5 Tips to Avoid Overspending on Your Credit Card

Many people use credit cards for different reasons. Some use their card to buy major purchases while others find it convenient to shop online or book a trip if they have a credit card. The best credit card deals also offer a range of rewards and discounts which can be beneficial to you. However, having a credit card comes with a big responsibility. If you’re not careful, you may end up overspending and have to deal with huge debts, not to mention the high interest.

How can you avoid overspending on your credit card? Here are five tips to consider:

1. Know the features of your credit card

Make sure you are aware of your due dates, cut-off periods, and interest rates. This will help you better manage your spending. If you’re planning to get a card, make sure to compare credit cards from different banks and choose which best suits your needs and lifestyle.

2. Leave your card at home

Marketing tactics can sometimes be stronger than our willpower to resist the temptation of buying things that we don’t really need, so it is best to leave your credit card at home. Bring it only if you have a planned purchase such as grocery, appliances, or to book a trip.

3. Consider cash as the only option

If you don’t have cash, that means you cannot afford it or you don’t really need it. Don’t treat your credit card as an extension of your purchasing power.

4. Think about your current balance, not your card limit

Do not use up your credit limit only because it’s there. To avoid overspending, keep your current balance in mind. This can greatly influence your spending habits. You can also set your personal credit limit that’s way lower than your available limit.

5. Keep track of your spending

Be a responsible credit card holder by monitoring your expenses. There are many financial institutions that offer apps which you can download to help you in tracking your spending wherever you go. If you’re up-to-date, you’ll know when to stop using your card and when to pay your outstanding balance.

Having a credit card is not a bad thing, but it takes a lot of self-control so you don’t go overboard with your expenses. Don’t max out your credit card. Keep these simple tips in mind so you can avoid overspending on your credit card.

Do you have other tips on how to avoid overspending on your credit card? Share your ideas in the comments section.

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Common Credit Card Fees and Charges

Many Australians use credit cards as an alternative to cash when purchasing certain items and/or availing various services. Different banks in Australia offer a wide range of credit cards which vary in a lot of features. One way to know which is the right one for you is to compare credit cards. This will greatly help you find out the pros and cons of each card, enabling you to have a well-informed decision.

When looking for the best credit card deals, it is important to learn about the common fees and charges involved. These will depend on the type of card that you have but in general, be aware of the following credit card fees and charges:

  • Annual fee – this is the yearly fee that is usually charged upon activation of your card
  • Purchase interest rate – this is the interest rate when you make a purchase
  • Balance transfer fee – you will be charged when you transfer your balance from the credit card of another bank to your card from a different bank
  • Cash advance fee – you will pay this fee when you withdraw cash or make cash equivalent transactions from your card
  • Late payment fee – you will pay this charge if you fail to make the minimum payment on or before the due date for a certain month
  • Replacement fee – this is the charge in case you lost your credit card
  • Over the limit fee – this is the fee when you go over your card limit
  • International transaction fee – you will pay this fee if you use your card to make purchases when you’re overseas
  • Foreign currency cash advance fee – you will pay this fee when you withdraw cash from your credit card when you’re overseas
  • Foreign currency conversion fee – this is the charge when you use your card overseas or make a purchase online that comes from a different country

These are the common credit card fees and charges. Again, these vary depending on your bank and the type of credit card that you use. That is why it is essential to compare credit cards so you will know what to expect as far as fees are concerned. While you cannot completely avoid some of them, being aware of what comes with a fee will help you better manage your monthly payments.

Got other tips on how to get the best credit card deals in Australia? Share your ideas in the comments section.

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Is Lounge Access Really Important When Choosing a Credit Card?

There are a number of credit cards that provide airport lounge access. An airport lounge is provided by an airline or independent owner offering an area where people can meet, rest, or work in a quiet and peaceful environment outside of the hustle and bustle of the airport.

The lounge usually provides its guests with high speed internet connection, phones, TVs, fax machines, complementary drinks and beverages as well as a host of other services. Some airport lounges even provide massages and showers. There are different ways that you can gain access to an airport lounge, such as flying as an elite frequent flyer, flying in premium cabins, purchasing a lounge program membership or a day pass. Another common way that people can gain access to the airport lounge is by holding a credit card that provides such services.

Do I need lounge access?

Lounge access is only going to benefit you if you make frequent trips. If you travel once or twice a year and you want to have lounge access, you should take advantage of a lounge access day pass. If you are a regular domestic traveler, it might even be beneficial for you to pay the annual fee on an eligible credit card for lounge access.

Which Credit Card Provides Lounge Access

Before submitting an application of a credit card that provides lounge access, you should compare features of different credit cards and make sure that you are getting the best deal.

City Prestige Visa Infinite

If you travel frequently with more than one person, this credit card waives the fee for an additional guest. You will have access to airport lounges all over the world including Dubai, Hong Kong, Paris, Bangkok, London and many more.

Diners Club

No matter which club card you apply for, you will have access to more than 500 lounges worldwide through Diner’s personal network. All of the participating lounges are available on the Diners Club’s website.

ANZ Black Card Frequent Flyer

ANZ provides its frequent flyer black card holders with unlimited access to over 60 airport lounges around the world. One of the most prestigious airport lounges available to ANZ card holders is the Auckland New Zealand Emperor Lounge.

Westpac Altitude Black

Westpac card holders are eligible for two free visits to the airport lounge in Sydney no matter what airline you are travelling with.

Final Thought

It is not essential that you choose a card that offers lounge access; however, if you travel regularly and you want to reap the benefits of an airport lounge then start looking for the best credit card deal that provides you with lounge access.

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3 Benefits of Not Using Your Credit Card for 12 Months

Australians use different payment methods. While paying in cash is quite common, the use of credit cards has also become a go-to way to pay for products and services in Australia. In fact, there are studies which reveal that credit card debts, together with personal loans, are beginning to get out of control. Credit cards have made it very convenient for people to spend money that they don’t have. As a result, some people find it hard to get out of credit card debts. Of course, it helps to compare credit cards from different banks as they come in various features. So it pays to do your research to get the best credit card deal.

But what if you stop using your credit card for a year? For some, this may be easy, but for others, it will entail planning, budgeting, and a change in mindset. Not using your credit card for 12 months can in fact be beneficial. Here are the three benefits of stop using credit cards:

You can get discounts

The mere act of using cash for payments on various products can offer certain discounts, which you probably won’t get when using your credit card. In general, all you have to do is to ask if you can save some money just by paying in cash. There is usually a credit card fee of up to 4% of the purchase price, so not using your credit card for a while could possibly lead to more discounts for your purchases.

You can be debt-free sooner than expected

If you prefer to use your credit card instead of cash for payments, chances are that you’ll have more debts and if you’re not careful, you may end up paying huge monthly repayments. This wouldn’t be a problem if you can afford to pay in full every month. By not using your credit card for 12 months, you could possibly pay more than the minimum repayment per month. Later on, you will be able to pay in full and before you know it, you’ll be able to get out of debt much faster.

You can save money

A lot of people have this mindset that a credit card is an extension of your cash. Sure, you will be able to buy what you want but the problem is that people tend to spend money that they don’t have. If you stop using your credit card for a year, you can get out of debt more quickly, enabling you to allot more money to your savings.

Do you know other benefits of not using your credit card for a year and how to compare credit cards in Australia? Share your ideas in the comment section.

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5 Things to Check Before Choosing a Credit Card

Before anything else, the first question to ask yourself is, “Should I get a credit card?” Getting a credit card comes with certain responsibilities, so it pays to think long and hard why you should get one. One of the benefits of having a credit card is it can greatly help you build your credit record, which is then important for when you need to get a loan in the future. It is also an important tool in case of an emergency when cash is not readily available. However there are some disadvantages, the main one being that you can get into debt very quickly because you are spending money that isn’t yours. You will have to pay this money back, usually at a high rate of interest, so a credit card could end up costing you a lot of money.

Should you decide that you need a credit card, here comes the second question: How can I pick the best credit card for me? Here are five things to take into account:

  1. Determine the Annual Percentage Rate (APR)

As much as possible, it is essential to pay your balance in full. Otherwise, you will have to deal with the Annual Percentage Rate. This is the interest rate that you need to pay on top of your actual balance. There are several banks that offer lower or zero interest rates for the first few months or year. Check what the APR is when looking for card options. In general, the lower the APR, the better. However, some banks provide interest rates according to your credit score, so it is best to check with the bank if they offer fixed interest rates or not.

  1. Be familiar with the fees

One of these is the annual fee. Some banks charge an annual fee, others don’t. But before you lean towards those that do not require it, make sure to check the fine print. While it would be great not to pay a fee for every year that you’re using the credit card, the rewards and perks of cards with an annual fee generally more than make up for it.

Another fee to consider is the foreign transaction fee that you pay for when you use your card overseas. Take note that not all banks charge this fee for every dollar you spent when in a different country.

You also need to look at the balance transfer fee or the amount you pay when you move your balance from one credit card to another. At first glance, this is a benefit since you can transfer balances to the card that offers a lower interest rate, but the balance transfer fee may be higher than if you opt not to transfer.

  1. Know the credit limit that you can handle

If it’s your first time to get a credit card, it may be wise to have a lower credit limit. It can help you get used to spending with a credit card, plus it can teach you a thing or two about managing debt. Once you’ve learned how to manage your finances and spending habits, you may increase your credit limit. Having a higher credit limit has its benefits, too. For instance, it can eventually help you in establishing a good credit score, provided that you keep your monthly balance lower compared to your actual credit limit. Of course, do not get a card with a credit limit that allows you to have more debt than what you can actually pay off.

  1. Check the rewards program being offered

This is probably one of the major deciding factors when choosing a credit card. Every time you use your card, you will earn points which can then be used in exchange for different types of rewards. One way to determine the best credit card for you is to know the rewards that suit your lifestyle. Do you love to travel? You can pick the credit card that offers travel vouchers and discounts on airfare and hotels. If you’re into shopping, there are rewards programs that feature discounted prices on online retail stores, supermarkets, and other shops.

  1. Know if you can manage your account online

In this day and age when most transactions can be done through laptops and smartphones, it is best to pick a credit card from a bank that offers a range of online capabilities that will make account management more convenient. You can do automated transfers and online payments. You can also easily view your account, helping you keep track of your balance.

Final Thoughts

Choosing the best credit card for you can be daunting at first. There are several factors to consider and sometimes, this takes some time. Assessing your spending power, lifestyle, and preferences can greatly make the selection process easier. These five things to check when choosing a credit card are likewise helpful so you can make the right decision.

Having problems in choosing the right credit card for you? Share your comments below.

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What to look for to find the best credit card deals in Australia

If you need a credit card or can justify the convenience of using one, then you probably want to search among the best credit card deals available in Australia.

Credit cards in Australia can appear to be fairly similar in terms of benefits, interest rate and fees. However, there are some slight variances that can make one card more suitable than another. The best deal will ultimately depend on your situation. Here’s a list of things to look for.

Costs

Interest rate

If you always pay your credit card off each month, then the interest rate is irrelevant. Focus on getting a low annual fee or more benefits. If you have a large debt, ask your bank to reduce your interest rate. They will be more cooperative if you threaten to switch to a competitor offering zero interest on balance transfers.

Annual fee

Annual fees are routinely waived by banks as a signup and retention tool; the catch is you have to ask for it yourself.

Merchant charges

Most business do not charge to process Visa and MasterCard transactions, but charge a 1-2% fee for other card brands. The additional ‘benefits’ of using these cards is only worth it, if ever, with a high annual spend.

Overseas transaction fees

Standard cards charge a 1-2% overseas transaction fee, and around 2% spread on currency conversion. If you travel regularly, then it could be worth having a specific travel card which doesn’t charge these fees.

Benefits

Generally, the more benefits, the great the cost of a credit card. However, if you can avoid paying interest and fees, then card benefits can be a nice bonus.

Reward points

Rewards cards give you points for every dollar you spend. The rate you accumulate points at will depend on the cost of your card. Big banks have their own rewards programs. Otherwise airline or supermarket programs can work depending on where you spend your money.

Travel insurance

Travel insurance covers medical expense and lost belongings on international trips. Travel insurance is inexpensive, unless you travel a lot or intend to Heli ski in Antarctica. It’s only a benefit if you aren’t paying for the card!

Extended warranty on purchases

These programs either extent the warranty or offer short term cover for items purchased on the card.

Concierge

A concierge is available to book events or make purchase on your behalf.

Dining or airport lounge passes

Airline rewards credit cards may come with airport lounge passes. Some credit cards offer discounts or bonus when used at partner restaurants.

The best credit card deal is a balance between these cost and benefits, and depends on how you will use the card. Remember a credit card is simply a way of accessing money, not a show bag.

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