Does your credit card suit your spending profile?

Published on November 25th, 2020
  Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
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Whether it is your first time getting a credit card or you already have one and you want to replace it, comparing your options to find one that suits the type of spender you are is vital. This can help you save, but it is also something that can keep you out of the red. It all boils down to what type of spender are you.

The big spender

Your credit card means serious business for you and you don’t mind spending up to $5000 on your card each month. This could also mean that you are a savvy swiper who uses your card to foot important expenses such as travel fees, purchasing white goods or the upkeeping of your home or car.

Big spenders also like to maximise their reward points without having to break the bank to do so. As a big spender, you might be willing to spend big bucks with your card, but you also try to meet your payments on time so that you don’t end up in the red. According to ASIC, 18.5% of Australians were struggling with credit card debt that now amounts to $45 billion.

As a big spender that wants to steer clear from attracting high interest rate charges, you might want to consider a low rate card that doesn’t come with high fees. It will also be beneficial to check if the card provides features that you will actually use instead of paying for credit fees that won’t help you become a savvy shopper.

The everyday spender

If you are someone that uses their credit card as their backbone of their budget to help you purchase everyday essentials, then you are an everyday spender. Using your credit card for essentials can be convenient, but it also requires careful planning so that you do not go over your credit card limit. A low rate card will also come in handy if you are using your credit card to foot everyday bills, groceries or purchasing items online. According to ASIC, consumers who switch to a low rate card can save $621 million in interest. But to make the most out of your card it is important to create a budget that your credit card will work around so that you don’t overspend. Reward cards can also help you reduce costs, but keep in mind that it can come with a higher fee.

The habitual spender

You are more likely to whip out your credit card to swipe for a lot of things. Sometimes you will swipe for items that are not necessarily a necessity. This can result in credit card debt that can become harder to manage the more you continue to swipe.

This also means that you could be in a constant cycle of having to pay off your debt each month. If you are looking to stay atop of your debt you might consider taking out a balance transfer or a no annual fee credit card that can help you deal with the debt you have. However, keep in mind that these come with a promotional period that can revert to a high interest rate once the period has expired.

Comparing your various options can help you find a card that is suited towards your spending, but it also pays to re-evaluate the way you spend to see if there is an area that you will need to cut back on to avoid overspending.

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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.

The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.

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