Exploit sale season without damaging your credit card

Laine Gordon

Laine Gordon

RateCity shows you how to stay out of credit card debt during end of financial year sale time.

June 18, 2010

As winter sets in, it is sale time across the country with stores far and wide slashing their prices across a broad range of items. Even the major department stores are fighting it out over who is offering the lowest prices.

For most of us, the end of the financial year sales mean a good work-out for our credit cards, so even though you may grab a bargain or two and save some money on your purchases, be sure to watch your spending and don’t go overboard on the plastic or you will pay for it later.

“There is no doubt,” RateCity CEO Damian Smith says, “you can save a lot of money by purchasing things you need during the end of financial year sales but you have to remember that if you don’t pay off your card each month the interest charged could cost you more than the discount you received at the checkout.”
Since September 2009, RateCity has recorded an average increase in the top 12 branded low-rate credit cards by 1.52 percent. The current average low rate credit card for purchases is now 12.95 percent, which is an increase of about $50 per year for a $3000 debt if left unpaid.

It also recorded that the top branded standard credit card average rate has increased by 0.93 percent to 19.36 percent, which equates to an extra $33 each year in interest charges if your balance is left unpaid. At this rate, if you had a credit card debt of $4000 you will look at paying close to $850 in interest if you don’t pay down the debt in one year.

To help you get rid of your credit card debt this sale season and save more, here are some tips:

  • Spend wisely and ensure you don’t spend more than what you can pay off your credit card to avoid being stung with high interest rates.
  • Move your debt to a low-rate or no-rate balance transfer credit card to avoid paying high interest rates for a certain time period.
  • Compare balance transfer credit cards online to find the best rate. Currently ANZ is offering their Low Rate MasterCard with a 0 percent interest rate for six months. For instance if you had a $6000 debt, just by adding $1000 each month over the six-month period you could potentially save more than $500 in interest compared to a credit card with a rate of 19.36 percent.



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