Most Australians got their first credit card in the mail from the same bank they’ve been signed up too since they opened their first savings account in primary school. Familiarity and time are the main reasons we stay with banks, despite the fact that most of us could find better credit card deals elsewhere.
If you do decide to put the feelers out, make sure you aren’t blindsided by clever marketing ploys. Low interest rates aren’t always a good thing and higher interest rates aren’t always bad.
What are the benefits of high interest rate credit cards?
While you would automatically assume credit cards with higher interests couldn’t benefit you, you do need to look at the bigger picture and consider the extra benefits they offer, including a larger credit limit and broad reward programs.
If you are a traveller, charge a large amount on your credit card or enjoy any number of rewards, then a higher interest rate credit card may suit your needs.
What are the benefits of low interest rate credit cards?
Low interest rate cards on the other hand usually offer low ongoing fees and introductory rates on balance transfers. If you are always conscientious and prompt with your credit card payments a low rate card could be your best bet. While they don’t come with many rewards, if you only use your card sparingly you wouldn’t be able to cash in on many rewards regardless. However, it is important to note that late payments can make your interest rates double before your eyes.
Also, be careful about going over the low credit limits, or taking out cash advances which could attract much higher rates.
Many people sign up to a new credit card for the 0% introductory rate. While this is certainly attractive, be sure to pay off your debts before the rate soars.
If your dolomite account has run its course and you’re interested in looking outside your bank, compare interest rates on over 200 credit cards using RateCity’s credit card comparison tool.