Why you might need to switch credit cards for 2021

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.” 

Where do credit card rates sit right now? 

Currently in the Mozo database, the average credit card rate sits at 16.35%. However, they range from 0% to a hefty 24.99%. So, there’s a chance you’re not getting a low rate on your current card. 

But a low rate credit card isn’t suited to every spender. 

In fact, for some credit card users it may be a savvier option to choose a card with a higher rate in return for a killer rewards program or low fees. 

Let’s see what option might suit you. 

There are a whole bunch of credit cards available to customers at the moment, so finding one to suit your spending shouldn’t be too tricky. 

You just need to know what you’re looking for. 

With that in mind, here’s a rundown of what type of credit cards are on offer and what type of spender they suit. 

• 0% intro offer: If you have some spending to do in the new year, like purchasing a new outdoor setting for your backyard or upgrading your TV, a 0% introductory offer on a credit card may benefit you. On the Mozo database, these offers range from 6 to 17 months.

• Low interest rate: Find yourself paying too much in interest because you don’t always pay down your credit card balance in full? Switch to a low interest option. This way, if you can only make your minimum repayment in a month, you won’t be slapped with a high interest rate but instead something lower and more manageable. 

• No annual fee: For credit card users that always pay down their balance in full each month and want to save on fees, a no annual fee credit card is worth considering for 2021. On the Mozo database, annual fees range from $0 to $1,200, so it could end up saving you a bit each year. 

• Rewards: Use your credit card for everything and always pay down your balance? It may be time to switch to a rewards card. Consider what type of program would suit you, as well as the different perks attached to the card (as sometimes these can offset a high interest rate or annual fee). 

• Balance Transfer: If you’re looking to clear your debt in 2021, a balance transfer offer is for you. This is where you can pay down your existing balance at no interest rate. On the Mozo database, these offers range from 5 to 30 months, so choose the option that matches how long it would take to pay off your debt. Just remember, any spending you do on a balance transfer credit card isn’t interest-free, so ensure you’ve got all your Christmas shopping done before you apply! 

RELATED ARTICLE: Using a credit card this Christmas? Here's how to avoid a new year debt hangover 

Want to start comparing credit card options right now? Check out the hot offers below or jump over to our credit cards comparison table for even more!