5 costly credit card mistakes Aussies make over Christmas

Ben Tosi   |   15 Nov 2017

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With just over a month to Christmas, many Aussies are whipping out their credit card at the checkouts more and more to cover the costs of the festive season.

But according to recent Mozo data, we have a pretty precarious relationship with our plastic friends with a money wasters survey revealing that avoidable credit card interest costs us a nationwide $5.5 billion, working out to almost $700 per family, per year.

“Aussies love to use their plastic, particularly over the Christmas period. But if they’re not careful they will rack up a hefty credit card bill and no one wants to start a new year with that kind of debt,” said Mozo Director, Kirsty Lamont.

RELATED: The 5 best rewards credit cards of 2017 in Australia

While you might have already started to spend, it isn’t too late to avoid some of the more costly credit card errors. So here are five common Christmas credit card mistakes and how to avoid them this holiday season.


1. Being late on repayments

In the thick of your Christmas shopping and with a bunch of other bills to pay it can be easy to miss out on your monthly credit card payment, but this could cost you. According to the Mozo database, the largest credit card late payment fee going round is worth a whopping $35!

How to avoid it: Set up automatic payments from your transaction or savings account and avoid the late fees.


2. Only making the minimum repayment

The temptation to spend big and spread yourself thin - meaning you can only make the minimum repayment for a few months - can result in accruing a tonne of credit card interest to bring in the new year.

How to avoid it: Establish a Christmas budget that you know you can pay off in full each month - this might mean spreading out some of the bigger expenses - and no matter what stick to it!


3. Maxing out your credit card

Food, beverages, presents and holiday expenses all piled into one quarterly splurge - there is no wonder Aussies max out their credit card over Chrissy. Not to mention the overdraft fees! This common mistake also has far-reaching implications for your credit score and may affect how lenders view you as a borrower in the future.

How to avoid it: Establish a holiday budget that sits within 30% of your overall credit limit. You will be able to cover your entire balance and also keep your credit score squeaky clean.


4. Hitting the ATM for a cash advance

In the days leading up to Christmas you might find yourself in the midst of grocery shopping mayhem but hitting the ATM or making any other cash advances is going to cost you a pricey cash advance fee and you’ll also start paying interest on that money straight away.

How to avoid it: Reach for your debit card instead as these cards often come with fee-free ATM withdrawals.


5. Swearing off credit cards for good

The horrors of last year’s credit card bill might have you wanting to chop up your plastic this time around but credit cards are a great tool to help you budget as long as you’re using the right one responsibly.

How to avoid it: Keep your credit card and shop around for the one that suits you best. In saying that, it is important that you establish a workable, realistic budget and keep track of your spending throughout the summer months.

If you’ve already tallied up a bit of credit card interest and don’t want to pay the lofty interest rates associated with some cards, check out a few of the popular low rate options on the market below.

Low rate credit cards this Christmas - rates updated daily

  • Australian Military Bank Low Rate Visa Credit Card

    0% p.a. for 12 months and then 11.99% p.a.

    11.99% p.a.

    $49

    A great card for everyday spending, with a competitive low interest rate and up to 45 interest free days on your purchases. A great choice for savvy spenders in a hurry, apply online for a quick assessment. Mozo Experts Choice Awards 2018 - Balance Transfer Credit Card.^

    • 0% p.a. for 12 months and then 11.99% p.a.

    • $49

    • 11.99% p.a.

    • 45

    • 19.99% p.a.

    • $4.50

    Read our Mozo Review to learn more about the Low Rate Visa Credit Card

    Details Close

  • CUA Low Rate Credit Card

    0% p.a. for 13 months and then 21.74% p.a.

    11.99% p.a.

    $49 $0 in the first year

    0.0% balance transfer rate for 13 months & up to 55 interest free days. No annual fee for the first year and $49 after.

    • 0% p.a. for 13 months and then 21.74% p.a.

    • $49 $0 in the first year

    • 11.99% p.a.

    • 55

    • 21.74% p.a.

    • 2.00%, Min $3.50

    Read our Mozo Review to learn more about the Low Rate Credit Card

    Details Close

  • ME frank Credit Card

    No current offer

    11.99% p.a.

    $0

    Meet Frank, a low rate credit card with up to 55 interest free days, no annual fee and no strings attached. If simple, hassle free spending is your goal, you and Frank might be a match made in heaven.

    • No current offer

    • $0

    • 11.99% p.a.

    • 55

    • 11.99% p.a.

    • 2%, Min $4.00

    Read our Mozo Review to learn more about the frank Credit Card

    Details Close

  • ANZ Low Rate

    0% p.a. for 15 months and then 21.74% p.a.

    12.49% p.a.

    $58

    With a low interest rate on your purchases and 0.0% p.a. on balance transfers for the first 15 months (T&Cs apply), this card makes for easy everyday spending. Apply online in just five minutes, and receive an answer in 60 seconds.

    • 0% p.a. for 15 months and then 21.74% p.a.

    • $58

    • 12.49% p.a.

    • 55

    • 21.74% p.a.

    • 2%

    Read our Mozo Review to learn more about the Low Rate

    Details Close

  • Bankwest Breeze Platinum Mastercard

    0% p.a. for 26 months and then 12.99% p.a. (2.00% balance transfer fee)

    0% p.a. for 6 months then 12.99% p.a.

    $99 $0 in the first year

    Streamline your budget with a low ongoing interest rate, up to 55 interest free days and 0% p.a. on balance transfers for 26 months. Plus, travel with free international travel insurance for you and your family by buying your tickets on your card.

    • 0% p.a. for 26 months and then 12.99% p.a. (2.00% balance transfer fee)

    • $99 $0 in the first year

    • 0% p.a. for 6 months then 12.99% p.a.

    • 55

    • 21.99% p.a.

    • 2%, Min $4.00

    Read our Mozo Review to learn more about the Breeze Platinum Mastercard

    Details Close

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