Credit Cards

Avoid cash advances

Interest-free periods offered on credit card accounts do NOT apply to cash advances.

In most cases, you will pay interest on that cash right from the time you withdraw it.

ANZ cardholders pay a bigger penalty - a fee of 1.5 per cent of the withdrawal. That's $15 straight off on a $1000 credit card cash advance.

Choose a card that matches your financial situation

Make sure that the credit card you use is the most suitable for your spending patterns.

If you are using a card for extended credit and don't pay off the balance in full each month, choose a card with a lower rate. It may not offer any interest-free period, but the lower interest rate should save you more in the long run.

If you use your card for the convenience of paying for everyday purchases such as petrol or groceries, try a credit or charge card with maximum interest-free days, then make sure you pay it off in full each month. This way you get the benefit of up to 55 interest-free days on purchases, and buyers' rewards, discounts and frequent flyer points.

Better still, try a debit card that charges no interest but debits your savings account direct for your purchases.

Check out our credit card selector to find cards that suit your needs.

Don't be distracted by sweeteners

Many lenders offer credit cards that include introductory discounted interest rates, rewards programs and insurance.

Make sure you look at the overall ongoing cost of credit of any card option you consider and weigh this up against the real value (if any) of the added extras.

Interest-free periods don't apply unless you pay off in full each month

If your credit card offers 'interest-free days' understand that in most cases you get no interest-free period on purchases if you have an outstanding balance on your last statement. When your monthly statement arrives, you must pay the balance off in full (not just the minimum payment required) before you will get any interest-free period on CURRENT and FUTURE purchases.

On some cards, the penalty is even worse. If you have an outstanding balance not paid in full by the due date, you will be charged interest right back to the date of purchase – thus forfeiting the interest-free period on those PAST purchases.

The bottom line is: avoid paying interest on your credit card by paying the full outstanding balance on your statement by the due date.

Loyalty can cost you

Store cards such as David Jones and Myer may offer benefits of convenience, discounts, added warranties and extended credit, but aren't cheap.

Although these cards don't charge annual fees, the interest rate can be up to seven percentage points higher than alternative cards. Shoppers should therefore use them for specials and loyalty benefits, but pay them in full by the due date to avoid being whacked with high interest charges.

Maintain card security as fraud grows

The instances of ATM and credit card fraud are on the rise, as latest disturbing news reports reveal.
Tridential has compiled the following tips to help avoid becoming a victim:

• don’t let anyone swipe your card twice without giving you a ‘transaction cancelled’ receipt for the first swipe – card ‘skimming’ is growing where fraudsters swipe cards through a second machine to record details.
• Be on your guard when withdrawing money from ATMs - if anything seems out of place with the machine or people around you, don't transact.
• Hang onto ATM receipts as proof of your transactions.
• When buying over the Internet, deal only with reputable online merchants whose sites offer full security (check the padlock sign at the bottom of your web browser)
• don't send card details by e-mail, your details are not secure (if you must, send half your card number through in one email, the rest in a second message)
• Avoid paying by credit card over the phone or by mail order. If you must, only give card details to established companies with a verified physical address.
• keep your card in sight at all times to ensure no-one copies your card details.
• don’t store copies of your password or security number with the card
• beware letterbox thieves – arrange to pick up new or replacement cards from your branch rather than have it sent through the mail
• check statements closely each month and report any unauthorised transactions to your bank immediately
• read correspondence from your bank before discarding it – it may contain important card account information and not just marketing material

Online transactions are cheaper

Pay bills, check balances and transfer money between accounts using online banking. These transactions are significantly cheaper over the internet than over the counter - and far more convenient.

Online transactions are convenient

Online banking allows you to do your banking whenever you want, not when the bank wants to open for business. Internet banking websites offer 24-hour, 7 days a week access to pay bills, check balances and transfer money between accounts, even apply for a new account. Best of all there are no queues.

Use a debit card instead

The safest form of card is not a credit card at all, but a debit card which offers all the convenience of paying with plastic. A debit card links to your savings account and debits it to cover the costs of purchases. Some cards can act as both a debit and a credit card.