Complete Guide to the Velocity Frequent Flyer Program

Different credit cards serve different functions. If you choose the right card for you, it should help to manage your debts.

Low Rate Cards

A low rate credit card offers low interest rates on purchases. This is the ideal choice if you tend to carry a balance each month because if you aren’t paying off your balance in full each month, you’ll be paying interest on your debt. The smaller the interest rate, the less you’ll pay on your purchases.

Other credit cards that offer benefits like rewards and Gold and Platinum perks can charge higher interest rates. While the extra rewards on these types of cards might feel like a win, it’s also possible you’re paying out more in interest payments than you ever receive back in rewards. And, the better the perks, the higher the annual fee in most cases, which can add to your debt load.

Think about how much you are paying in interest on your credit card and weigh up what you are getting from the card. By choosing a card with a lower interest rate, you may be able to save money.

No Annual Fee Cards

If you pay off the balance of your credit card in full and on time each month, then you won’t be charged interest. If that sounds like you, then you could also save more money by choosing a card with no annual fee.

It may also be the case that you only use your card for emergencies. If you hardly ever use it, then you probably don’t want to pay for it. A no annual fee card could be the ideal choice.

There are numerous credit cards out there that offer either no annual fee for the first year, or no annual fee ever. Considering annual fees can range from around $50 to over $400, the savings you make could really add up.

Think about what else you want from the card as well, as you may find that no annual fee cards are a relatively low-frills option.

Balance Transfer Cards

A balance transfer credit card can be a great tool for paying off existing credit card debt. You can transfer balances from your existing credit and store cards to a card with lower interest rates – or no interest payable at all – for a certain period of time.

This allows you to use the time wisely, and pay off as much of the debt as possible. Always be aware of what the introductory interest rate will revert to, and when the introductory period will finish.

Due to the fact that some balance transfer cards have slightly higher standard interest rates, you may find it more beneficial to use a low rate credit card for everyday purchases. Some cards also cancel the interest-free perk on balance transfers if you carry a debt from month-to-month on new purchases.

Rewards Cards

Think carefully before applying for a rewards credit card if you’re trying to manage your debts. While it might seem like you’re being rewarded, you should think about how much you’re paying out in interest and fees.

If you usually carry an outstanding balance on your card, you may find that you’re paying a substantial amount of interest on these types of cards. They may also charge high annual fees.

If you’re certain you want a rewards card, try to find one with low interest and low annual fees, that still reward you for shopping in places you normally shop.

There’s no point choosing a credit card that rewards you for making purchases you would not normally make, like a David Jones credit card if you never step foot in the store. You’ll end up with items you don’t need, or you just won’t get any rewards from the card.

Gold and Platinum Cards

If you’re trying to reduce your debts, then it’s probably not a good idea to get a Gold or Platinum credit card. These prestige cards come with many features and benefits, but you’ll usually have to pay for the privilege with high annual fees.

Think about how much you’ll be paying in interest and annual fees, and only choose this type of card if you’re certain you’re getting a good deal, and that you can genuinely afford it.