Credit cards are back with a vengeance. Monthly purchases reached a record high of $33.5 billion in January, according to the latest report from the comparison site Finder. There are more than 13 million credit cards in circulation, with one in four Aussies admitting they can’t manage their finances without one.
While misuse and mismanagement of a credit card can lead to a downward spiral of indebtedness, there are some things you can do to avoid the fees and stay in the black. Banking rules introduced in 2019 are designed to curb over-borrowing, with tighter rules on credit limits, balance transfers and charges.
Despite these, many users can be caught out by living well beyond their means: only 8% of respondents in a Finder credit card survey said that their application had been rejected.
If you are thinking of getting a new card, here are some factors to consider to help pick the right one.
Have you calculated the fees?
Once upon a time, credit cards charged a flat annual fee that you had to pay regardless of how often you used them. With stiff competition from buy now, pay later (BNPL) schemes, the big four banks have launched a new type of card that rides off the BNPL model.
This story is from the May 2023 edition of Money Magazine Australia.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the May 2023 edition of Money Magazine Australia.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
An outrageous, beautiful monopoly
Telstra's mobile business is a cash machine with few competitors, giving it the highest returns in the world.
Drop the anchor to judge value
Buying and selling decisions should be based on where a stock price is going, not where it has been.
Powering the AI boom
Beyond the software and chipmakers, where will the energy come from?
Get into life
Tucked inside super are products that can protect you from life's inevitable uncertainties.
Paths to home ownership
Taking the road less travelled can sometimes deliver unexpected benefits.
Sold! Quick ways to add value
Small, strategic changes can have a big impact on the look and feel of your home. And get you a better price on auction day.
Money lessons the kids need to know
Your children can learn a lot from your past money mishaps. Here are eight financial conversations I have had with mine.
Property-investing rules: are they likely to change?
The pressure for the government to curb the tax benefits of tax concessions, such as negative gearing and the capital gains tax discount, is unrelenting. Most recently, independent senators David Pocock and Jacqui Lambie proposed five options for paring back investment property tax concessions, with savings to the Federal budget of up to $60 billion over the next decade.
What's love got to do with it?
A rollercoaster of emotions could be driving poor crypto behaviour.
Are we ready to be cash-free?
Saying goodbye to our piggy banks too soon could leave small businesses in the dark when problems arise.
