Tips to cope with the Christmas Season Credit Card pain

It's the Christmas season again and that means spending up big on presents, holidays and shopping bargains.

Here are some tips to help you get through the season in better shape than the last.

Get a low interest credit card
Avoid using the cash advance facility
Transfer large outstanding balances to a new card using a balance transfer deal
Keep track of the interest free period
Keep an eye out for special deals
Keep to your budget

Get a low interest credit card if you are going to spend a lot over Christmas

If your current card's interest rate is not below 12%, you can do better. For example:

St George Vertigo Credit Card - 11.89%p.a.
Aussie MasterCard Card - 11.99% p.a.
ANZ Low Rate MasterCard Credit Card - 11.99%p.a.

Click here to compare your current credit card interest rate.

* Interest rates are current as at 12.12.08, please check details before making an application.

Avoid using the Cash Advance facility

Using the cash advance facility on your credit card is usually an expensive option and something to avoid if possible.

Do not draw out cash to purchase items always use the card to purchase your goods.

Any cash that you draw from your credit card will most likely attract interest immediately as opposed to having an interest free period of up to 55 days that is applicable to purchases of goods.

Furthermore, the interest rate charged on purchases will more than likely be several percentage points less than the cash advance rate. This difference can be as much as 8%.

If you do need to make cash withdrawals then consider a credit card like the St George Starts Low Stays Low credit card. It currently has an interest rate of 12.99% on both purchases and cash advances with up to 55 days interest free on purchases, which make it a good, all round choice.

Look for interest free days on your credit card purchases

Most credit cards have an interest free period before attracting interest payments. If you pay off the outstanding amount prior to the end of the interest free period you will pay no interest. Interest free periods vary from none to up to 55 days (almost two months). Here are some long interest free credit cards for your consideration.

Aussie MasterCard Credit Card -55 days interest free and 11.99% on purchases.
NAB Low Rate Visa Credit Card -55 days interest free and 12.40% on purchases.
St George Vertigo Credit Card - 55 days interest free and 11.89% on purchases.

Combine credit cards and save interest with a Credit Card Balance Transfer

By transferring all your credit card debt into one credit card account, you can save money on interest and get some new perks.

If you:

can pay off the balance within 6 months consider the St George Vertigo Credit Card - 0% on balances transferred for 6 months.
have a high income and a high outstanding balance then consider the Citibank Platinum Credit Card - 4.9% for life.
spend a lot of time travelling by air then consider the ANZ Frequent Flyer Visa Credit Card - 2.90% for 12 months.

Look for special deals on credit cards

The Aussie MasterCard has a special offer where you will pay 0% interest on purchases for the first 6 months. If you don't have any outstanding balance, but are looking to splurge then it might be a good choice.

Keep to your budget

Just because you have a credit limit on your credit card that doesn't mean that is your budget for the Christmas season. Sit down and work out what you can afford to spend, how long it will take to pay it off and then stick to it.

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