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Tip Store: Banking: Credit Cards

​Using Credit to Earn

I always get baffled looks when I tell people that I earn money with my credit card. It is quite easy, but you have to be disciplined and look for the best rewards system. We have a 50 day interest free credit card with the Commonwealth Bank. I find their rewards system useful as they give fuel vouchers when you redeem points. I personally am not interested in holidays or wine etc, but free fuel works for us. You can also redeem the points to pay for the annual fee on the credit card, hence no fees whatsoever. So, we make an effort to pay all the bills, shopping etc. anything that can be paid with a credit card. Once a year we redeem the annual fee and the rest of the points to get the fuel vouchers. Last year we received $250 in free fuel. Might not sound much, but it all helps. Now, this only works because we ALWAYS pay off the credit card every month and accrue NO interest. We do NOT use our credit card to actually buy things and pay them off over time. That's a no go. Our first rule is to never buy anything we do not have the money for. If we want a new TV, we SAVE the money and then buy it. We do not put it on the credit card EVER. Well we do, but we have the money in the savings account to pay it off right away. Anyway, hope you find this tip helpful.
​- Contributed by Uschi, Port Stephens, 23rd May 2009

​Points Pay CC Fee

I use my points accrued by using my credit card to also pay for my yearly credit card fee. It is about $120 and I pay entirely in points. When you see the credit card has been debited with a yearly fee contact the bank and if you have enough points(about 15,000) they will eventually reimburse you)This means you have a credit card which costs you absolutely zero.
​- Contributed by Gale, Baldivis, 14th January 2009

​Use a Commonwealth Platinum Card & Save $6,000.00 in Flights!!

​My husband and I collect Qantas Frequent Flyer Points to redeem for free flights. I have found this to be the most productive use of points which has saved us $3,500 each on return flights to Paris...a much higher value reward than DJ vouchers!! To accumulate points quickly we have had to have Diners, Amex and Visa cards all working at once as Diners and Amex cards are not accepted everywhere but earn the most frequent flyer points. This is rather annoying having to juggle so many statements. However, I have now found the Commonwealth Platinum Visa/MC which has as good a conversion rate from $ spent to award point to Qantas point as Diners or Amex. ("Convert one Commonwealth Award point to one Qantas or Velocity Frequent Flyer point.") Now I have the one statement each month which is so much easier to manage. With a Platinum card you are required to hold a higher credit limit ($8K for MC & $10 for Visa) than I would ideally like to have but with only one card to manage and earning great frequent flyer points I am managing the higher credit limit just fine. - Contributed by Karen Adele Baigent, 3rd January 2009

​Use Credit to Profit

​Approximate $ Savings: $50/month
​My tip is to get the most out of your credit card for no cost to you. However to do this you need to be in total control of your credit card usage. We use our credit card for all of our monthly expenses and pay off the card at the end of each month. This means we earn interest on our savings, use the credit card at no fee and accumulate reward points that I use to obtain vouchers for Darryl Lea, Just Jeans, Harvey Norman etc which I then use for birthday and Christmas presents. We average a $50 voucher a month.
​- Contributed by Donna, Bray Park, 1st January 2009

​Reward Points Pay for Yearly CC Fee

​Approximate $ Saving: $120
Re Susan of Warradale who uses her credit card to obtain points and then free gifts /vouchers I would like to add to that. I use my points accrued to also pay for my yearly credit card fee. It is about $120 and I pay entirely in points. When you see the credit card has been debited with a yearly fee contact the bank and if you have enough points(about 15,000) they will eventually reimburse you. This means you have a credit card which costs you absolutely zero.
​ - Contributed by Gale, Baldivis, 14th January 2009

​Smart Credit Earns Rewards

​Approximate $ Savings $150 this time We use the Commonwealth Bank for our banking and we have a credit card and a savings account. Basically what we have done is worked out how much we would have to pay on our bills each fortnight. I have it set up so that each fortnight a specific is amount is paid off each bill via the credit card. I set up so that it happens the day I get paid. This means money goes into the savings account and I transfer the bill money straight to the credit card (does it all automatically). So we are using the credit card but the money is paid off it straight away - there is no debt.

​Our credit card has a reward system of spend $1 and get 1 point. We also do that with the shopping money, car rego, presents etc. We will use the credit card and then pay off the credit card straight away. With all this point earning, we accumulate a lot of points. For the school holidays this year we had enough points to claim to take a family of 5 and have $50 spending money to Greenhill's Adventure Park for the day. That was 4 tickets of $25 each (our 3 year old was free) we saved and the $50 we had we got lunch for all of us (and souvenirs for the day also). If we hadn't been able to get the tickets this way we would probably have never gone as it is very expensive and something we couldn't afford normally. But the great thing with the rewards is that there are heaps and heaps of rewards you can choose from.
​ - Contributed by Kari, Seaford, 20th February 2008

​A Credit Freeze

​Approximate $ Savings: We have saved hundreds of dollars so far.

​We were finding it really hard to resist the urge of purchasing items with our credit card so we froze them...literally. We put them in a plastic zip lock bag, filled it with water and put it at the back of the freezer. We have saved hundreds of dollars with this idea because while the credit cards defrost we have around 20 minutes to really consider if the purchase is necessary. the majority of the time we end up putting the cards back in the freezer, hence our saving lots of money. a few times we have gone ahead and used them, so I can also confirm that freezing the cards does not prevent them working in anyway.
​- Contributed by Sharon, Halls Head, 5th June 2007

​Visa Debit Card is Convenient and Saving Money

I use a credit union banking account with a VISA card. I don't have credit available on this card, I only use my own money but whenever I make a purchase for anything I always choose CREDIT (EFTPOS) because that way I do not pay any bank fees.
​- Contributed by Melissa, Plumpton, March 10th 2005

​Cheap Introductory Rates

​You can get your debt down by taking advantage of the cheap introductory rates offered by credit cards for transferred balances, however you need to be really organised or you'll end up worse off. Firstly - cut up all your existing cards, then scope out the market for the best introductory rates - some cards offer 0% on transferred balances. Apply for the two best rates and split your outstanding debt and transfer onto the new cards (which you also cut up on receipt!). Then pay off as much as you can afford each month. One month before the end of the introductory period repeat the process until you've paid it off. It sounds hard but once you're into the swing of it you'll find it really fun to hunt out the best deal and watch your debt decrease... Good luck and remember you can always get professional help - http://www.cclcnsw.org.au/ is a great place to start.
​- Contributed by Kirsty, Dulwich Hill, March 23rd, 2005

​Consolidate Debt

​Try to consolidate the debt (perhaps in a low interest loan) and close the visas. If that's not possible, pay your chosen amount into the highest interest visa. After making the payment call the financial institution straight away and ask them to decrease your credit limit to the amount you just paid. This way there is no temptation to redraw. I'm using this technique myself at the moment and it works beautifully. Finally invest in a Debit Visa card (where you draw on your own savings) so you don't get caught in the same trap again.
​- Contributed by Sarah, Joondanna, March 21st, 2005

​Look For Special Rates for Transfers

​ANZ and Virgin are currently offering a credit card with a reasonable rate of interest and any balances that are transferred over from other credit or store cards are 0% interest for six months. This would certainly give you a chance to mow down the outstanding amount on your credit card.
​- Contributed by Maureen, Frankston, March 19th, 2005

​Use Interest Free Periods

​Take advantage of the banks and institutions that are offering 6 months interest free on all balance transfers. This way you can pay off the balance without having to accrue any more interest on the balance that you have. Once you get the new card do not put it in your wallet but in one of those safe places that you always forget about and then you can't be tempted to use it.
​- Contributed by Jodie, Cranbourne, March 18th, 2005

​Make a Budget

​Firstly sit down and make a yearly budget. List all the things under the month they get paid for. You can do this on your computer using Excel. Make sure you put in a realistic amount. I add 10% on top of the last year's bills. Also remember that you need some money for personal activities, otherwise it won't work. Once you have a total for each month, work out your income for each month. Remember that June and December have 5 weeks this year. That means you can save that little bit extra those months. Now (this is important), allow an extra 10% for those little unexpected bills. Then you go to the tip store and copy all the cheap ones that you think you can manage (I am saving a fortune by making my own washing powder!). Buy bread at Aldi or your nearest cheapest supplier (check out IGA or Go Lo) - and buy enough for a fortnight and freeze it! Milk is the next big expense in our house. We mix it half and half with powdered. Meat is very expensive - what is wrong with dishes made from tinned meat and fish? Or better yet, buy a cheap cookbook with meatless meals in it. My total food bill is just under $220 for a four-week period. If you have to travel by car, try opening the window and turning the fan on - NOT the air conditioner. It can bring down your fuel consumption by up to 50%. Think outside the square and you will be amazed by what you can save. If you would like a copy of my budget I would be happy to send it to you if you email me. Good Luck.
​- Contributed by Lesley, Rooty Hill, March 17th, 2005

​Pay Off The Lowest Amount First.

​Pay just the minimum off the higher card for the moment. For the card with the lowest total amount owing, pay the minimum PLUS any extra money you can save each month. Start by cutting back on absolute non-essentials such as take-away or CD's. Calculate the amount you would have normally spent on these discretionary items each month and then add this figure to your minimum payment on your first credit card. Don't reduce the amount as the minimum payment goes down. Keep it at the amount you first come up with, aka Minimum + Savings on discretionary extra's. Remember that you are only covering the minimum monthly payment on your second credit card for the time being. When you have paid off the first card completely, cut it up and then add ALL the total payment you were making on that card, to the minimum monthly payment you're making on the second card. You will be surprised at how quickly you will get them paid off. Don't try to pay both off together, you will get frustrated and it will seem to take forever to be credit debt free. Baby-step this one and you'll get there! TIP: Get your credit card company to direct debit the payment from your account on a date just after the statement issue date. It will save you being tempted to spend some of your payment on other things.
​- Contributed by Michelle, Horsham, March 17th, 2005

​Compare Interest Rates

​For paying off the 2 credit cards the fastest--compare the interest rates of both cards and send the minimum payment to the one with the smallest interest rate and the rest of the budgeted money to the one with the largest interest rate. When the first one is paid off, all of the money can go to pay off the 2nd one.
​- Contributed by Trudy, Point Clare, March 17th, 2005

​Two Ways to Pay It Off

​We had credit card debt and managed to pay it off two ways: first to have our mortgage re-evaluated then adding more to our housing loan which was lower than the credit card interest and also with a personal loan which was a lower interest as well. Now we are credit card free however we have a Visa debit card (because sometimes you need a Visa card, right!), which immediately debits off our savings account so we must have the cash in the bank. As for saving $ per month: get everything off credit card, no more using it and cancel all extraneous entertainment for the time being. Good luck,
​- Contributed by Aileen and family, Dunlop, 17 March, 2005

​Chop Up The Credit Cards

​First of all, chop up those credit cards, they are obviously no use to you and will allow you to amass more debt. Instead, find the cheapest personal loan rate that you can get and pay off the credit cards with this loan (because personal loans have a lower interest rate than credit cards or you can try to add it to the home loan) then you need to be disciplined to pay off not only the interest but also the principle on the loan. Pay this off as your primary goal, and then after you have paid it off, still put the same about of money in per week/fortnight/month into a bank account and later you will find that you have a lot of savings.
​- Contributed by Joanne, Williamstown, March 17th, 2005

​Four Steps to Being Credit Card Debt Free

1. Stop using them (cut them up if necessary)
2. Set aside as much as you can for the payment (re-evaluate spending habits, budget etc..)
3. Pay the minimum payment on one card, and on the other card, put the rest of the money (work out first which card will save you more money)
​4. As soon as that card is paid off, put all the money on the other card.
​- Contributed by Jacqui, Jannali, March 17th, 2005

​Two Ways to Eliminate Credit Card Debt

​There are two ways you can do it which will reduce your interest but you have to be very strong and cut up both cards. You can either get an extension with a draw down facility on your home loan if you have one, which will mean you pay it off at a home loan interest rate rather than high credit card rates, and as you pay it off you are able to draw on the money you've paid off if you need to for emergencies. Or you could ask a credit union for a personal loan to pay the two off, which will also have a lower interest rate than the cards. Then pay high monthly repayments (as much as you can afford) and it will be gone in no time. Shop around the credit unions for the lowest interest rate.
​- Contributed by Larissa, Bellevue Hill, March 17th, 2005

​A Good Money Saving Trick

​This may or may not help but a good trick, which works for me in saving money, or paying something off is to have an amount automatically diverted from each pay so that I can't get to it. When used for saving this is called the pay yourself first principle. For most people paying all their bills and then trying to save what's left doesn't work - there isn't any! It's amazing how you can get by without what never passed through your hands. This is what the taxman does - everyone pays the taxman without fail no matter what their money managing skills! Also you may want to make minimum repayments only on the lower interest card up until the interest goes up. After that you would probably still pay less on this card as despite the higher interest it's being calculated on a lower balance.
​- Contributed by Gerard, Hurstbridge, March 16th, 2005