Credit cards for shoppers
If you like to shop till you drop, a credit card may just be your new best friend. But make sure you choose wisely so this piece of plastic doesn’t become your worst nightmare instead!
Here’s how to choose a great credit card for shopping sprees.
What should shoppers look for?
What you’re looking for in a piece of plastic will usually come down to what kind of spending you plan to do.
If you consistently spend big on a credit card, you may want a premium or rewards card, so you can cash in on all the perks they offer. But if you’re a shopaholic on a budget, you might prefer a card that will let you shop to your heart’s content - without running up a sky high bill.
Regular shoppers might be looking for a balance between low-cost spending and rewards value. Here are some of the features you should look for to strike that balance:
The first rule of every shopping trip is never pay more than you have to! That goes for scoring big at sales and getting a good deal on your interest rate. Look for a card with a low ongoing purchase rate, so that if you miss a monthly payment, it won’t be a huge blow to your budget.
Low annual fee
Getting hit with a whopping annual fee can also be a quick way to ensure you’re paying too much for carrying a credit card on your shopping trips. So look for a card with low or no fee. But remember, if you’re after rewards for your spending, the best cards will likely have an annual fee attached. So weigh up the benefits vs costs before committing.
There are a bunch of cards out there that come with special interest rate offers, usually in the form of low introductory rates. Just don’t get sucked in by these great deals and forget to check the ongoing rate - if it’s sky high, then the introductory offer may not be worth it.
Rewards points value
If you’re gunning for a piece of plastic that will net you freebies and perks, make sure you look at two things: how many points you earn per $1 you spend and what those points are worth when you go to redeem them. Don’t forget to look for special points conditions as well, for example, some cards offer up to 3 points per $1 at certain shops.
A worthwhile rewards scheme
What’s the use in building up all those points if you can’t redeem them for something you really want? There’s no point earning stacks of Frequent Flyer miles if you never have the time to travel. So when you choose a credit card, make sure it’s attached to a rewards scheme that aligns with your interests. Because after all, how many toasters does one person need?
What kind of rewards schemes are available?
Speaking of rewards schemes - there are a bunch of different ones to choose from. Which one you wind up with will depend on things like what kind of shopper you are, what rewards you want and how you spend.
Here are some of the major types of rewards programs you can find:
Frequent flyers - The big two here are Qantas and Velocity, each of which are aligned with different credit card providers. Each time you spend on your card, you’ll earn points toward things like free flights, upgrades or accommodation.
Supermarket rewards - For down-to-earth shoppers, a rewards program aligned with one of the major supermarkets might be a good bet. Coles has the Flybuys program, while Woolies has its Everyday Rewards system.
Petrol rewards - Most major service stations are partnered with a rewards program - so if you’ve got a favourite place to fill up, it might be worth looking into which piece of plastic will earn you points to put toward your fuel.
Direct earn cards - These cards are directly linked to a rewards program, so it’s easier and quicker to redeem for rewards. A common example of this is rewards cards that are directly linked to frequent flyer programs.
Premium perks for shoppers
If you’re a diehard shopper, premium credit cards can offer you some perks that you might not have access to otherwise. These high class bonuses include:
- Exclusive retail offers and events, ranging from product discounts to after-hours shopping sessions at your favourite retailers.
- Personal concierge which can help you do a whole bunch of things, like score event tickets, make reservations and find niche services, like a pet-sitter.
- Purchase security insurance and extended warranty to protect the things you buy.
Can I shop online with my credit card?
Shoppers are no longer confined to brick and mortar stores - sometimes the best deals and buys are to be found by powering up your laptop! So it’s good that you can use your credit card to shop in most online stores.
Credit card systems like Visa, MasterCard and AMEX are accepted in many places around the world and online, which means your card is too. Visa and MasterCard are very widespread, but AMEX is a little less common, so if you’ve got your heart set on an AMEX card, make sure your favourite online shops accept it before applying.
Credit cards also have special security systems in place to keep you safe while shopping online, like Verified by Visa and zero liability policies.
Are there credit card fees for shopping online?
Credit cards make shopping online a breeze, but that convenience doesn’t always come for free. You may be hit with a couple of fees or charges for using your plastic while shopping up a storm, so make sure you’re aware of them.
- Credit card surcharges. Just like when you go to the checkout, some online retailers surcharge for the use of credit card. Thanks to new laws, this surcharge is legally only allowed to cover the cost of the business offering credit card facilities, which should be between 1% and 3%.
- International transaction and currency conversion fees. If you’re shopping at an overseas retailer, there may be both an international transaction and currency conversion fee when you use your card. If you often shop from retailers around the world, take a look at these travel credit cards, to find a piece of plastic with low fees.
Tips for shopping responsibly with a credit card
While credit cards have a bunch of security measures in place, you can also take some steps to not only keep your details safe, but to make sure you don’t wind up with a bill as long as your arm.
Here are Mozo’s top tips for responsible credit card use when you hit the shops:
- Keep your PIN safe. Your PIN is your first line of defence when it comes to a credit card, so make sure you’re the only one who knows what it is. Make sure it’s also hard to guess - the days of using 1234 as a PIN should be long gone.
- Look for secure sites when you shop online. If you’re an avid online shopper, try to stick to sites you know and trust. A quick way to know if a site is secure is to look at the left corner of the address bar. If a padlock appears, as shown below, the site has security in place to protect your details.
- Review your statements regularly. Don’t just pay your bill and forget about it. Make sure you’re routinely scanning through your statement for any unusual transactions. If you find one, make sure you report it ASAP, because it might just be a mistake, or it might be a sign that you’ve become the victim of credit card fraud. Either way, let your provider know straight away, so you don’t wind up footing the bill.
- Budget for your shopping. The easiest mistake to make is simply spending more than you can afford. Remember that even though a credit card is designed to allow you to “buy now, pay later” you do have to eventually pay all that money back. Have a budget for your shopping trips, and stick to it.
- Plan around your interest free days. You get a certain number of interest free days per month to pay off your purchases before you’re hit with interest. But the trick is that these days start when your billing cycle does, not when you make a purchase. So plan to buy big ticket items at the start of your billing cycle, so that you have the maximum interest free time to pay it off possible.
- Set up direct debit payments. Never get hit with a late fee again by setting up automatic payments to cover your credit card bill. You can choose to have payments set up to cover the minimum monthly payment, a certain fixed amount each month, or your entire credit card balance. Our advice? Pay off as much as you can every month to avoid snowballing interest.
Find a credit card for shopping
Ready to hit the shops? Before you go, check out our credit card comparison table to find the perfect piece of plastic to take with you.