Paying off your credit card each month

For those people who pay off their credit card each month, the interest rate may not make much of a difference to them. So finding the cheapest credit cards will be much easier. Since they are not carrying a balance, interest will not add up. For those making a large purchase with the knowledge that it will be paid off immediately, choosing a card that has a set interest free period might be beneficial. Many credit cards come with annual fees. Even those who pay off their card each month will be responsible for this fee. Some banks will waive this fee if you spend a certain amount each year, so for some this may be a cheap option.

Carrying a balance on your credit card

For those who carry a balance on their credit card, the best and cheapest credit cards option is to find a card with a low interest rate. Not paying off your credit card each month will cause interest to accrue on your account. Paying a high interest rate will make it much more difficult to pay down your credit card balance, causing you higher payments and a longer time period to actually pay it off completely. Several credit cards offer low interest rates as well as low balance transfer rates.

  • Bankwest Breeze MasterCard – Balance Transfer Rate of 4.99% p.a. for 9 months, Interest Rate of 0% p.a. for 6 months (reverts to 10.99% p.a.) on purchases
  • St.George Vertigo – Balance Transfer Rate of 0.99% p.a. for 6 months, Interest Rate of 13.24% p.a. after 6 months
  • Aussie MasterCard – Balance Transfer Rate of 2.99% p.a. for 12 months, Interest Rate of 9.99% p.a. for 12 months (reverts to 13.29% p.a.) after 6 months

Credit cards with rewards programs

For some consumers, having a credit card that offers rewards is a benefit they prefer. The cheapest credit cards for these consumers will be the ones that have a low annual fee, but still offer great rewards. There must also not be any caps on reward points, and it should be relatively easy to earn reward points on regular purchases. Here are some credit cards that might be a good option for those who like reward programs.

  • Citibank Silver – Annual Fee $89 (1 reward point for every $1 spent)
  • Commonwealth Bank Awards Credit Card – Annual Fee $89 ($59 for qualifying customers) (1.5 reward point for every $1 spent)
  • American Express Gold Ascent Card – Annual Fee $0 (1 reward point for every $2 spent)