New Credit Card

Owning and using a credit card is a convenient way to shop and spend money in an increasingly digital world. Nevertheless, it is important to recognise that everything you spend will have to be repaid – often with interest.

When shopping for a new credit card, it’s worth understanding that there are strategies and features such as making regular repayments, taking advantage of interest-free periods and balance transfers that can help keep your debts under control.

Make regular repayments

Owning a first credit card doesn’t have to be a burden if you spend wisely and make regular repayments. That said, paying only the minimum monthly amount on the statement won’t eat into your debt – rather it only covers the interest charge.

Interest-free periods

Many lenders offer interest-free terms. These short-term 'windfalls' can last in excess of one month – most commonly 55 days – and can give you additional time to come up with some cash to pay for your credit card purchases.

However, interest-free periods usually only apply to a new credit card with a zero balance. With some providers, failure to meet monthly repayments or carrying over a balance transfer from another card may invalidate the interest-free term. Be sure to check the fine print to avoid forfeiting this benefit before signing up for a card.

Balance transfers

Acquiring a new credit card that offers a low-interest rate on balance transfers can be a good option if you’re looking for a way out of a financial black hole.

The trick with a balance transfer is to pay off the debt transferred from your old credit card before the interest rate reverts to a higher standard rate. With some discipline and the help of a low-rate credit card, a balance transfer  strategy can help you trim your credit liabilities.

Rewards

When looking for a new credit card, you’ll find many products offering reward points for purchases. In turn, the points can be used to buy items such as white-goods or air travel for instance. While, a card with rewards is tempting, it will often come with the sting of higher interest rates and fees. So if you’re looking for a new credit card, compare options online and always read the fine print!