5 costly credit card mistakes Aussies make over Christmas

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 - last updated 9 August 2022

Search promoted credit cards below or do a full Mozo database search . Advertiser disclosure
  • Virgin Money No Annual Fee Card

    Virgin Money No Annual Fee for the life of the card. 0% p.a. for 12 months on purchases (reverts to ongoing purchase rate) and balance transfers (reverts to cash advance rate).

    Purchase rate
    0% p.a. for 12 months then 18.99% p.a.
    Balance transfer rate
    0% p.a. for 12 months and then 20.99% p.a.
    Annual fee
  • Apply By 31 Oct 2022
    Westpac Low Rate - Cashback Offer

    Enjoy a super low rate of 13.74% with 55 days interest free plus up to $200 cashback - $50 cashback for each month you spend $1,000 or more on eligible purchases in the first 4 months from card approval. New Cards only. T&C's and exclusions apply.

    Purchase rate
    13.74% p.a.
    Balance transfer rate
    6.99% p.a. for 12 months and then 21.49% p.a. (1.00% balance transfer fee)
    Annual fee
  • Apply By 31 Aug 2022
    St.George Vertigo - Balance Transfer Offer

    0% p.a. for 32 months on balance transfers requested at card application. 0% balance transfer fee applies. Rate then switches to applicable variable cash advance rate. No annual fee for the first year, $55 thereafter. New cards only, Eligibility criteria and T&Cs apply.

    Purchase rate
    13.99% p.a.
    Balance transfer rate
    0% p.a. for 32 months and then 21.49% p.a.
    Annual fee
    $55 $0 in the first year
  • Virgin Money Virgin Australia Velocity Flyer Card - Balance Transfer Offer

    Get in the air with a $129 Virgin Australia Gift Voucher each year. 0% p.a. for 28 months on balance transfers.

    Purchase rate
    20.74% p.a.
    Balance transfer rate
    0% p.a. for 28 months and then 20.99% p.a.
    Annual fee
    $129 $0 in the first year
  • Mozo Expert Choice Badge
    American Express Low Rate Credit Card

    Competitive low rate with $0 Annual Fee. Offers Card Refund Cover and Card Purchase Cover. Customers need an annual income of $50,000 or more.

    Purchase rate
    8.99% p.a.
    Balance transfer rate
    No current offer
    Annual fee

^See information about the Mozo Experts Choice Credit Card Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.