new providers are anxious to |
| majority of cases, you will pay interest on the cash | | | | win business or they are non-profit organisations. We |
| right from the second you withdraw it from the ATM | | | | put this theory to the test. We tried HSBC credit |
| or over the counter. The dollar penalty can really add | | | | cards and came up with 5 different types of credit |
| up, so it's best not to do it. Ever. | | | | card. |
| 2) Watch out for Store Cards. Loyalty can cost you | | | | 6. Do you qualify for a "relationship discount"? |
| How often have you been at the cash register and | | | | If you consolidate your banking business and finances |
| asked if you would like to apply for a store card? | | | | with one lender or bank, you can qualify for a special |
| Probably plenty of times. Department stores such as | | | | treatment. Loyalty does have its rewards. You can |
| David Jones and Myer may offer you the benefits of | | | | enjoy home and personal loan interest rate discounts, |
| customer discounts, added warranties and extended | | | | term deposit bonuses, savings account fee waivers |
| credit, but they aren't cheap. Although you don't pay | | | | and of course, credit card annual fee waivers. |
| an annual fee, the interest rate can be considerably | | | | 7. Do you qualify for annual fee waivers? |
| higher (sometimes several percent) than alternative | | | | If you spend enough on your credit card on an |
| credit cards. It's fine to use them for store specials | | | | annual basis, some institutions offer to waive the |
| and loyalty benefits, but pay the balance in full by the | | | | annual fee. For instance: If your card spend is more |
| due date. In this way you avoid being whacked with | | | | than $5000-$10,000 a year, you could choose a card |
| huge interest charges. | | | | with all the benefits you want and avoid the annual |
| 3. Choose a card that matches your lifestyle. | | | | fee. However, make sure you use your card to |
| Think about your spending habits and patterns. For | | | | make purchases you were going to make anyway. |
| example: if you use a card for extended credit and | | | | Spending up big for the sake of reducing fees or |
| don't pay off the full balance each month, just a | | | | earning rewards points is false economy. |
| basic payment, choose a card with a lower rate. It | | | | 8. Sweet deals? Don't be distracted by them. |
| may not offer any interest-free period, but the lower | | | | Introductory discount rates, fabulous reward |
| interest rate should save you more dollars over time. | | | | programmes and special insurance offers. Some |
| If you use your card for everyday groceries or filling | | | | lenders offer enticements on credit cards that can |
| up the car, go for credit card with maximum | | | | make a big impression on first glance. Be practical. |
| interest-free days. Make sure you pay it off in full | | | | Look at the overall, ongoing cost of credit of any |
| each month. This way you get the benefit of up to | | | | card option. Compare the standard interest rate, |
| 55 interest-free days on purchases, as well as | | | | interest-free period and annual fees - and weigh |
| rewards, discounts and frequent flyer points. But | | | | these up against the real value (if any) of the added |
| watch the annual fees on rewards cards. | | | | extras. |
| 4. Interest-free periods are void unless you pay in full | | | | Credit cards are great. But remember that you are |
| Don't let your credit card get out of control. To avoid | | | | the one in control and responsible for your debt. If |
| paying interest on your purchases, you must pay the | | | | you can't resist a bargain or a shopping centre blitz, |
| full balance - that figure in black and white on your | | | | leave the card at home. Pay cash. |
| statement (not just the minimum payment required) | | | | |