How to see through a dud credit card deal

dud-credit-card

If you’re in the market for a credit card, chances are you’ve seen a good mix of deals and offers from a range of providers. That’s why it’s essential to do your research and shop around. But contrary to popular belief, finding the right option is only half the battle. The other part is ensuring the card is a winner. 

Because beneath the flashy or limited time offers, there’s often a catch to watch out for. So to help you avoid a nasty credit card trap, we’ve listed five features to look out for during your search for your plastic match.

A high revert purchase rate

Interested in doing some interest-free spending? Then you might be considering a 0% introductory purchase rate credit card. As the name suggests, these are credit cards that feature a 0% purchase rate for a set period, allowing you to spend without incurring interest. 

But while this might seem like a dream to any shopper, before you sign on the dotted line, make sure you check out the revert rate. This is the rate the card will revert to once the interest-free period is up, which in some cases, can soar as high as 19%. 

So if you want to keep costs low once the introductory rate expires, you might want to opt for a card that features a rate below 14%, so if you do intend to carry a balance for a while, your interest bill will be kept to a minimum.

Too many fees

When you begin your search for the right credit card, it’s not unusual to come across standard charges, like an annual fee (though it is possible to find a card with no annual fee!). But depending on the type of card you’re looking for, you may encounter a few other costs you might not have expected. 

In addition to its regular annual fee, many rewards credit cards may also come with a yearly rewards program fee, ranging from $50 to $100. While this might not seem like a lot, if you plan on keeping the card active for a long time, these small fees can start to add up over time! 

Another common charge is foreign exchange fees, which apply to overseas purchases and are generally around the 3% mark. If you plan to use the card for online shopping, try to steer clear from cards with foreign exchange fees above this.

Rewards points are capped too low or expire quickly

From free flights to flashy perks, rewards credit cards are a hot pick for many Aussies. And if you’ve got your eyes set on one of these bad boys, it’s important to make sure you choose a deal that gives you some flexibility in terms of earning and redeeming rewards points. 

The two things to be aware of when it comes to your rewards points are their expiry dates and cap amount. Although the exact period will depend on the card you choose, expiration dates for rewards points are generally around 36 months. If you plan to play the long game with your points stash, it might be in your best interest to double-check the expiration dates before applying. 

When it comes to capping points, this is typically done on a monthly or annual basis, with the maximum number of points you can earn over a set period varying from card to card. For big spenders, this may mean having to explore rewards card options that don’t ever cap points.

A high balance transfer fee

On the other hand, if you’re interested in clearing debt, you might think about taking out a balance transfer card. Aside from opting for a card that features 0% interest, you’ll also want to watch out for any balance transfer (BT) fees that may apply. These are charged as the cost to move your existing balance onto your balance transfer card. 

BT fees are generally based on a percentage of your current balance and range between 1% - 3% - so the larger your debt, the higher the fee. Of course, if you do your research and shop around, it is possible to find an option that charges no BT fees. 

Now that you’ve got a pretty good idea of what makes a great credit card deal, it’s time to start shopping around! You can compare credit cards by heading over to our credit card comparison tool or checking out the offers below.

Compare credit cards - rates updated daily

Search promoted credit cards below or do a full Mozo database search. Advertiser disclosure.
  • Apply By 31 October 2021
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    Bendigo Bank Low Rate Credit Card

    0% p.a. on purchases for 12 months (Reverts to 11.99% p.a). Also 0% balance transfer for 12 months. Low annual fee of $45 and no fees for additional cardholders.

    Purchase rate
    Balance transfer rate
    Annual fee
    0% p.a. for 12 months then 11.99% p.a.
    0% p.a. for 12 months and then 11.99% p.a. (2.00% balance transfer fee)
    $45
    Go to site
    Details
  • Apply By 30 November 2021
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    St.George Vertigo - Cashback Offer

    $300 cashback when you take out a new Vertigo Credit Card and spend $4k on eligible purchases within 120 days of the new card approval. No annual fee for the first year, $55 thereafter. New cards only, Eligibility criteria and T&Cs apply. Offer ends November 30th 2021.

    Purchase rate
    Balance transfer rate
    Annual fee
    13.99% p.a.
    6.99% p.a. for 12 months and then 21.49% p.a.
    $55 $0 in the first year
    Go to site
    Details
  • placeholder
    NAB StraightUp Card

    $10/month - $1,000 Credit Limit

    Pay no interest and no late payment fees, just a $10 monthly fee for a $1,000 credit limit. Plus, if you don't make any purchases and have an outstanding balance of $0 during the whole statement period, the monthly fee will be reversed. Also pay no foreign currency fees when you shop online or overseas. Mozo Experts Choice Credit Card Innovation Winner 2020^.

    Purchase rate
    Balance transfer rate
    Annual fee
    0% p.a.
    No current offer
    $120 $10/month - waived if no spend & no balance owing
    Go to site
    Details
  • Apply By 30 November 2021
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    Bank of Melbourne Vertigo

    0% p.a. for 30 months on balance transfers requested at card application. 0% balance transfer fee applies. Rate then switches to applicable variable cash advance rate. No annual fee for the first year, $55 thereafter. New cards only, Eligibility criteria and T&Cs apply. Offer ends November 30th 2021.

    Purchase rate
    Balance transfer rate
    Annual fee
    13.99% p.a.
    0% p.a. for 30 months and then 21.49% p.a.
    $55 $0 in the first year
    Go to site
    Details
  • placeholder
    NAB Low Rate Card

    0% p.a. interest on balance transfers for the first 32 months, plus a low ongoing purchase rate after that means you can spend with confidence. There's also up to 55 interest free days on purchases to help you manage your budget better.

    Purchase rate
    Balance transfer rate
    Annual fee
    12.99% p.a.
    0% p.a. for 32 months and then 21.74% p.a. (0% balance transfer fee)
    $59 $0 in the first year
    Go to site
    Details

^See information about the Mozo Experts Choice Credit Card Awards

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