Australians are cutting up their credit cards and moving on to other payment options according to Reserve Bank figures, which show that throughout 2018, the number of credit card accounts fell by 4.3%. Bringing the total number of credit cards in Australia to a little over 16 million, this is a big drop from peak numbers, when Aussies held an estimated 17.4 million credit card accounts.
Instead, the nation seems to be turning elsewhere to look for alternative payment options. Those RBA figures show that debit card transactions took up quite a bit of the slack, jumping 12% over the same period. Aside from debit cards, Aussies seem more likely now to use redraw facilities on their mortgage, using their own money rather than someone else’s.
According to CommSec senior economist Ryan Felsman, another reason Australians are abandoning their credit cards is their caution over the costs associated with having a card, along with their desire to avoid racking up credit card debt. With rewards cards having pared back their offerings, this has also given credit cardholders a reason to look elsewhere.
Moving into 2019, there may be even more reason for Aussies to move away from credit cards, as the introduction of the Government’s new regulations change the way credit card providers assess applicants. One of the biggest changes here involves card providers having to assess whether a new customer can afford to repay their credit limit within three years.
As for millennials, they are moving towards other options for buying now and paying later, with platforms like Afterpay allowing them to buy the things they want now, and pay them off over a period of a few months. According to a study by Afterpay, the number of young people with a credit card has fallen from 58% to 41% in the past 14 years.
According to the research, millennials are 37% less likely to have a credit card than older Australians. Why? Apparently, they view them as costly and risky. But, this may have a detrimental effect on their ability to access credit in the future. Used correctly, a credit card may help young people build their credit score, which can make it easier to get approved for a mortgage later on.
While new regulations now mean prospective home loan applicants need to have their credit cards in order before they apply, in the years leading up to that application, clean dealings with credit – such as a credit card – may help to create a credit score that lenders look on more favourably. So, what’s the solution?
Ditching the credit cards may not be the best idea for everyone. Having a credit card that provides you with the features you want – at a cost you can afford – can be beneficial. It could help you to build your credit score, giving you extras such as rewards along the way. But, you need to choose the card that works for you, while avoiding credit card pitfalls.
Overall, it means being smart with your credit card. While you may still choose to use your debit card, or even BNPL options such as Afterpay, a credit card could be a worthy tool to keep in your wallet. Which is where Credit Card EDU comes in. Offering seven easy-to-follow courses, Credit Card EDU makes it easy for you to learn pretty much all you need to know about credit cards.
With that knowledge, you can find the right credit card for you. You can learn how to use it so you minimise risk, and you can learn how to avoid pitfalls like only paying the minimum amount or racking up debt you can’t afford to pay back. Everything from keeping your credit card safe and protecting yourself from fraud, to features and rewards. It’s all there.
And the best part? All Credit Card EDU courses are completely free. All you need to do is sign up and get started. You can do all seven courses, or you could pick a few that suit you. Simply work through each module at your own pace – wherever you happen to be. You can then test your knowledge at the end of each course, to receive a certificate if you pass.
What’s the catch? There really is none. When asked why he started up the site, site creator Roland Bleyer said he simply wanted to create a free education source. Running sister site CreditCard.com.au, Roland gets thousands of questions each year from credit card users. He says, “It’s surprising the lack of understanding in the market, especially from people who are using their cards every day.”
Roland believes education in financial products provides the key to being able to use them effectively. “Considering it’s such an important issue,” he says, “So many Australian consumers lack the knowledge required to navigate the world of credit cards successfully.” Roland thinks every credit card user in Australia should at least complete the Credit Card Essentials course.
With the knowledge gained from this course, cardholders can work on minimising the interest and fees they pay, to develop a better relationship with credit. “There are around 16 million credit card users in Australia,” Roland says. “Most of them don’t even know the basics, such as how to read a statement. With Credit Card EDU, I want to start turning that around.”
It’s no secret millennials use tech – but their tech skills are used for more than just social media and gaming. According to the Afterpay study, millennials are using technology to manage their finances more effectively, with 30% using online tools to track their spending, and 7% using budgeting applications.
In terms of how they spend their money, 72% of millennials use technology to compare prices before they shop, compared to just 28% of older Australians. So, why not take that tech use further? By taking a free online course at Credit Card EDU, you can use your phone, laptop or tablet to learn more about credit cards – and make the most of everything they have to offer.
Whether you’re a millennial, gen X or baby boomer, Credit Card EDU has something to offer you. Let’s take a look at some of benefits Credit Card EDU could provide.
First and foremost, Credit Card EDU courses can help you improve your knowledge about credit cards. With seven easily navigable, easy-to-follow courses, you can choose to learn about the subjects that most interest you, or the topics you think you’ll get the most from. From how to avoid credit card debt to getting the most from your card, all the info is there at your fingertips.
One of the great things about Credit Card EDU is you can learn at your own pace. All courses are mobile compatible, so you can check them out on your mobile device on the train to work, or on your laptop from the comfort of your lounge. You could run through them all in one weekend, or you could spread them out over a couple of weeks – or even months. It’s totally up to you. Want to go back to something? Easy, just access the module and read through it again at any time.
When you learn from Credit Card EDU, you’re not simply learning about credit cards. You’re learning about how to manage your money, while using credit as an effective tool. Getting the hang of dealing with credit – buying only what you can afford to pay back and then repaying it all to avoid interest – can provide essential life skills that could help you enjoy a better relationship with money throughout your life.
Who doesn’t like getting a pat on the back now and again? When you complete each course on Credit Card EDU, you can take the quiz to test your knowledge. If you pass, you will be emailed a PDF certificate to show that you passed the course. Want to hang those certificates up on the wall or give them to your mum so she can stick them on the fridge? Why not!
Once you’ve completed the courses at Credit Card EDU, you can put all those skills and all that knowledge to good use. You can find the right credit card for your needs, knowing exactly what to look for and what to avoid. You can use your credit card to get what you want out of it, without getting snagged by common credit card mistakes. Whether you’re using your credit card to pay down debt with a balance transfer offer, or you want to earn rewards to head off on holiday, you’ll know how to do all that in the most effective way.
When you learn something that helps you out, it only makes sense that you want to pass on that knowledge to people you care about. Using the courses available on Credit Card EDU, you can better understand credit cards and how they work for different people. With that knowledge at your fingertips, you can point friends and family in the right direction as well. Or better yet, get them to take the courses on Credit Card EDU as well.
So, it’s time to get started. What’s the process when using Credit Card EDU? Keeping it simple, Credit Card EDU doesn’t have any complicated procedures or processes to worry about. Here’s how it goes.
Want to know more about the courses offered on Credit Card EDU? This is not school, and these are not dry textbook lessons. Each course and each lesson is set out to be easy to read, easy to understand, and easy to navigate. There is just enough info on each page, with a clean and clear layout.
Courses are well thought out, flowing naturally from one topic to the next. Without waffle you don’t need to know, lessons simply hit all the important points that are need-to-know in real life. Woven into each lesson are quotes and interesting insights, real life examples and case studies, and tips and activities. These can all help to take the info provided from theory to real life.
With that in mind, let’s take a look at the various courses on offer, and what they contain.
Credit Card Essentials
As the name suggests, this is the course that covers all the essentials in the world of credit cards. This course can offer a great grounding for anyone looking to learn the basics, and is definitely the course to do if you want to only complete one course. It can also provide the building blocks to carry forward on through the rest of the courses.
This course covers what a credit card is, and the reasons for getting a credit card. This looks into getting a credit card for purposes such as online shopping, overseas travel, quick payments at the checkout, building credit history, and doing a balance transfer.
It also looks at various credit card pitfalls, such as only paying the minimum payment, having a high credit limit, using a credit card when you can’t afford it, and allowing your credit card to rack up high interest charges. Not only does the course identify these issues, it offers advice on how to avoid them, allowing cardholders to have a better relationship with credit.
Credit Card Features
With this course, you will learn more about credit card features. When people compare credit cards, they often are swayed by the various features on offer. But, not all features suit every cardholder. In this course, you will learn more about credit card features, who they work well for, and how to determine whether having those features are worth the extra cost of the card.
The course first assesses standard credit card features, such as interest rates, interest free days on purchases, annual fees, foreign transaction fees and cash advance fees. It also looks at additional cardholders, anti-fraud security and contactless credit card technology. As these are fairly standard on all credit cards, this lesson provides helpful info on how to make the most of them.
The next lesson covers rewards. Over the past few years, card providers have wound back their rewards offerings. This makes it all the more important for cardholders to understand how their reward program works, and how to get the most out of it. This lesson looks at the various types of reward programs, as well as tiered points and common reward program conditions.
From there, the lessons move forward to cover other extras such as concierge services, extended warranty, guaranteed pricing schemes, international travel insurance, purchase protection insurance, and transit accident insurance. At the end of the lesson, you will know what these extras tend to offer, and what to look for to find out if they’re worthwhile.
Last of all, this course looks at promotional credit card features, such as balance transfer offers, purchase rate offers, no annual fee offers and bonus points offers. These offers sure can be enticing, but are they right for you? This lesson will tell you how to choose the best offer, what to be aware of, and how to make it work for you.
Credit Card Debt
According to a recent forecast by the RBA, the nation likely borrowed $29.7 billion on credit cards in December 2018. Taking into account the average 55-day interest-free period and the length of time Australians tended to take to pay off their credit cards last year, the interest alone on this Christmas spend is likely to cost around $237 million (6).
Credit card debt is something all cardholders should avoid. But to avoid debt, you need to know how it works. With this Credit Card EDU course, you will start by learning what commonly causes credit card debt. This could be only paying the minimum each month, spending more than you can afford, using cash advances, and using more than one credit card.
From there, the course goes on to look at ways to pay down credit card debt. This can involve working out a payment plan, paying down debt on multiple cards, and debt consolidation options. Is a balance transfer the right option? The last lesson on this course goes into balance transfers in detail, showing what to look for and how to make it work for you.
Using a Credit Card
One reason you may be apprehensive about applying for a credit card is you don’t know how to use it properly. According to Roland, Australians paid around $5.3 billion in credit card interest last year and $1.5 billion in credit card fees, with more than $1 million in foreign transaction fees alone. But, it doesn’t have to be that way.
Obviously, you don’t want to make any mistakes that could lead to financial problems. But, by arming yourself with the right knowledge, you can learn find out how credit cards work and how you can use them so that they are a functional financial tool
This course looks in to the various ways you can use a credit card to make a transaction, such as those you make in person, over the phone or online, or via direct debit. Next, you will find out more about credit card statements, including how to read your credit card statement, how to check your credit card transactions, and the various benefits of online vs. print statements.
Next on the agenda is credit card payments, looking at payment schedules, minimum payments, and ways to make payments. Last up is credit card security. This looks closely at using your credit card’s security features, keeping your credit card safe, online security tips, reporting unauthorised transactions and what fraud resolution process you can expect from your card provider.
Applying for a Credit Card
Applying for a credit card is the first step on your credit card journey. Let’s make it the right first step. In this course, you will learn more about choosing a credit card, taking into account credit card offers from your bank, credit card advertisements, and using credit card comparison sites, such as Credit Card EDU’s sister site, CreditCard.com.au.
You will find out more about the various credit card companies out there, including credit card issuers and brands, promotional features, and dealing with your credit card provider. Next, you’ll look at credit card application requirements and what card providers generally look at, such as age, residency status, financial situation, minimum income and employment, and credit history.
Additional considerations are also assessed, looking at credit limit requests, instant approval, declined applications, card approval and card activation. Basically, all the important stuff you need to know before you apply. Thinking of applying for a credit card? Hit up this course first.
Credit Card Fraud
There’s no getting round it. The idea of credit card fraud is pretty scary. But, if you want to protect yourself against it, it can help to learn more about it. This Credit Card EDU course goes into the various types of credit card fraud, including in-person card fraud, card-not-present fraud and identity theft.
It then looks at the common causes of fraud, which can involve card theft or the loss of a card, skimming devices, online hacking and scams. You will then learn about how to protect yourself from fraud, looking at physical card security, online security, protecting yourself against scams, and dealing with emails from your provider.
Last on the agenda is fraud resolution. How should you deal with fraud and what can you expect from your card provider? This lesson will look at all of that, plus some fraud resolution case studies.
Credit Cards and Credit History
Don’t know much about your credit history? This is the course for you. You will learn more about credit reports, including what info is included on credit reports, the different credit reporting bodies, who can access your credit history, and why you should review your credit history. Next, you’ll learn about how credit cards can affect your credit history, and how your credit history can affect your credit card applications and credit limit.
Once you’ve completed all the courses, you’ll be pretty knowledgeable indeed. You will have an extensive knowledge of credit cards and how they work, and you will understand the best way to find, choose and use your credit card to avoid pitfalls and make the most of this awesome credit tool. So, what happens now?
Roland suggests completing a 10 minute credit card health check, during which, you can get to know your credit card a little better. Armed with the knowledge you have gained from Credit Card EDU, you can look at your card more closely to find out whether it works for you.
This means looking at your credit card statements to find out what you’re paying in fees, what your card charges in interest, and how much you spend in a month. It also means assessing the features you are actually using, and what features you would like, such as no foreign transaction fees or cashback on your spending.
Now, it’s time to compare the card you have in your wallet with the cards currently available using an independent credit card comparison site like CreditCard.com.au. Whether you decide you need a no frills, low cost credit card, or an all-singing all-dancing card that’s abundant in features, you can easily compare the options to find the one that will work best for you.