Mozo recently held its Experts Choice Credit Card Awards, where we picked out the best of the best credit cards from several categories. One of the biggest lessons we learned while doing it is that you need to choose the right kind of card for you to get the best value from your spending.
It got me thinking about the cards I carry in my wallet. Are they all still pulling their weight, or are they about as useful as the old receipts and gum wrappers they’re surrounded by?
Chances are, it’s been awhile since you thought about the value of your credit cards, right? But with the Christmas spending season just around the corner, having the right piece of plastic in your pocket could be the difference between paying hundreds of dollars extra in interest, or bagging some cool freebies and great savings.
So this Monday, get motivated and trade in your old credit card for one that will make this a very merry Christmas.
First things first…
Before you pick a new piece of plastic, it’s worth sitting down and working out a budget and spending plan for the Christmas shopping. Ask yourself:
- How much can I spend? (Hint: See our budget calculator to work it out)
- How long will I need to pay that off my credit card? (Set out a timeline with our debt repayment calculator)
Once that’s done, you can use your Christmas budget to help decide which card is right for you to maximise the value of your shopping. Here are some of our favourite options:
Earn rewards freebies
Why not use the Christmas shopping as an opportunity to build up a big pile of rewards points? Everything from pressies to Christmas lunch can go on your credit card and, on the right piece of plastic, earn you up to 3 rewards points per $1 you spend. Then, after Christmas, you can put those hard earned points toward something cool – like a Boxing Day holiday.
Good for you if: You’ve got a heap of Christmas spending ahead of you. The more you spend, the more rewards you’ll earn, so if you’re planning on spending big this Christmas, a rewards card will add extra value to your shopping.
The catch is… You really need to be able to pay your credit card bill off in full each month – that way, the cost of interest won’t cancel out the value of those hard earned reward points.
Find it: With our Rewards Revealer tool.
Pay 0% interest over Christmas
Sound too good to be true? Well it’s not. You could put Christmas on your credit card and not pay a cent in interest with a 0% purchase rate offer. Some interest free credit cards offer an introductory period where you’ll pay no interest at all for up to 15 months (just as long as you keep making the minimum monthly repayment).
Good for you if: spreading the cost of the festive season over a few months will help to ease the squeeze on your Christmas budget.
The catch is… you must be super disciplined, making sure you have a post christmas plan to pay back any balance accrued in the interest free period.
Find it: Head over to our interest free credit card comparison.
Give yourself a Christmas present of cold hard cash this year, by choosing a credit card with a killer cashback offer. Since most of these cards come with a minimum spend, there’s no better time to snag one than when you’re about to start spending big and crossing people off your Christmas gift list.
Good for you if: The minimum spend requirement fits into your Christmas budget. This minimum can range between $250 and $2,000, so if you were already planning to spend that much within the given time frame, which can be as short as 2 months, why not reward yourself for doing it?
The catch is… If you don’t meet the minimum spend, you won’t get the cashback, so it can be tempting to overspend. That’s why it’s important to work out your budget first and choose a card that matches this, not vice versa.
Find it: In our blog listing some of our top cashback credit card picks at the moment.
Read next: Changing credit cards minus the stress