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Guide To Credit Cards

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cards are an easy way to pay for things but they can also be very
expensive if you don't pay off the balance in full every month. The
longer you leave an unpaid credit card balance the more expensive it


Here's how to get the most out of your credit card, and pay the least amount of interest:

  • Find the best interest rate
  • Check the fees and interest-free days
  • Follow our 8 rules for credit cards

Find the best interest rate

Credit card interest rates can range from 10% to 20%.

It's important that you choose a credit card that suits how much you
spend and your ability to repay. For example, if you tend not to pay
off your card every month, you'll probably be better off with a lower
interest rate.

Check the fees and interest-free days

Most credit cards offer interest-free days on purchases and charge
an annual fee. Fees can range from nothing to $450 a year, and the
number of interest-free days can range from 0 to 55.

If you think you're paying more than you should, ring your bank and
ask for a better deal. If your bank can't offer the best deal consider
changing cards.

Follow our 8 rules for credit cards


  1. Shop around for the best deal
    cards come with varying interest rates, fees, and rewards programmes.
    Take the time to select the credit card that best suits your
  2. Know the interest rate you're paying on your credit card
    Many credit cards charge up to 20% interest after one month's credit. Do you know your card's current interest rate?
  3. Review your credit card limit
    Base your credit card limit on how much you can afford, not how much
    you might spend. If you think you will have trouble paying it back,
    decrease your limit.
  4. Pay the balance off in full each month
    You can only take advantage of interest-free days if you pay the
    balance in full at the end of the month. If you can't afford to pay the
    balance in full, at least try to pay more than the minimum repayment to
    save on interest costs.
  5. Don't use your credit card to withdraw cash
    Don't withdraw cash from your credit card - banks charge high fees for
    this. Any cash you withdraw attracts a high interest rate from day one.
  6. Be wary of accepting a higher limit or additional card
    If you let your bank raise your credit limit, or give you another
    credit card, you increase the risk that you'll end up paying lots of
    interest. Plus credit cards usually have an annual fee, so the more
    cards you have, the more fees you pay.
  7. Avoid temptation
    If you can't resist the temptation to spend more than you can afford,
    leave your card at home. That will give you time to weigh up whether
    your purchase is essential or just nice to have.
  8. If you're in trouble, talk to your bank
    If your credit card is getting out of control, talk to your bank about
    options for clearing your credit card debt. You may be able to take out
    a loan to pay off your credit card and pay off the loan at a lower
    interest rate.

Content provided by, Your Independent Money Guide.

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