Credit Cards

A credit card is unbeatable for financial fluidity, worldwide payments and greater spending power. Many people in New Zealand have a credit card and if you already have one (or many), you may be on the lookout for a better offer or be simply comparing the latest offers. You can use a credit card to consolidate your existing card debts, but it may be worth seeking financial advice prior to using this as a way of paying off debts. Use the chart to compare the features of all credit cards. What – if at all – is the balance transfer rate? Is there an introductory offer from which you can benefit? Searching for a credit card is all about maximizing your benefits and keeping costs down. Ready to apply? Click on the blue More Info button and you will go through to an application page.

Avoid the dangers of credit cards

What is a Credit Card?

Cards are extremely popular and are a much safer and more convenient alternative to carrying around money. Cards can be used all over the world to make purchases online, over the phone, in shops, restaurants and thousands of other outlets. With a credit card you are given access to a line of credit. The exact amount of credit you will be given is called the credit limit and this will be predetermined by the credit card provider.

Every month, you will be sent a statement that includes all the transactions you have made that month and your minimum payment and due date. You don’t have to pay it back all at once, but you pay extra interest on any money you haven’t paid back when it’s added to the next month’s total.

Many people choose to pay for things with a credit card and as such there are hundreds of different credit cards available for you to choose from.

What is the Interest Rate?

Credit cards have an interest rate, which is the annual rate you pay for borrowing the credit on your card. Interest rates are usually based on market interest rates, your credit history and the type of credit card you have. Different banks and financial institutions will have their own policies when it comes to credit card applications.

You will find that the better your credit history the higher your credit limit and the lower the interest. If you have a poor credit history you will be given considerably higher interest rates. However, if you use the card correctly and make your payments on time this will improve the credit card conditions you will be given in the future.

What are the risks?

You need to be careful with a credit card because if not used properly you can end up in a difficult situation. Credit cards become problematic when the holder accrues more debt than a regular monthly payment can cover. You should at least pay the minimum amount due every month and where possible pay charges in full. The minimum monthly payment is the lowest amount that you are required to pay the card provider each month. You will be in default if you pay less than this.

You need to manage your credit properly because failure to do so will result in increased interest rates. You shouldn’t buy things that you can’t pay back because you risk ending up in debt and damaging your credit score. When you don’t pay the money you borrow you risk being denied future credit.

Remember credit cards are not free. There are a variety of situations where you might have to deal with credit card fees. Some credit cards will come with annual fees where you will be charged a yearly fee for the convenience of having the card. You might also have application fees where you are charged when you make an application for a credit card. More commonly you will be charged a cash advance fee for withdrawing money.

Choosing the best card for you and your finances

There are many types of credit cards so you need to think about what sort of card you want and what you want to use it for. As well as standard credit cards, if you are a student then you might want to think about student credit cards, there are business credit cards for corporate needs and reward credit cards that offer a variety of reward programmes.

It is important that you take the time to compare the market. Use the comparison table above to compare some of the different credit cards available.