Everyone knows it is bad to have loads of debt on your credit card but Australian credit card holders on average are actually carrying around $4,200 in credit card debt. That equals $735 a year in interest bills based on the average 17.5 percent credit card interest rate and this can be terrible for a credit score.
Banks are taking in record profits based on revenue from credit cards and credit card holders are helping push up the banks’ profits. The credit card companies are in love with the credit card holder but there is a way for you to fight back and cut down your interest payments on credit card debt. Simply getting away from those predatory credit card companies can mean big savings and a big difference in your credit score.
Stop killing your credit score
Some of the worst credit cards out there include the GE Money MasterCard that not only has an annual fee and a cash advance fee but also has an interest rate of 23.5 % and a late payment fee of $20. Citibank’s Qantas Signature Visa has an incredible $299 annual fee and an interest rate of 20.99% but it also has a cash advance rate of 21.74%. Citibank also has an Emirates World MasterCard that also has that $299 annual fee, the 20.9% interest rate and the 21.74% cash advance rate. Not only that, it also has a late payment fee of $10 and a ridiculous “dishonor fee” that is $15. GEM Visa Card has a 22.99% interest rate, an annual fee of $99, a cash advance fee of 3% and it also has a late payment fee of $20.
Look out for additional fees
Other types of fees to look out for are purchase rates, balance transfer rates, cash advance rates and extremely high annual fees like American Express’ Platinum card that has a $1,200 annual fee. These details can be hidden in the fine print and it is important to learn about these fees before you sign up for anything that could badly affect your credit score.
High interest rates and fees can really add up if you are rolling over balances each month and eventually killing your credit score. Things like reward programs or low rates are used to lure in customers. But later down the road, the benefits might disappear while the costs are still there and rates might even rise. If you are the type of credit card holder that usually carries over a balance then it is best to look for a card with the lowest fees and rates.
If you’re facing trouble with massive amounts of credit card debt, it would be wise to consolidate them into a credit card debt consolidation program at a trusted financial institution.