Research reveals the costly credit card mistake most Australians are making
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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.
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.
What are your thoughts on this, members? Are you making this costly mistake with your credit card? Let us know in the comments below!
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.
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.
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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