Revealed: The best and worst ways to pay for Christmas 2017

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The season of giving may be fast approaching with Christmas just six weeks away, but that doesn’t mean you need to extend that generosity to forking over excessive interest and fees when you’re paying for presents this year.

New research from Mozo.com.au has revealed that Aussie Christmas shoppers could end up paying up to $934 in interest and fees in the New Year depending on their payment method, with the research predicting an average December household credit card spend of over $3,700.*

“For many households, turning to loans or credit cards may seem the only option to cover the cost of Chritsmas, but choosing the wrong payment method can add 25% to the cost of Christmas,” said Mozo Director Kirsty Lamont.

Payday loans top the list of the worst ways to pay for Christmas, with interest rates of above 45% and hefty establishment fees adding a whopping $934 in cost to the average silly season spend.

Putting Christmas on a typical credit card will add $309 in interest and fees to the average festive spend, while a typical unsecured personal loan comes in third on the list at a cost of $300. 

But if you have to whip out the plastic, using a 0% purchase rate credit card was found to be the best value way to pay for festive shopping - costing just $68 in total interest and fees on the average $3,744 Christmas household spend.

If you're looking for a cost-effective way to help spread the cost of festive shopping, here are some 0% purchase rate credit card and low rate personal loan options.

Virgin Money Virgin Australia Velocity Flyer Card - Purchase Rate and Balance Transfer Offer

Key features

  • 0% p.a purchase rate for 12 months
  • 0% p.a balance transfer rate for 6 months
  • Receive a $129 Virgin Australia gift voucher each year

Not only does the Virgin Money Virgin Australia Velocity Flyer Card come with a year long interest free spending period, but you’ll also score a $129 Virgin gift card that neatly cancels out the annual fee, plus a concierge service, transit accident insurance and exclusive flight deals.

RateSetter Unsecured Personal Loan

Key features

  • Fixed rate starting from 8.46%
  • No early repayment fee ($75 upfront fee applies)
  • Borrow up to $45,000

RateSetter is a peer-to-peer lender that offers rock bottom rates on loans starting from $2,000. You also have the option to make free extra repayments, to pay your loan off quicker and save on interest. So if you’re spending up big this Christmas, check it out!

ANZ Low Rate Platinum

Key features

  • $250 cashback when you spend $500 within 60 days
  • Low 11.49% purchase rate
  • Mozo Experts Choice Award winner 2017

With a low interest rate to keep costs under control, the ANZ Low Rate Platinum card gives you the chance to earn cashback on your spend, plus it comes with premium perks like free overseas travel insurance, extended warranty and a best price guarantee scheme.

*The Comparison Rate combines the lender's interest rate, fees and charges into a single rate to show the true cost of a personal loan. The comparison rates displayed are for the amounts and terms quoted, based on monthly principal and interest repayments, on a secured basis for secured loans and an unsecured basis for unsecured loans, and apply only to these examples. Different amounts and terms will result in different comparison rates. Full comparison rate schedules are available from lenders. Costs such as redraw fees or early repayment fees, and savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.


*Calculations were based on borrowing $3,744 and making equal monthly repayments to repay the full amount over a six-month period at the relevant interest rate for each product type. All applicable establishment and monthly fees were included for overdrafts, cash advance loans and unsecured personal loans, redraw fees were included for home loans and one annual fee was taken into account for credit cards. 


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