Credit cards are ubiquitous; most adults have at least one, often two or three. With the first modern credit card being created by Diners Club in 1950 in the US, today credit cards are used worldwide, with a wide range of features – and costs – available for customers.
The RateCity website allows users to search, compare and apply from a range of over 200 Australian credit cards (at the time of writing), and it’s an exercise well worth taking.
For starters, interest rates on Australian credit cards can vary dramatically, and for those card holders who do not pay off their outstanding monthly balance in full – which means they will be accruing interest – it’s particularly important to look for a card with a low interest rate.
Low rate credit cards are offered by banks, credit unions and even some airlines, but the main point never changes – to get the best deal, and save money, you need to compare credit cards, and think about your own spending habits, before signing up for one. Here are a few tips to help you determine what kind of credit card user you are:
Transactors and revolvers
These are not people who like driving farm machinery, or waving hand guns around. They’re the terms used to describe two different types of credit card users.
When it comes to Australian credit cards, a ‘transactor’ is someone who fully pays out the closing balance of their card each month, thereby avoiding paying any interest. These people may be best served by choosing a credit card with a long interest-free period, such as 55 days – and possibly a good rewards program.
A ‘revolver’ is a credit card user who does not pay off all of their outstanding card credit balance each month, but carries or revolves some of the debt over into the next billing period – and paying what can be very high interest on it, potentially in excess of 20 percent, as a result. Revolvers may be best served getting a credit card with the lowest possible interest rate, and no rewards program, as these typically have the lowest annual fees. Indeed, some Australian credit cards have no annual fee.
For some of the best deals for your style of credit card use, compare credit cards at RateCity.