Credit card news and advice

Used to consider yourself a bit of a credit card rewards points guru? Dedicated your time to gathering up points with every purchase and then spending them on overseas holidays and flight upgrades?  Boy, doesn’t that seem like a thing of the past. The truth is, when it comes to travel there are a lot of unanswered questions. While vaccines have just hit Aussie shores, it seems like we are still a fair way away from international travel being an option for a trip away. So the question is: are rewards credit cards really worth it in 2021 without overseas travel? Our answer - they can be. 

In December 2020, CommBank launched its interest-free credit card Neo with the hopes of reeling in younger Aussies who feared the classic credit card. And according to recent figures from the major bank, they’ve managed to knock that task out of the park. CommBank found that one third of all credit card approvals in December were for the Neo interest-free credit card, while the bank notes that more than half of the card’s uptake alone, came from millennials. A quick recap: the CommBank Neo credit card features no interest rate or late payment fees. In exchange for this, customers are charged a monthly fee based on their chosen credit limit. The credit card fees and limits are as follows:

If you never say no to a perk, you might be considering picking up a rewards credit card. These are credit cards that allow you to earn points on your everyday spending which can be redeemed for a range of rewards. The good news is that many rewards credit card providers generally offer bonus point offers for new customers, which can range between 50,000 to a whopping 200,000. This can be a great way to kickstart your points balance and get you well on your way to picking up some flashy rewards. To get your search started, we’ve rounded up three rewards credit cards with some snazzy bonus points offers.

During the height of the Covid-19 pandemic, credit card spending had reached a plateau. But according to new research from Citi, Aussies across the country are slowly getting back into the swing of things. The credit card issuer found that although credit card spending had fallen by 19% in January, spending in December was almost at pre-Covid levels. “Consumers are experiencing a spending hangover, after doing their bit to boost the economy during the November and December silly season,” said Head of Credit Cards at Citi Australia, Choong Yu Lum. “This is in line with expected spend for January, as consumers typically tighten their belt following a period of increased spending due to Christmas and school holidays.”And according to Citi, what we’re using our plastic for has also changed between December and January. RELATED: Credit card spending to pick up as Christmas nears, says Citi

Whether it’s to pay for big ticket items or to support yourself through a financial emergency, there are all sorts of reasons why you might be considering a credit card this year.But while credit cards can help you out of a bind, the flipside is they could also lead you down a rabbit hole of debt, if not managed responsibly.Credit Counsellors Australia’s senior insolvency officer, Matt Shepherd says a mistake many people make is that they treat their credit card as ‘free money’ rather than borrowed money.  “We find that when people pretend like their debt isn’t there, that’s when it can really get out of hand. Due to interest and things like [late fees], a couple hundred dollars can turn into a thousand dollars very quickly,” he says. The good news though is that you can use a credit card without ever falling into debt. All it takes is practising healthy money habits, such as sticking to a solid repayment plan and being proactive with your plastic - that might mean knowing your interest rate, reducing your credit limit or switching to a more suitable card.We spoke to three personal finance experts about their top tactics for staying debt-free over 2021. Here’s what they had to say. 

If we were to ask you for your phone number, you could tell us in three seconds. But what about if we wanted to know your credit card interest rate?According to new research from Defence Bank, one in three Aussies don’t know their credit card rate. Of those Aussies, four out of five didn’t realise their interest rate was above 10%, while some owed a card with a rate above 20%. “It’s time to break the cycle of paying unnecessarily high credit card interest rates. Australian consumers need to stop paying 20% for the convenience of a basic credit card, when genuine low-rate options exist for half the cost,” said Defence Bank chief executive officer, David Marshall. Concerningly, more than half (60%) of respondents admitted they don’t pay much attention to the rate on their card, while one in four carry a balance sometimes throughout the year. The data also found that Aussies are losing faith in rewards credit cards, with one in two believing the rewards programs are generally not good value for money. “We see from these results that Australians are frustrated by the rates they’re paying and the bells and whistles they either can’t use or don’t need,” says Marshall.

If 2021 is the year you say goodbye to lingering credit card debt, you might be considering picking up a balance transfer credit card. A balance transfer credit card allows you to transfer credit card debt you’ve built up over the years onto another card with a 0% interest rate - for a certain period of time. If used correctly, these cards do a fantastic job at saving you on interest and other fees you might be paying with your current card. Want to find out what’s on offer in January? Check out our top three balance transfer picks below!

Whether you’re straight up addicted or only use it when you have to, most of us have made one online purchase this year. But according to new research by MyState Bank, we might have added a few negative money habits to our virtual cart. The research found that bad online shopping habits are costing the average Aussies more than $400 a year! Some of the bad habits included buying more items to hit the ‘free shipping’ limit (48%), not returning an item that wasn’t right or didn’t fit (24%) or using online shopping as a way to kill time and boredom (23%). Other silly shopping habits included purchasing unnecessary items because they were on sale (21%) and storing their credit card details in their favourite websites to allow for faster and easier future purchases (17%). “With the online sales season in full swing, our research uncovered Australians are engaging in online shopping habits which are likely burning a hole in their pockets. We calculated costly habits are costing online shoppers an average of $424 each year,” said MyState Bank general manager, customer experience Heather McGovern. Interestingly, 36% of Aussies believe that they spend more money shopping online than they do when shopping in physical stores, while 65% said the time spent shopping online since the COVID-19 pandemic began has increased. “While many Australians enjoy the convenience of online shopping, the danger is that there aren’t many barriers to spending money. Compared to shopping in a store, consumers don’t have to put as much effort or thought into adding things to their cart.”

Has 2020 shaken up the way you spend? If the answer is yes, it may be time to think about switching your credit card for the year ahead. “There’s no doubt that, for many Aussies, 2020 has changed the way we’re spending our money, so naturally now could be the time to reassess something like a credit card.” Mozo Director, Kirsty Lamont said. “Look at things like the interest rate and fees, as well as the value of your current rewards program. If your spending habits have changed, by switching cards you could save yourself forking out too much in interest repayments or pesky annual fees which you can actually avoid.” 

Bit of a sucker for credit card bonus points? Well you’ve come to the right place. With Christmas around the corner, it’s likely your spending is going to increase, so now could be the perfect time to capitalise on a bonus points offer. And if Qantas Frequent Flyer is the program for you, there are plenty of options out there. At the moment, there are over 60 credit cards on the Mozo database that have bonus points offers attached. In most cases, these offers require a new cardholder to spend a certain amount in a selected period of time in order to receive a lump sum of rewards points. Of those credit cards, 28 have Qantas Frequent Flyer bonus offers: ranging from 15,000 points up to a generous 150,000. Check out some of these offers below!