How to choose the right credit card

New data from Mortgage Choice has found more than 57% of Australians have a credit card. Of those with debt, 35.4% admitted to having more than $5,000 in credit card debt, while just 11% said they owe less than $500 on their card.

When you consider how prevalent credit cards are, and how easy it can be to accrue a decent amount of debt, it’s important for you to pick the right credit card for your needs.

Of course, with hundreds of different card options available on the market, picking the right one can feel overwhelming. As a result, many people find themselves choosing a credit card from their current lender because it seems like the easiest solution.

Thankfully, picking the right credit card doesn’t have to be an arduous task. Here are a few easy things you can do to help you pick the right card for your needs:

Write down what you want

Before you can select the right credit card for your needs, you need to clearly identify what you want from your credit card provider. Are you looking for a low-interest rate, a high limit, or a card with great rewards and incentives? It’s also important to ask yourself how often and in what capacity you will be using your new credit card. Will you be using the credit card to make all your daily purchases, or will it be used on an ad-hoc, emergency basis? Once you know what you want from your card and how you’ll be using it, you’ll find it easier to find a product that suits your needs.

Do your due diligence

Once you’ve identified what you want from your credit card, online research can help you work out what options are available. There are plenty of websites where you can check out all of the available credit card products and identify which card will best suit your needs. When researching the various options, look at the interest rate being charged, the limit on the card, the fees charged and the rewards and/or incentive program each lender is offering.

Shop around for the best rewards

Australia’s lenders know how lucrative the credit card business can be for their bottom line. As such, they are willing to compete aggressively in this space and offer sharp interest rates as well as exciting rewards programs. To find the right card and rewards program for you, think about what rewards/incentives would best benefit you, your lifestyle and your bottom line. Some credit card providers offer free bottles of wine to customers who dine in certain restaurants, while other credit card providers will pay for a customer’s travel insurance. While free travel insurance may sound great, if you never go on holiday, it may not be the right incentive program for you.

Regularly review your options

Once you’ve selected the right credit card for your needs, you should continue to keep a close eye on your options. Lenders are constantly improving their credit card offerings, so it could pay to review your credit card at least once a year to make sure it’s still the right product for your needs. At the end of the day, our needs change all the time – so it makes sense that our financial products, including our credit cards and home loans, change as our needs do.

Manage your debt

Of course, choosing the right credit card product isn’t the only process you need to undertake. It’s imperative for you to make sure you successfully manage your credit card debt. When it comes to credit cards, the best plan of attack is to pay them off straight away and avoid paying unnecessary interest.

Talk to a Mortgage Choice expert

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