Research reveals the costly credit card mistake most Australians are making

Credit cards can be a powerful financial tool, but they can also be a source of unnecessary expense if not managed wisely.

According to recent research by comparison website Finder, Australians are collectively losing billions of dollars by making this simple mistake.



The new study reported that sticking with your current credit card providers instead of shopping around for better deals is costing Australian consumers.

The average credit card holder could save approximately $222 over two-and-a-half years by simply switching cards.

With over 13 million credit cards in circulation in Australia, this equates to a staggering $1.3 billion nationwide.


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According to Finder, Australians are losing $1.3 billion over a two-and-a-half-year period by remaining loyal to their credit card providers. Image source: rupixen.com/Unsplash



Amy Bradney-George, Finder’s Credit Card Expert, warned that many Australians are missing out on better deals due to credit card loyalty.

'Australians are feeling the pinch with the cost of almost everything on the rise,' she said. 'Credit cards are often one of those things we “set and forget”—and it’s costing us.'



Credit card interest rates in Australia range from around 8 per cent to 27 per cent, meaning some people could pay significantly more for a small balance.

Conversely, for those who consistently pay off their card, introductory offers can provide hundreds of dollars of value when you get a new card.

However, Ms Bradney-George cautioned that the cost of annual fees can add up if you’re not careful.

Credit card interest rates and fees can be a minefield for the uninitiated. The interest rate, often referred to as the Annual Percentage Rate (APR), is the cost you pay each year for borrowing money, and it's calculated as a percentage of the amount you owe.

There are also various fees associated with credit cards, including annual fees, late payment fees, cash advance fees, and foreign transaction fees. These can quickly add up and make your credit card more expensive than it needs to be.



The key to avoiding unnecessary costs is understanding how these rates and fees work and choosing a card that suits your spending habits and financial situation.

For instance, if you regularly pay off your balance in full each month, a card with a high interest rate but great rewards might be a good fit.

On the other hand, if you often carry a balance, a card with a low interest rate might be a better choice.

While credit cards can be a source of unnecessary expense, they can also offer various advantages if used responsibly.

'Credit cards can be a great tool for earning rewards such as frequent flyer points and for building your credit history,' Ms Bradney-George said.

However, she warned against relying too heavily on credit, which could lead to a debt spiral that takes months or even years to escape.

'Make sure you’re only spending what you can comfortably afford to pay off in full each month,' she stated.



Finder's experts have analysed rates, fees, rewards, and offer details for 270 credit cards from 82 banks and brands in its database.

They found the Virgin Australia Velocity Flyer Card to be the best balance transfer credit card, offering a 0 per cent balance transfer interest rate for 24 months, with no balance transfer fee and no annual fee in the first year (then $129 per succeeding year).

For frequent flyers, ANZ’s Frequent Flyer Black card was found to be the best for Qantas, while Virgin Australia’s Velocity High Flyer Card was best for Velocity points.

The Bankwest Zero Platinum Mastercard was named the best travel credit card, while the ANZ Rewards Black Credit Card was the best rewards credit card.

In conclusion, while loyalty to a credit card provider might seem like an easy option, it could be costing you hundreds of dollars.

By taking the time to understand your spending habits and researching the best credit card options for your needs, you could save a significant amount of money.

Key Takeaways
  • Australians could save money by switching credit card providers, with potential savings of $222 over two-and-a-half years.
  • The total potential savings for credit card users in Australia could add up to approximately $1.3 billion.
  • Finder's credit card expert emphasised that consumers often 'set and forget' their credit cards, which can be costly in the long run.
  • The research by Finder considered 270 cards from 82 banks and identified specific cards that offer the best deals for balance transfers, frequent flyer points, travel, and rewards.

What are your thoughts on this, members? Are you making this costly mistake with your credit card? Let us know in the comments below!
 
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Yes some cards do have annual fees and you can source a card without annual fees!
BUT there is never a reason to pay interest charge!
Once again this is simple!
Only spend what you can afford to pay off in full each month then you will never pay an interest charge.
Have been using a credit card for over 40 years and have never paid 1c in interest.
If you over spend then don’t complain about the interest rate!
 
Yes some cards do have annual fees and you can source a card without annual fees!
BUT there is never a reason to pay interest charge!
Once again this is simple!
Only spend what you can afford to pay off in full each month then you will never pay an interest charge.
Have been using a credit card for over 40 years and have never paid 1c in interest.
If you over spend then don’t complain about the interest rate!
Congratulations on that but it reminded me of an interesting fact. Paying via credit card is convenient, the fact that you have never paid 1c in interest is amazing but did you know that every dollar you spend via your credit card means that you have paid between 2 and 5% of your purchase in fees to the credit card provider which is paid from the supplier direct to the CC supplier. Sometimes by offering cash to a supplier they are inclined to give you a discount of some type which means that if you might spend $10,000.00 per year on your card (not much really), there is a potential of saving a minimum of $300.00 per annum depending on your negotiating skills up to "the sky's the limit".
 
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Yes some cards do have annual fees and you can source a card without annual fees!
BUT there is never a reason to pay interest charge!
Once again this is simple!
Only spend what you can afford to pay off in full each month then you will never pay an interest charge.
Have been using a credit card for over 40 years and have never paid 1c in interest.
If you over spend then don’t complain about the interest rate!
Likewise.
And especially at Christmas time I don't understand why people run up credit card debt buying presents they can't afford and spend years paying it off. Then add to it the following year. There is no point to that. These endless cycles need to stop.
 
Here is an interesting statistic. Nigh on 12 million people in Australia have caught Covid-19. 13 million credit cards are in use in Australia. Perhaps the chip on credit cards is designed to release C-19 as part of the anti-vaxxers' idiot fantasy that our desire for vaccination is designed to enable our mind-control by a cabal of people who want to control the world.

Keep laughing, Dear Readers; it's Australia and we are standing in it.
 
I wont have a credit card, to much temptation, if you can't afford it don't buy it, except for buying a house or car, a lot of people use their credit cards and go over their heads and find its hard to pay of, so NO credit card for me.
 
Ditched the credit card long ago. If you haven’t got the money in the account don’t buy it until you do. Debit card there is no bill at the end of the month
 
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I have the platinum bankwest zero card and pay it off in full every month...never paid interest in my life! If you live within your means anyone can do the same.
 
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Yes some cards do have annual fees and you can source a card without annual fees!
BUT there is never a reason to pay interest charge!
Once again this is simple!
Only spend what you can afford to pay off in full each month then you will never pay an interest charge.
Have been using a credit card for over 40 years and have never paid 1c in interest.
If you over spend then don’t complain about the interest rate!
agree
 
I went into the Finders link and AVAST came up with threat url blacklist. Has anyone else experienced that?
 
Yes some cards do have annual fees and you can source a card without annual fees!
BUT there is never a reason to pay interest charge!
Once again this is simple!
Only spend what you can afford to pay off in full each month then you will never pay an interest charge.
Have been using a credit card for over 40 years and have never paid 1c in interest.
If you over spend then don’t complain about the interest rate!
It comes down to planning...... on average I have a balance of $642 if I paid off at the minimum it would take me 3 years to pay off.. I pay mine automatically.. don't pay a cent interest. I wonder how much others pay....
 
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It comes down to planning...... on average I have a balance of $642 if I paid off at the minimum it would take me 3 years to pay off.. I pay mine automatically.. don't pay a cent interest. I wonder how much others pay....
Once again I totally agree with you.
The problem people overspend, have multiple cards maxed out then complain they have to pay 20% interest..
 
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Once again I totally agree with you.
The problem people overspend, have multiple cards maxed out then complain they have to pay 20% interest..
I am the same...pay in full. Living beyond peoples' means is the problem these days They even put holidays on credit and are paying for it long after the thrill of the holiday is over. I personally could not live like that. If I don't have the money I would not go until I did.
 
Once again I totally agree with you.
The problem people overspend, have multiple cards maxed out then complain they have to pay 20% interest..
20%. I'd love to see that.. CBA currently 26%
 
20%. I'd love to see that.. CBA currently 26%
I remember asking my step daughter many years ago (when my husband and I had to bail her out after she had too much on her credit card) did she know what interest rate she was paying. She did not have a darn clue. Financial literacy should be taught at school before they leave to get their first job. Budgetting should be taught as well. The kids are not learning it from their parents it would appear so someone has to step in. Kids today see their parents pay everything with a card or phone and have no earthly idea of money at all or how hard you have to work for it. Must think it grows on trees.
 
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