credit card deals to be wary off ahead of christmas

Written by The ReReport

CONSUMERS”™ frantic rush to Christmas is the most dangerous time of the year for credit card customers to rack up debts that leave them with a financial hangover in the new year. Last December, consumers were left with a whopping $52.9 billion owing in card debt, and $31.7 billion accruing interest.MORE: This is the shocking reality of our money worriesMORE: How to look good on a budgetCredit card interest rates often cause shoppers serious pain well after they’ve made a purchase as some cards attract interest rates as high as 24.99 per cent.New data from financial comparison website shows there is plenty of choice for customers with more than 300 cards on offer.But people must hand-pick a card carefully because some annual fees are as high $1450 per year, while many cards have no fee at all.media_cameraCredit card customers need to have a plan on how they are going to pay back their card spokeswoman Bessie Hassan warned credit card customers to be wary of lenders spruiking cards in the lead up to Christmas.“Credit card providers are known to ramp up their offers to entice new customers — these can range from zero per cent purchase cards, balance-transfer cards, cashback offers and even frequent flyer programs,” she said.“Zero per cent purchase cards are a popular option at this time of year, the beauty of these is that you can spend money on the card with no interest payable for the entire promotional period, currently up to 14 months.”No annual fee credit cardsBut borrowers should understand that promotional periods don’t last forever and the revert rates — once this period ends — can be above 20 per cent.Maximising interest-free days on a card could be a way to spread out your festive spending pain.Lender Skye Mastercard offers card customers 90 days interest free for every card purchase made from the date of purchase.This is the longest leeway time given to any card provider for everyday purchases.Skye senior product manager Blake Henry urged consumers “to set a budget and a plan on how you want to pay back your credit card debt, particularly within the interest-free period”.James Street Financial director James Trethewie warned shoppers to resist racking up credit card debt, which often resulted in a debt hangover in the new year.“Before you go nuts work out your financial position,” he said.“It’s much better to pay with cash than credit. But make sure you write down when things are due because the day you go over the due date you will be stung with interest.” CARD OPTIONS • Interest rates – 8.99 per cent to 24.99 per cent.• Annual fees – zero to $1450.• Interest-free days – zero to 90 days.Source: published as Your credit card debt could rise

Source link