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Credit card features
Balance transfer credit cards
Consolidate an existing debt at a lower APR with a balance transfer card.
- Manage your debt. The longer the 0% balance transfer APR lasts, the more you’ll save.
- Beware of the revert rate. When the introductory low or no APR finishes, you could find yourself confronted with a much higher revert rate.
What should I consider when transferring a balance to a new credit card?
- What is the balance transfer offer?There are a few ways to compare how competitive an offer is. The introductory APR rate you’ll be charged on a balance transfer card is usually low or 0% p.a., so this is something you’ll want to consider. The length of the balance transfer period also differs, though it generally falls between six and 24 months. You’ll want to choose a balance transfer offer that will allow you to pay off your debt before the offer ends.
- What’s the revert rate? If you don’t think you can repay your existing debt within the promotional period, consider whether the revert APR rate will attract more interest and how this will impact the savings you’ve made.
- How much can I transfer? Many providers set limits on the percentage of the credit limit you can transfer. If your existing balance exceeds the limit, you may want to reconsider a card with a higher credit limit.
0% APR credit card
If you’re looking for a card that can lead to significant savings on interest, a 0% APR credit card could be the right choice for you.
- 0% APR credit cards allow cardholders to take their time when paying off larger purchases or consolidating existing debts.
- If the 0% APR is only in place for an introductory period, the revert rate could be significantly higher. These cards often require applicants to have a good credit history as well.
What should I keep in mind when considering a 0% APR credit card?
- How long is the 0% APR in place? Carefully confirm how long the 0% offer will extend and when it’s due to end. If you do not repay your balance by the end of the promotional period, you may find that your existing debt attracts a much higher APR.
- Are there other fees? If there’s an annual fee, make sure that the savings you’ll make in interest and other benefits of the card will offset these costs.
- What are the other perks? Is there a rewards program or can you earn bonus interest-free days if you repay your balance each cycle? Extra features such as these can help you determine the value of the card.
Low interest credit card
A low interest credit card allows cardholders to repay their debts at a lower interest APR than your standard card. Depending on the card, the length the low interest will be in place may vary from an introductory period to the life of the card.
- If you struggle to repay your balance each cycle, low interest cards can help you reduce the costs of your card.
- The advantage of low interest usually comes at the cost of forfeiting the extra features that a premium or platinum card may offer, such as a rewards program, complementary insurance or other extra perks.
What else should I consider when comparing low interest credit cards?
- How long is the low interest APR in place? Sometimes the low APR will only be in place for an introductory period (say, six to 12 months), whereas others may offer the low APR for the lifetime of the card. If it is the former, make sure to check the revert rate to avoid any nasty surprises when the promotional period finishes.
- What are the other fees involved? Depending on the card, the low interest APR of the card may be balanced out by higher fees. Read the terms and conditions of the card to ensure that the overall costs, such as the annual fee, don’t outweigh the low interest.
Travel credit cards
If you’re a frequent traveller, a travel card can be a good way to gain worldwide access to your cash without the drawback of currency conversion or foreign transaction fees. Big spenders can also often take advantage of rewards programs when using a travel credit card.
- If you’re constantly traveling – whether for work or pleasure – a travel card can give you the convenience of accessing your cash around the world. Plus, you can also save on currency conversion and foreign transaction fees while earning points to redeem for rewards as you spend.
- If you’re not a frequent traveller, then the higher cost of a travel card may not be worth it.
What should I look out for when considering a travel credit card?
- Who are the partners? Most travel cards have affiliated partners, such as an airline, that provide cardholders with easy ways to earn points or bonus points on eligible purchases. Choosing a rewards program that complements your existing spending habits is the wisest strategy. If you have to deviate from your usual purchasing patterns to accrue points, then the card won’t be of maximum value.
- What rewards are on offer? As well as partners, you’ll want to make sure that the rewards offered are of interest to you. There’s no point spending on the card and earning points if you can’t redeem them for the rewards you want.
- Are there restrictions? Some travel cards may pose restrictions on the supported currencies you can use or may prohibit you from using your card in some regions. Similarly, there may be restrictions on where and how you can earn and redeem points, so it’s good to confirm these details before you apply to ensure that the card accommodates your needs.
No annual fee credit cards
A no annual fee card doesn’t charge a yearly fee. Some cards have this as an ongoing deal; others will waive the standard fee for the first year of using the card.
- Not having to pay an annual fee can result in significant savings each year.
- If the annual fee is only in place for a promotional period, there may be a high annual fee when it reverts to the standard rate.
What should I consider when comparing cards with no annual fees?
- How long is the no annual fee offer in place? You’ll need to confirm whether the no annual fee is in place for the lifetime of the card or only for a promotional period. If it’s the latter, you’ll want to check how long it is in place for and what the annual fee will revert to at the end of the introductory period.
- What other fees and rates are involved? Just because there’s no annual fee doesn’t mean there won’t be other fees associated with the card. For example, if the card comes with a higher APR rate or a lower rewards rate, you may find that these outbalance the savings you’ve made on the annual fee. Calculate these figures before applying to make sure the card works for you.
- What perks are on offer? Cards with no annual fee often lack additional perks such as high-earning rewards programs or concierge services. If these extra benefits are of value to you, you may want to reconsider what’s on offer.
No foreign transaction fee card
If you’re a frequent traveller or global online shopper, a card that offers no foreign transaction fees could be of benefit to you. If you use your credit card to make overseas purchases, you’ll know that foreign transaction fees can add up quickly.
- A no foreign transaction fee card can help reduce these costs.
- No foreign transaction fee cards often come with a higher APR or annual fee, so you’ll want to make sure that these costs don’t outweigh the value of reduced foreign transaction fees before you apply.
What should I consider when using a no foreign transaction fee card?
- What are the other fees involved? While you will save on foreign transaction fees, you could find yourself forking out more in annual fees or interest rates. As always, compare your options and make sure these fees don’t offset the value of the card.
- Are there other perks? Confirm whether the card comes with other features, such as a rewards program or balance transfer option, and decide if these add value to your credit card experience. For example, if the rewards program partners with an airline that you never use, you may want to consider another option.
Business credit cards
Business credit cards work in a similar way to personal cards, but with extra features to make dealing with business costs easier.
- Business credit cards can be a good way to separate personal and business expenses to keep track of business expenditure. Using a business credit card can also help enhance your organization’s credit rating while offering additional perks such as rewards benefits, complimentary insurances and interest-free days.
- Business credit cards often feature higher annual fees and APR rates. As a result, you’ll need to use the card to its full potential while also making timely repayments to get the most out of the card.
What questions will I need to ask when comparing business credit cards?
- Choose a card that complements your spending habits. There are a wide variety of business credit cards available, so you’ll need to compare your options to find the right card for your organization. If you have a smaller business or plan to finance it with revolving credit, a card that gives you some flexibility and lower interest rates might be attractive. On the other hand, if you frequently use your credit card to pay for your expenses and you plan to repay your balance on time, a card with a solid rewards program could be of more benefit.
- What are the fees involved? Business credit cards often come with higher fees, so you’ll need to calculate whether the value of the card will offset these additional costs. If not, then the card may not be the right choice for you.
- What are the eligibility requirements? Business credit card applicants usually need to meet certain eligibility requirements, such as a minimum income and credit score, to receive approval for their credit card. To avoid having your application declined (and subsequently putting a dent in your credit history), thoroughly read the eligibility requirements before applying.
Student Credit Cards
Using a student credit card can be a great way for first-time credit cardholders to start building their credit score and finance your expenses while you’re still studying.
- Student credit cards often feature no annual fee and a low APR, so this can be a good way to finance your expenses while building your credit history at a minimum cost as you’re studying.
- Student credit cards are usually quite basic and don’t offer the same perks as a platinum or premium card. Student credit cardholders also often require a cosigner, who will handle paying your debts if you’re unable to.
What questions will I need to ask when comparing student credit cards?
- What is the annual fee and interest APR? Student credit cards typically offer low or no annual fee and lower interest rates, with some even offering interest-free days. However, this can vary from card to card so you’ll need to compare your options to ensure that the costs are affordable.
- What else does the card offer? Although student cards don’t usually offer too many bonus features, you may want to look out for opportunities for a balance transfer or interest-free days if that’s of value to you.
- Do I need a cosigner? You’ll often need a cosigner to apply for a student credit card. The cosigner is usually your parent or guardian, but depend on the card, they may also need a sound credit score to ensure your application is accepted.
Secured credit cards
If you don’t already have a credit score, a secured credit card can be a good starting point. The credit limit allowed on the card is usually secured by an equivalent amount of cash deposited into the account, which you are then expected to repay within a certain period.
- If you’re using a secured credit card, you’ll be required to deposit a minimum amount of cash which will become the credit line for the account. This is a good way for cardholders to build or rebuild their credit score.
- The money you deposit restricts your line of credit, and if you fail to make your repayments, you may lose your deposit.
What should I consider when comparing secured credit cards?
- How much money do I need to deposit? The amount you’ll be required to deposit will vary from card to card though the minimum usually floats between the $300-$500 mark.
- What kind of fees and charges can I expect? Again, this will vary according to which card you use. Some secured cards come with low or no annual fee and low interest APR, which could work to your advantage if you’re looking to save on costs. As always, read the fine print and make sure that the associated costs won’t eat away at your credit limit.
- How can I use the card to improve my credit score? Rather than using the card to carry a large balance or make exorbitant purchases, you should use it to make smaller everyday purchases that you can pay off each month. Secured cards often have higher interest rates than regular cards, so carrying a balance longer than you need to could backfire.
As with any financial product, service or provider, the right choice will always depend on your individual financial circumstances and needs. To make an informed decision, you should always compare your options and make a choice based on what is suited to your unique financial situation and preferences.
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