Considerations
When Looking for a Credit Card
Traditionally, credit cards have been issued by the major
banks. Now smaller lenders have shaken things up by breaking
on to the market.
They have been able to pass on their lower costs to the consumer
with lower cost cards.
Today most consumers prefer low annual fees and interest-free
days when looking for a credit card. You should choose according
to your spending pattern and ability to repay. Things you
should consider when looking for credit cards are:
* Low interest rate
* Low annual fee
* Number of interest free days (preferably 55+)
* Learning how to avoid penalty fees, charges and interest
* Loyalty/Rewards programs
* Money back credit card offers
Naturally there are a number of pros and cons with credit
cards. Here are a few of them -
Pros |
Cons |
* They offer flexibility and convenience
* You can make payments over the phone and internet
* They are accepted worldwide
* Some offer rewards programs
* You can pay them off quickly if you want to
* You don't have to carry cash around
* You aren't liable if someone defrauds your card |
* Some cards have high interest rates
* Fees and penalties can be high
* They are expensive for long-term borrowing
* Cards with loyalty schemes are often expensive
* They can be expensive if you don't pay the balance
off in full |
If you want to borrow a large amount and pay it off over
a long period of time, credit cards are not the ideal way
to go. Loans usually offer better rates. But for sheer convenience
and flexibility, it's hard to beat the plastic.
If you need help finding a credit card that suits your needs,
have a look at each of our sections. We recommend a number
of different Australian cards, whether they have a low
interest rate, no annual fee,
low balance transfer
rate or reward schemes.
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