Low rate credit cards 'can make a difference'

Aussies should take the time to compare low rate credit cards to ensure they get the best deal because it can make a significant difference to the amount they have to pay back, an expert has stated.

In an article for the Whitsunday Times, founding director of financial planning firm ipac Paul Clitheroe explained that shopping around can reap rewards, particularly as many providers offer excellent "honeymoon period" deals.

"The trick is to take full advantage of the honeymoon period to pay off your existing debt and avoid ramping up your card spending," he stated.

Mr Clitheroe warned those who get a new credit card to ensure they do not keep hold of their old pieces of plastic, because this can lead to the temptation to run up twice as much debt.

However, he noted that as well as cutting up their old card, Aussies need to inform their bank because otherwise they could still have to pay annual fees.

Getting a low rate credit card could be particularly important in the coming years, as the latest forecasts by IBIS World suggested that there is set to be an increase of 8.6 per cent in revenue by 2016, reports the Australian Associated Press.

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