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Credit Cards

Credit Cards: Frequently Asked Questions

What are credit cards?

Credit cards are a useful and widely used facility allowing consumers for pay for goods and services on credit before paying the bill at a later date. For a modest annual fee, a credit card can help to spread the cost of purchases over a longer period of time. By paying off the balance regularly, little interest will be payable, making cards an efficient, convenient, and cheap payment device.

Why it my credit history? Why is it important?

Credit cards help to construct an individual’s credit history, which provides a record for future credit providers of the individual’s reliability in making repayments. This proves useful for a home loan application, for example. It is important, therefore, not to consider a credit card an endless source of finance. Repayment difficulties could damage your credit history, which would make it difficult to gain approval for future credit.

How can I avoid paying any interest / charges on my credit card?

Interest is avoided by paying off the credit card balance before the point at which interest applies. Penalty charges can be avoided by always making at least the minimum payment before the end of the billing period.

What types of credit card are available?

There are several types of credit cards, all designed to suit different sets of requirements, from those looking to pay less on existing debts, to those looking for rewards for spending, to those looking for exclusive benefits. Visit the separate credit card pages via the main ‘Credit Card’ tab above for more details about each card.

Credit Cards: An Express Guide

[Does one of these statements fit your credit card use? If not, e-mail us and tell us what's missing!]

"I’m looking for the cheapest way to consolidate my credit card debts and reduce my credit card balance":

For a small fee, a 0% balance transfer can help you to consolidate your existing credit card debts onto one card and reduce your debt with no interest. If you still have a credit card balance at the end of the 0% period, you can apply to transfer your balance again to another credit card supplier.

"I always seem to have a balance on my credit cards":

For those unable to clear their credit card balance each month, a low rate credit card ensures a consistently low rate of interest compared to the premium rates that follow introductory offers.

"I spend regularly on my credit card":

Regular credit card users could benefit from a reward credit card. Reward credit cards have loyalty schemes that offer incentives for spending. Accumulated points can go towards a range of products and services, including retail vouchers and airmiles. Regular credit card users could also benefit from a 0% purchases credit card, which allows payment for goods to be spread over a longer period of time.

"I spend thousands of dollars on my credit card every month":

While large spenders can also benefit from reward credit cards, those who enjoy a good status symbol can apply for a gold or platinum credit card, which offers generous credit limits and a host of incentives and loyalty bonuses. Alternatively, businesses and employers looking to save time and effort on their staff expenses could benefit from a business credit card.

"I travel overseas frequently. Are there any credit card benefits available?":

An airmiles credit card could be ideal for frequent flyers. Not only do airmiles credit cards tend to offer complimentary travel insurance, but some allow free or discounted entry to Frequent Flyer Clubs, allowing you to travel in comfort and style.

"I barely use my credit card, but I pay a small fortune just to own one":

Annual fees for credit cards can be wide and varied, depending on the type of card and the benefits that each card contains. If you are an infrequent credit card user, or would prefer to sacrifice some of the advantages for lower costs, why not consider a no annual fee credit card?

Credit Cards: Glossary

0% Balance Transfers

Many credit card providers offer an introductory period for 0% balance transfers. Existing debt from another credit card (or cards) can be transferred into a new account which will remain interest free until the introductory period expires. This is a useful feature for paying off credit card debts more affordably.

0% Purchases

Many credit cards offer an introductory period during which no interest is payable on purchases. It is important to note when this period ends and what the subsequent interest rate will be.

Annual Fee

This is a yearly charge applied by credit card providers which will be added to your balance. Some cards come with no annual fee, but other benefits are often sacrificed as a result.

APR

This is the Annual Percentage Rate (APR) that your balance is subject to, rather than a flat monthly fee.

Credit History

Credit history is a record of an individual's reliability in making repayments for past credit.

Interest Free Days

Most credit cards come with interest free days, usually ranging between 44 and 55 days. This is the period during which you have to pay off your balance to avoid paying any interest.