Credit Cards - Low-rate credit cards 'offer significant savings on interest payments'

It may still be months away but consumers are being advised to consider how they will fund Christmas.Writing for Lifehacker, Jason Fitzpatrick points that although it is just under five months away by taking the time to plan their festive finances consume

Those Aussies on the search for a credit card should ensure that such a product is selected with care, it has been reported.

Indeed, former doctor Adir Shiffman points out that although some form of card fee is likely to be charged regardless of the product taken out, taking the time to source a competitive deal could leave people in a significantly more advantageous position when it comes to money management.

Speaking to Adelaide Now, he points out that those who opt to take out a card which charges a low-rate annual fee but lacks other incentives such as reward point schemes could find that they can save much as ten per cent in annual interest repayments.

"If you had a $5,000 balance, that's $500 a year," Mr Shiffman tells the publication, an amount which could be put towards taking further steps to pay down debt or placing into a savings account.

Mr Shiffman goes on to point out that those using charge cards could find themselves hit with particularly hefty fees if they are not paid off in full.

Indeed, he states that Diners and a number of American Express cards are among those products in which debts not only need to be cleared off in full each month, but they also need to be made on time.

Should this not happen, even if they are just one day late in making a repayment, the financial advisor asserts "you will be hit with a big charge, sometimes known as liquidated damages" which can be worth as much as three per cent of the overall balance owed.

And while this may cause further damage to consumers' pockets doing so could play right into the hands of banks as he claims that their favourite customers" are those people "who make some payments and don't default, but keep a revolving balance and pay lots of interest fees".

For those looking to avoid the financial pressures that credit card charges can cause may want to consider seeking out a 0% balance transfer deal which could see numerous products transferred into a single monthly repayment.

Indeed, InfoChoice chief executive Shaun Cornelius recently told BusinessDay that while opting for such a credit card product makes sense, borrowers need to be disciplined in their use of it.

Written by Mark Hornby