Credit card for Christmas

It’s a fact there are conveniences offered by credit cards that other forms of payment can’t match. Internet shopping is easy with a credit card, and most online vendors now have secure checkout facilities to protect you from fraud. Also, with a credit card you do have the ability to refuse payment (chargeback rights) should purchased goods arrive damaged. Some people keep a credit card handy just for online shopping, even if they have the ability to pay in other ways.

Therefore, when looking around for a new credit card for Christmas, take the time to find the best deal for your lifestyle. There are many offers to choose from, and one of them should help you to meet your financial goals.

If your financial situation forces you to carry a balance over several months, look around for the lowest interest rate. A credit card with an interest rate of 15% will cost you $150 per year on a balance of $1,000. Time spent looking could save you hundreds of dollars over the long run.

A card with a special introductory low interest rate, or no interest rate for a certain length of time, or no annual fees, can be useful if your budget demands you carry the balance for some months. But be careful that the enticement doesn’t tempt you into spending more than you’ve budgeted.

If you can manage to pay the entire balance within a month or two, then perhaps a card with higher interest rates but including a reward program might be more attractive for you. Frequent flyer miles or other inducements could go a long way toward creating some joy in your next holiday season.

If your credit history is very good, try negotiating with the issuing institution for an even lower interest rate. It’s not unknown for credit card companies to make a special offer to get an excellent customer.

Remember that cash advances, although convenient, generally carry a much higher interest rate than purchases, up to 18% or even higher. And even if your new card comes with an interest-free period, that doesn’t always cover a cash advance. Read the fine print before using the money machine.

Another point to consider is when the interest is charged: from the date of purchase, or from the date of issue of the monthly statement. The former, of course, will cost you more in the long run.

Store credit cards look attractive on the surface, especially if you tend to do much of your shopping in one place. Often store cards offer such enticements as no annual fees or special promotions such as free gift wrapping. However, store cards tend to charge higher interest rates than bank or credit union cards, so read the fine print carefully if you can’t pay off the entire balance.

Article correct at its author date: October 2007. Copyright Virtual Office Space, Any unauthorised reproduction of this article will be prosecuted to the full extent of the law. Credit Cards Australia.

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