Credit Card rookie

Hi all

I am currently in the process of getting my PPOR refinanced with an offset account and my attention has turned to which credit card I should get with the interest free periods. I have never had a credit card and have no idea where to even start. For example some have a 55 day interest free period, do they tell you in advance when the last day will be? Any tips and advice greatly appreciated.

 

If you've never needed a credit card before, do you really need one now? For some lenders the card is mandatory, but for most you don't have to take it. As a general statement, I'd say don't take a credit card if it's not part of the way you manage your finances.

All that said...

55 day interest free cards aren't really interest free for 55 days. That's the maximum time frame. The actual period depends on a few factors and the minimum components is usually about 30 days.

The simple solution is to pay off the card in full at the end of each month.

 

A debit visa card would be probably be enough?

 

Yeah ok, the only reason I want one is to use the banks money so my money can stay in my offset account longer and save interest. End of each month would be a good rule of thumb

 

@Bean27 weigh up how much money you'd save vs how you know you manage your money. Consider your spending and savings habits, your budgeting, etc.

Keeping money in your offset account will save you money, but it's not a huge amount.

For some people a credit card makes it very easy to spend money and they spend more than they otherwise would. If you're at risk of spending more than you normally would on things you don't really need, the extra spending will far exceed the savings.

I'm hardly one to preach about this. Electronic payments are just too easy.

 

On these types of cards you need to pay the balance in full by the due date to avoid interest.
The due date is on the statement.
You will find it is "up to" 55 days, so if you spend on the first day of the statement period you could get the 55 days; on the last day you might only get 24 days interest free.
nb statement periods may not coincide with a calendar month - mine don't.

 

I get wh

I get what your saying the savings are minimal and the temptation is always there. Me and my partner are really strict but I get what you are saying. Dangerous tool

 

Just did some rough numbers and it is only around 54 cents a day I would save with some big risks. Probably not worth it

 

I love my Woolworths Qantas Credit Card, BUT I am very strict with my financials and budgeting.

We've had them years, they get hammered all month long for everything possible then paid in full at the end of the month.

Sure, they've saved some offset monies (never worked out how much, probably not a lot monthly but over the years it would have added up some).

The biggest thing we've had though is smashing them for the Qantas points, linking it to the Woollies everyday rewards account and taking advantage of all the extra bonus points offers in store when they come along.

Over about 7/8 years these points have got Emma to the UK and back for free, both my parents out from the UK and back again for free, numerous flights to NZ and flying family here from NZ and there's still about 300,000 points in the pot (almost another 3x return UK trips).

As a wise man once said "with great power comes great responsibility" ;-) if you are good with managing your finnaces then credit cards can be a great tool but for some (like my brother) then can lead very easily to financial ruin.

 

if this is the case you need to be disiplined,

the 55 day rule is confusing, it took me years to understand (partly because I didnt need to care) , and why it wasnt 60days

if you really want to take advantage of offset with credit card,
my rules
- never ever do cash advance
- ensure you pay off the entire balance every month just a few days before due date (give time for the fact that payments take a day or two)
and then you dont have to worry about 55 days or whether youve made it on time
- dont pay for surcharges for credit card unless points are your game

 

thats $180 per year in your pocket, assuming you dont pay an annual fee,

id be worth doing it, $180 is a 5 star meal for two! think of it as your bank shouting you a romantic dinner once a year! yeah

 

Credit cards are good if you ever need to hire a car.
If you can live without one do so.

 

I get what you

It seems like its not worth the hassle, the interest savings are minimal and the rewards points are confusing. So many different options

 

horses for courses my friend
ive done very well out of rewards points, and have not paid interest in 15 years,
in fact I paid $1000 last year in annual fees, and its been worth it

 

What card do you use? and how does the points system work?

 

Amex x2, and a few visa cards.
I collect qantas and kris flyer.

Sign up bonus play a big role

 

I was thinking about it and you could nearly just forget about the interest savings and just go chasing rewards points. For example every time you make a purchase with the credit card have an auto sweep set up (or manually do it) and pay it back immediately. That removes any risk of ever having to pay interest and you get the reward points. Also starting up multiple cards and closing them off within a year just to get the bonus points