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 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.
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.
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.
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?
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.
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:
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.
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.
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:
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.