Make Your Credit Card Work For You This Christmas
Smart Money

Make Your Credit Card Work For You This Christmas

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Whether you start your Christmas countdown the minute Coles puts out its mince pies each September, or your festive planning only begins as the day dawns on Christmas Eve, there’s no denying Christmas seems to come faster each and every year.

One day you’re complaining about the cold and wondering if winter will ever end, and the next day you’re eating your first advent calendar chocolate and humming along as George Michael laments over what happened Last Christmas.

But, just as we underestimate how quickly Christmas can sneak up on us, many of us also seem to be somewhat surprised by how much Christmas costs us each year. It’s only when January rears its head and ‘normal’ life begins again that we check our bank balances and collectively wince.

Last year, Australians spent around $30 billion on their credit cards in December. That adds up to a lot of turkey. Or seafood buffet, if that’s more your thing. The point is, we spend big each year on our credit cards just to cover the silly season.

While some will be able to clear that pesky credit card bill with their January paycheque, others will continue to pay interest on theirs throughout the year. In fact, it’s quite possible they will still be paying off last Christmas as this Christmas rolls around.

So, what’s to be done? With Christmas fast approaching, this is the time to make a change. Contrary to popular opinion, Christmas doesn’t have to break the bank. There are plenty of ways to save money over the festive period, but you have to put in the effort.

One of the biggest changes you can make concerns your credit card spending. By taking advantage of rewards and introductory offers, by utilising credit card features and learning what could potentially trip you up, you could actually make your credit card work for you.

Instead of fearing January and the consequences of bad decision-making, instead of spending the whole of next year with the dark cloud of debt hanging over you, you could get smart with your credit card this Christmas – by making changes now.

Creating a Budget

Last year, ASIC released one of its exceedingly interesting infographics on Christmas spending.

It showed that last year, Aussies planned to spend around $955 over the holiday season, with an estimated average spend on Christmas gifts of $646 in Western Australia, $634 in New South Wales, $609 in Queensland, $562 in Victoria, and $505 in South Australia.

What was the plan for covering those costs? While the majority of survey respondents said they would use their savings, 36% intended to stick it on their credit card. So, for those who paid with plastic, how long would it take them to pay off their Christmas credit card debt?

Happily, 82% expected to pay it off within six months. However, 11% said they’d need up to two years to clear their debt, 4% said it would take more than two years, and amazingly, 3% said they never expected to pay it off.

So, what’s the first thing you can do to avoid that Christmas credit card debt trap? Just like Santa, you can make a list. But, instead of cataloguing the world’s children as naughty or nice, your list will contain your proposed Christmas spending.

This could cover the various presents you need to buy, and how much you want to spend on each person. It could also include entertainment costs, such as food and drink, as well as travel expenses, if you’re planning on taking a trip.

By creating a budget, you can decide in advance what you want to buy and how much you want to spend, helping you to avoid overspending in the frenzy of Christmas shopping. Tracking your spending can be incredibly helpful. ASIC’s MoneySmart’s TrackMySPEND app could help with this.

Understanding your Options

According to statistics released by the Reserve Bank of Australia, the nation’s total credit card debt rose to its highest-ever level following last December’s spending spree, leaving shoppers owing a record $52.9 billion on plastic.

If you want to avoid racking up the credit card debt this year, you may want to consider applying for a card that can help you keep costs down. By understanding the various options out there, you can choose the card that makes your money work, helping you to avoid debt in the long term.

  • Cards with 0% purchase offers provide a fixed interest-free period on purchases, usually ranging between three and eighteen months. You can use the card to cover your Christmas spending, to then pay it off before the end of the intro period, when interest starts accruing.
  • Most cards charge an annual fee, but by choosing a card with no annual fee – either as an introductory offer or offered over the life of the card – you can save money that could be spent more wisely elsewhere.
  • Allowing you to earn points on your spending, rewards cards and frequent flyer cards could help you save on Christmas gifts or Christmas travel. You can redeem points for gift cards, merchandise or travel, plus you can earn points on all the rest of the Christmas shopping you put on your card.
  • If you have a balance on an existing credit card, you could save on interest by transferring it to a balance transfer card. Over an introductory period, you would pay low or no interest, allowing you to pay off your balance faster.

Over the longer term, choosing a credit card with a low annual fee and then clearing your balance each month could provide the best way to save money on your credit card. Always think about what would work best for your personal circumstances.

Making Interest Savings

Now we’ve touched on the various credit card possibilities, it’s time to look more closely at some of those options to find out how your credit card could help you save money this Christmas. Let’s start with interest.

With a total credit card spend of $30 billion last December, that would leave each credit cardholder with a holiday debt hangover of around $1,786 on average. So, what would it take to pay off that debt?

  • If you were making the minimum repayments on a card with an interest rate of 20% p.a., you’d pay back $6,522 in total, over a period of 22 years and 2 months.
  • If you kept that 20% p.a. card and aimed to pay it off within two years, paying back $90 each month, you’d repay a total of $2,143. This would save you $4,380 in interest, and more than 20 years of being in debt.
  • If you opted for a balance transfer offer, giving you 0% p.a. with no balance transfer fee, to then pay off your transferred balance before interest started accruing, you could save $357 over the above two-year option.


Of course, these examples don’t factor in any further credit card spending, which would add to the overall total and the amount paid to the provider in interest.

Is there another option? Instead of relying on a balance transfer to pay off Christmas debt, you could get proactive, by applying for a card with a 0% p.a. purchase offer before you start your Christmas spending.

By choosing a card with a long 0% p.a. purchase offer, you could use that card to cover your Christmas spending – whether that’s Christmas presents or a trip overseas – and then pay it off before the intro period ends, to enjoy interest-free shopping.

If you want to make this work for you, it can help to calculate how much your monthly repayments will need to be to pay it all off within the intro period, and then set up automatic payments from your bank account.

As an alternative option, some cards offer interest-free shopping with partner retailers. With one of these cards in your wallet, you could do your Christmas shop, and then pay off what you owe over the interest-free period.

If you’re a keen David Jones shopper, the David Jones American Express Platinum Credit Card could be a great choice. Aside from its many other DJs extras, this card offers a Christmas Deferred Payment Option, which allows you to delay your payments for purchases made at DJs between 1 November and 24 December, until February the following year.

Using Rewards

Obviously, the idea behind rewards cards is that they reward you for your spending. They do this by providing you with a certain number of rewards points for each dollar you spend. You can then redeem those points within the rewards program, for travel, merchandise or gift cards.

With this in mind, you can see how a rewards card could be a great option come Christmas. Not only could you earn points on all your Christmas spending, you could also use the points you’ve earned to buy Christmas gifts or even an overseas trip over the festive season.

How could your rewards card reward you this Christmas? Well, that would depend on the spending you do most. If you tend to rack up spending on food and alcohol, you could choose a credit card affiliated with Coles or Woolies, allowing you to maximise your points earn.

If you plan on taking a trip over Christmas, you may want to choose a credit card that provides points on your travel spending, while also offering extras such as airport lounge access and overseas travel insurance.

Once you’ve got enough points in your pocket – we’re talking next Christmas now – you can use the points you earned this Christmas and throughout the year to reduce your spending.

  • Gifting gift cards: What do you buy for someone who has everything? A gift card, of course. Most rewards programs allow you to redeem points for gift cards for a wide selection of retailers, with gift card amounts ranging from $25 to $500. If you don’t want to gift the gift card, you could use it yourself to buy the perfect present instead.
  • Booking travel: Whether you have rewards points or travel credit, you can use that stockpile to book travel over the festive period. This could cover flights, hotel stays, car hire or experiences. It could take you to see your family, or bring them to you. If you don’t have enough points to get where you want, you may be able to utilise a ‘points plus pay’ option to make up the difference.
  • Using statement credits: Some rewards cards allow you to use your points as statement credits. This allows you to pick certain items on your credit card bill that you want to cover with your points. You may also be able to cash in your points as a direct deposit into your bank account, so you can spend them on whatever you please.
  • Redeeming points for merchandise: Most rewards programs allow you to redeem points for merchandise within an online rewards store. From coffee machines to sports equipment, you could use your points to buy the perfect gift for someone special.
  • Booking experiences: Whether you’re looking for an experience for someone else, or an experience you can share, your card could allow you to redeem your points for that once-in-a-lifetime event or experience as a special Christmas gift.


As with any type of credit card, when it comes to rewards cards you need to be smart – in both choosing them and using them. To make those points count, choose a card that rewards your spending, while giving you access to rewards and features you value.

Clearing your balance each month by the due date can help you avoid interest accruing. High interest payments and annual fees can negate the value of any points you earn, so be sure to weigh up how much you are paying out against what you are getting in return.

Utilising Introductory Offers

The credit card industry is seriously competitive, which means card providers need to work hard to win customers. One way they do this is with the introductory offer. These offers entice new customers with bonus rewards points, balance transfer or purchase offers, or a low annual fee.

By choosing a card with the right offer, you can make it work to your advantage this Christmas. But, you need to know what each offer can provide, by looking at the pros and cons of each.


0% Purchase Offer: With this offer, you will pay no interest on purchases over the introductory period. This could let you do all your Christmas shopping interest-free, to then pay it off before interest starts accruing.

  • Choose a card with an intro period that will allow you to pay off your entire Christmas spend.
  • Find out what rate your purchases will attract at the end of the intro period.
  • Consider the card’s annual fee. A card with a high annual fee may negate any savings you make on interest.


Bonus Points Offer: With this offer, you will be credited with a certain number of bonus points to spend within the card’s rewards program. This could let you take a Christmas trip or buy Christmas gifts.

  • Look at what you can do with the points on offer, for example where they could take you, or how much you could redeem them for in gift cards or cashback.
  • Find out if there is a required minimum spend to be eligible for the points. If it’s more than you can afford to pay back within each month, it may not be worth it.
  • Weigh up how many points are on offer against how much you will pay in annual fees.


Balance Transfer Offer: With this offer, you will pay low or no interest on transferred balances over an introductory period. This could let you save on interest, allowing you to pay off what you owe faster, so you’re in better financial shape for next Christmas.

  • Choose the offer with the lowest introductory interest rate over a period that allows you to pay off your transferred balance.
  • Find out what interest rate the transferred balance will attract if left unpaid after the intro period ends.
  • Avoid spending on the card until the balance transfer has been paid off.


No Annual Fee Offer: With this offer, you will pay no annual fee for an introductory period or for the life of the card. This could give you some extra cash to spend on your Christmas shopping, or you could use it to take the family out for a nice meal over the festive period.

  • Find out what the annual fee will revert to after the intro period ends.
  • Think about what the card has to offer in features and extras to work out whether the standard annual fee is worth it.
  • You may choose to cancel the card before the standard annual fee kicks in, allowing you to maximise what’s on offer while paying as little as possible.


Getting the Most out of Credit Card Features

In the war for market share, card providers work to make their product as appealing as possible. Alongside introductory offers, providers also use features and extras to tantalise new customers. Fortunately for you, many of these features can be of benefit at Christmastime.

Plenty of credit cards offer retail cover on purchases, most often in the form of extended warranty, purchase protection and price guarantee. When buying Christmas gifts – whether for yourself or for others – these covers can offer some useful benefits.

  • With extended warranty, your credit card will usually double the manufacturer’s warranty, up to a maximum of 12 months. This can come in especially handy on big ticket items such as electronics and toys.
  • Purchase protection can offer cover on items purchased on your card if they are lost, stolen or damaged after you buy them, usually within a 90-day timeframe.
  • As for price protection, this can help ensure you get the lowest price on your Christmas shopping – on the more expensive items at least. If you buy an item and then find it in another store nearby at a lower price, your card may reimburse the difference. Purchases usually need to be made instore and cannot be compared to prices found online.


If you plan on jetting away this Christmas, your card could make your trip even more exciting with the various features it has to offer. You could enjoy airport lounge access, VIP hotel membership perks and airport limo service.

Many credit cards also provide a range of travel insurances, which could offer valuable cover while helping you to save on standalone insurance. As with the retail covers, you need to read the PDS to find out more about what’s on offer from your credit card travel insurance before you rely on it.

Making Smart Decisions

While credit card providers may compete for customers, they rarely give anything away for free. If you want interest-free Christmas shopping or bonus rewards points to spend on a Christmas vacation, you need to understand what your provider expects in return if you want to make the most of them.

That means being aware of all fees involved and any small print that may apply, while also avoiding any interest accruing. Card providers pack cards with all these extras as they hope to gain something back from you. It’s up to you to make sure you give them only what’s strictly necessary.

In terms of annual fees, these may be higher on feature-packed cards or high-earning rewards cards. If you’re willing to pay a higher annual fee to enjoy these extras, make sure what you get back is of higher value than what you’re paying out.

As for other fees, you should be able to avoid most of them, such as late payment fees and dishonour fees. If you plan on doing Christmas shopping at international retailers, or you’re thinking of travelling overseas, a card with no overseas transaction fees could save you heaps.

Interest is a big one. Cards offering an abundance of extras usually charge more in interest. As soon as you start paying interest though, the value of those extras decreases. If you want to get the most out of all your Christmas extras, clear your balance by the due date each month.

Getting Approved for Christmas

There’s no point applying for a card for Christmas if it’s not going to arrive until after the stockings are stuffed and the turkey has been digested. Check out the following table to get a rough idea of how long it will take to apply for a card so you can get your application in on time.

Card provider

Application time

Approval time

Estimated time to receive card

American Express

10 minutes

60 seconds

5 to 10 business days


5 minutes

60 seconds

5 to 10 business days


5 to 10 minutes

60 seconds

Up to 7 business days


10 to 30 minutes

60 seconds

3 to 7 business days

Bank of Melbourne

5 to 10 minutes

60 seconds

5 to 7 business days

Bank of Queensland

10 to 20 minutes

Within 2 business days

7 to 10 business days


15 minutes

60 seconds

7 to 10 business days

Commonwealth Bank

10-15 minutes

60 seconds

Up to 10 business days


15 minutes

60 seconds

3 to 5 business days

ME Bank

5 to 10 minutes

Within 2 business days

5 to 10 business days


15 minutes

60 seconds

5 to 10 business days


10 to 15 minutes

60 seconds

7 to 10 business days

Suncorp Bank

10 minutes

60 seconds

5 to 7 business days

Virgin Money

10 minutes

60 seconds

Up to 10 business days


10 minutes

60 seconds

5 to 10 business days

It should be pointed out that these application times are just estimates. Credit card applications can be shortened or drawn out according to the circumstances surrounding each one. If you want to help speed up your application time, make sure you meet eligibility requirements and provide all documentation required.

Smart Money-Saving Tips at Christmas

Having covered pretty much all there is to know about making your credit card work for you this Christmas, it’s time to look at a few ways you can save money elsewhere.

  • Clean up on your clear-out: According to Gumtree Australia, more than 89% of Australians have on average 25 unwanted goods at home, adding up to about $4,200 per household if sold. Gumtree’s 2018 Second Hand Economy Report revealed that the second-hand economy is now worth $34 billion dollars. Want to get some quick cash for Christmas? It could be time for a clear-out.
  • Know your way around online: Shopping online could help you save loads of money this Christmas. Auction sites such as eBay allow you to buy new and used, helping you to save even more by bidding on items. When using other online retailers, check out if there are any promo codes that could help you save some cash, or provide free shipping.
  • Get social with your Christmas shopping: By following your favourite brands and retailers on social media, you will be alerted when exclusive deals and discounts are on offer. Subscribing to newsletters can also provide valuable information on discount days, or one-off discounts for your first shop.
  • Personalise cards and wrapping: Cards and Christmas wrap often end up in the recycle bin before Boxing Day dawns. Instead of wasting money on these items, you could make them more valuable to the recipient, perhaps by creating cards with photos of your family, or by taping your kids’ drawings together to create wrapping . Or, you could dispense with paper altogether and create a video card by recording a video message.
  • Learn the art of Christmas gift hacking: To save on Christmas gifts this year, you could agree on a spending limit or do Secret Santa among friends or family, or you could only buy for the kids, not adults. Op shops can provide a treasure trove for Christmas gift hunters, or if you want to get cute, you could give redeemable vouchers for tasks like babysitting, homemade dinners, picnics, or even housework.
  • Consider the Four Gift Rule: With this rule, you buy only four gifts for your loved ones, following the principles of “Something you want, something you need, something you’ll wear, something you’ll read.” These can be adjusted, of course, but it’s all about limiting presents and making them count. There’s a lot to be said for restraint and moderation, which is usually lacking at Christmas time.

Planning for Next Christmas

We know, we know. We shouldn’t be talking about next Christmas before we’ve even had the chance to celebrate this one. But, a little planning can go a long way. While it may be too late to try some of these tricks this year, you can always keep them in mind for next year.

  • Start saving: By putting away regular amounts each week, you could make Christmas much less stressful next year. Saving just $20 a week could give you $1,000 to put towards next Christmas. 
  • Check out the sales: While shopping might be the last thing on your mind, post-Christmas sales could help you save big on presents and decorations for next year. A 0% p.a. purchase offer can provide a fantastic way to buy these cut-price items, to then pay them off interest-free over the intro period.
  • Spread out your shopping: It can seem somewhat depressing shopping for Christmas in March, but by buying a few things each month, you can spread the cost, making it easier come December. When using your credit card, you can pay off these purchases month-to-month as they should be more manageable, helping you to avoid interest adding up.
  • Consider layby: If you are thinking about buying larger gifts for next Christmas, you can layby them a few months ahead so you can pay them off over time. Again, a 0% p.a. purchase offer can provide another way of doing this.

Ready for Christmas? Now, where did we put that mistletoe?

Founder - Roland B Bleyer

Roland Bleyer

Founder of Roland has extensive knowledge about credit cards in Australia. Known as a credit card expert, he has been featured on tv and in various publications.
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