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Six Credit Card New Year’s Resolutions To Kick-Start 2021
Smart Money

Six Credit Card New Year’s Resolutions To Kick-Start 2021

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Having had a few weeks to settle into 2021, you may or may not be keeping up with those new year’s resolutions you made on January 1. But, whether or not your plans – for eating better, drinking less, exercising more, being more mindful – have fallen by the wayside yet, there is still time to make changes within the way you deal with your finances.

Yes, we’re talking credit cards. Whether you use your credit card every day or once in a blue moon, it can be all too easy to simply stop paying attention to it. It does the job, so you use it when you need to use it, and think no more about it. However, this lack of attention can result in you being out of touch with your credit card.

According to a recent survey carried out by Defence Bank, its findings suggest that almost two thirds of credit card holders don’t pay much attention to the interest rate on their card. In fact, one third of survey participants said they didn’t know what the rate on their credit card was. Add that to the fact that one in four said they carry a balance on occasion – and that concept of a ‘set-and-forget’ credit card becomes all the more troublesome.

So, what can you do about it as a credit card holder? You can start making changes. Today! In this post, we’re going to cover six ways you can change the way you interact with your credit card. These ‘new year’s resolutions’ should help you to develop a better relationship with your card – and from there, get more out of it – to then take control of your finances.

Pay down your credit card debt

According to Defence Bank’s survey findings, around one in five cardholders find it hard to pay their credit card balance after the Christmas period. Which is understandable, really. Christmas is a time of celebration. You go out more, you eat more, you drink more, you buy more stuff. All that adds up – and come January, those bills need to be paid.

If your credit card balance has been creeping up over the past few months, this is the time to pay it down. If you don’t deal with it now, it’s only going to become more of a problem as the months roll on, and interest starts to stack up.

Luckily, there are a few ways you can deal with credit card debt. Which one you choose will likely depend on how much you owe, and the funds you have available to pay it down.

Pay if off in one

If your credit card balance isn’t too eye-watering, and you know you could clear it this month as long as you tighten your belt elsewhere, just bite the bullet and pay it all off now. Doing this should allow you to avoid paying interest, while also giving you peace of mind that your balance is now clear.

Make a repayment plan

If you know you can’t pay off your balance before it’s due, you could choose to spread the repayments by making your own repayment plan. Knowing how much you have to pay off overall and how much you can pay back each month, you can work on clearing your balance over the next few months. Note, you will likely have to cover accrued interest as you do this.

Opt for a balance transfer

If after taking stock of your situation, you know you’ll need longer to pay off your debt, you may choose to apply for a balance transfer card. With the right balance transfer offer, you could pay zero interest on your balance as you work on clearing your debt.

What can you expect from a balance transfer offer right now? Here are some of the most appealing balance transfer offers currently available on

Low Rate Cards

Each of these cards have a low ongoing purchase rate, making them a great choice for cardholders looking for a low cost card with both a low rate and a low annual fee.

The St.George Vertigo Credit Card is offering 0% p.a. on balance transfers for 24 months.

  • No annual fee for the first year, then $55 per year ongoing.
  • No balance transfer fee.
  • Low purchase rate of 13.99% p.a.
  • Reverts to cash advance rate of 21.49% p.a.

The Westpac Low Rate Credit Card is offering 0% p.a. on balance transfers for 24 months.

  • Ongoing annual fee of $59.
  • 1% balance transfer fee.
  • Low purchase rate of 13.74% p.a.
  • Reverts to cash advance rate of 21.49% p.a.

The ANZ Low Rate Credit Card is offering 0% p.a. on balance transfers for 25 months.

  • No annual fee for the first year, then $58 per year ongoing.
  • 1.5% balance transfer fee.
  • Low purchase rate of 12.49% p.a.
  • Reverts to cash advance rate of 20.24% p.a.


Premium & Rewards Cards

Alternatively, if you know you can pay down your transferred balance as you spend on your new card, you may opt for a premium card with perks or a rewards card.

The HSBC Platinum Credit Card is offering 0% p.a. on balance transfers for 26 months.

  • No annual fee for the first year, then $129 per year ongoing.
  • 1% balance transfer fee.
  • Reverts to cash advance rate of 21.99% p.a.
  • Extras such as complimentary insurance covers and two lounge passes per year.

The Virgin Australia Velocity Flyer Card is offering 0% p.a. on balance transfers for 26 months.

  • $64 annual fee for the first year, then $129 per year ongoing.
  • No balance transfer fee.
  • Reverts to cash advance rate of 20.99% p.a.
  • Extras such as $129 Virgin Australia gift voucher each year and Velocity Points earn.

Note: All credit card info correct at time of writing.

To give you an idea of how using a balance transfer offer such as this might work for you, let’s look at this example.

After spending too much over the Christmas period, David has a credit card balance of $5,000 that he needs to pay off.

Let’s say he pays off $248 per month to clear that debt in two years. In that time, he would pay back $955 in interest, on top of the $5,000 he owed.

Alternatively, with a 0% p.a. balance transfer offered over 24 months, he could pay off $209 per month, to clear his debt within the same period, while paying no interest at all.


Take control of your spending

You may have already decided to spend less and save more this year. The trouble is, unless you create specific goals – and put real effort into reaching them – you may lose momentum after a few months. While there are many ways you can take control of your spending, here are some things you could try to make the journey easier.

Track your spending

Start by tracking your spending for about a month. This should give you a good idea of how much you are spending. Be sure to take into account quarterly and annual expenses as well, such as car insurance premiums and utility bills. There are lots of apps you can use that can make tracking spending easier.

Create a budget

Once you know how much you are spending and where, you can work out where you might need to cut back. When you create a budget, try not to be too severe. Budgets that strictly limit spending don’t tend to work long term, as they can make you feel so restricted that you splurge. A bit like a diet.

TIP: Consider trying a 50-30-20 budget. With this budget, you spend 50% on needs, 30% on wants, and you save the remaining 20%.


Set yourself a goal

Be specific about what goals you want to achieve. Instead of simply saying you want to save money, set a goal of say, $3,000 by August. It can also help to have a reason for saving – as that will make the goal something you actively want to reach for. Make the goal achievable, and work out what you will need to do to achieve your goal within the given timeframe.

TIP: Some banks allow you to rename individual accounts, so you can have an account for each goal. This is also referred to as ‘bucketing’. You may have an account for your holiday fund, or an account for a new car. With the account named and kept separate from your everyday account, you can enjoy watching it grow – and you may be less inclined to take money from it.


Monitor your progress

Actively making change means keeping a close eye on how you are progressing. Be sure to keep checking back, tracking your spending, and making sure you are still working towards the goals you set for yourself. If you are not making the progress you would like, take a step back to see what may be getting in the way. From there you can make adjustments as needed.

TIP: Have ‘no spend’ days. With a tap here and a tap there, it’s all too easy to spend money without really thinking about it. Try having a ‘no spend’ day now and then, where you don’t spend any money. To make this easier, you could set a spending limit on your card or only use cash that day. Parting with cash can seem more ‘real’ than tapping a card, and can make you more mindful in your spending.


Simplify your credit accounts

Of those participants who took part in the Defence Bank survey, one in four said they expected to use their credit card more in 2021. If you think credit will play a larger role in your life this year, you need to know where you stand with it.

Back in the day, we used to have maybe one credit card and a debit card. That’s it. Today, you may have a couple of credit cards on the go, a PayPal account for buying stuff online, and any number of buy now pay later (BNPL) services that you’re signed up for. If you’re super organised, keeping on top of all that spending will be easy. For all of us other mere mortals, it could be more tricky.

As you work on controlling your spending, you may want to consider streamlining your credit accounts to make it easier to keep on top of them all. This may mean getting rid of credit cards that no longer work for you, and only using one card and one BNPL service. The credit accounts you choose to keep should be easy to monitor, manage and pay off.

TIP: While you’re in the mood for streamlining, why not streamline some of your other services. How many streaming services do you have, for example? And how many do you actually use? Cancel unnecessary services and see where else you could save.

This could extend to you getting a better deal on your mobile phone, internet and electricity provider, and even refinancing your home loan, if that would work in your favour.


Ditch cards that don’t work for you

Time to take a closer look at the credit cards in your wallet.

With all the changes we’ve seen over the past year, many of us are living very different lives than we were at the start of 2020. We may be working from home and spending less because we’re not out and about as much. We may be travelling less – especially overseas. We may have changed jobs, and are now earning less and spending less as a result.

With these changes in spending habits, it may be the case that the credit cards you held prior to COVID no longer work for you now. So, what should you look for as you assess your cards?

Interest: How much does your credit card charge in interest? If you always pay your balance in full each month, the rate on your credit card won’t matter too much. But, if you carry a balance, you need to know how much you are being charged in interest.

If you find you are carrying a balance, either change your habits to make sure you always clear your balance each month, or ditch the high interest cards and check out some low rate cards instead. You can find some with rates as low as 8% p.a.

Annual Fee: How much are you paying in annual fees on your card? Is it worth it for what you’re getting in return? If you’re no longer getting value on your card – either in the form of rewards or useable perks – you may want to switch to a more basic card with a lower annual fee.

Want to pay no annual fees at all? Check out the range of no annual fee cards on offer. Bear in mind that some no annual fee cards come with a higher purchase rate, so you will have to pay off your balance each month to avoid interest stacking up.

Rewards: If your spend is down – either as a result of you having less cash available to spend, or the fact that your spending habits have changed – you now won’t be earning as much in rewards. As rewards cards tend to have higher annual fees, your lower earn may mean you are paying out more to keep the card than you are getting in return.

If you still want to earn rewards, but want to switch cards to get better value from your spend, take a look at the range of rewards cards currently on offer. You may also be able to pick up a nice bonus points intro offer as well.

Frequent Flyer: 2020 was a tough year for the travel industry. With international travel expected to remain off the table until the end of the year, 2021 may be just as tough. If you have a frequent flyer card, you may want to assess your potential for earning points and work out if the card is worth keeping.

To see how your card fares within the market, compare it to what’s on offer within this range of frequent flyer cards.

Perks: For the most part, credit card perks centre around travel. But, if you’re not travelling, making use of those perks could be tricky. Consider contacting your card provider to find out if you can push the deadlines on using your perks – or, if you’re simply not able to use them, you might want to cancel those cards to avoid paying their annual fees.

A basic card such as a no annual fee card or low rate card could be a worthy option until travel opens up again.

TIP: Got a big purchase coming up? Once you’ve cancelled the cards you no longer need, you could think about applying for a card that will benefit that purchase. That could mean applying for a card with a bonus points offer, or perhaps save you interest with a 0% purchase offer.

Stop paying too much

When you have a credit card, you want to make it work in your favour, not your card provider’s. How so? Stop paying out on your credit card when you don’t need to! When you break it down, a credit card is simply a tool – but it doesn’t have to be an expensive one. In fact, you don’t need to pay out anything at all if you choose the right card, avoid fees, and pay it off each month.

Here are some ways you can keep the costs associated with keeping a credit card at zero.

Choose a card with no annual fee

While most cards with no annual fee are basic in nature, there are some that offer a few frills.

  • With the Citi Simplicity Credit Card, you will pay no annual fee, while benefitting from extras such as a range of complimentary insurance covers and a free bottle of wine when you dine at participating restaurants within the Citibank Dining Program.
  • With the Latitude 28° Global Platinum Mastercard, you will pay no annual fee and no currency conversion fees. This could work well if you regularly shop online at overseas merchants. Other perks include Flight Delay Pass and access to free global Wi-Fi at more than 1 million hotspots.
  • American Express offers a selection of cards with no annual fee that also earn rewards. These include the American Express Velocity Escape Credit Card (earning Velocity Points), the Qantas American Express Discovery Credit Card (earning Qantas Points), and the American Express Essential Credit Card (earning Membership Rewards points).
  • With the HSBC Premier Card, you will pay no annual fee as you earn points on the HSBC Rewards program. Domestic and international travel insurance are also on offer.
  • With the Bankwest Zero Platinum Card, you will pay no annual fee, while benefitting from extras such as complimentary travel insurance and no currency conversion fees.

Avoid unnecessary fees

While some credit cards keep fees to a minimum, others are riddled with them. Try to avoid paying unnecessary fees on your credit card whenever possible. This could mean tracking your spending to avoid going over your credit limit, making sure you have funds available to avoid dishonour fees, and always paying your repayments on time to avoid late fees.

TIP: Avoid cash advances at all times. This includes using your card to withdraw money at the ATM, paying for lotto tickets, using your card for gambling, and other similar transactions. When you use your card in this way, you may pay a cash advance fee, and the transaction will attract your card’s – typically very high – cash advance rate from day one.

Always pay your closing balance in full

Yes, you can choose to only pay the minimum on your credit card, but it’s not recommended. Why exactly?

  • You will pay interest on your carried over balance. If you don’t pay your closing balance in full by the due date, the balance remaining on your account will accrue interest at your card’s standard rate. Purchase rates can push 22% p.a. on some cards, which could mean interest stacks up pretty quickly indeed.
  • You will pay interest on all transactions going forward. You can only benefit from your card’s interest free days when you pay your closing balance by the due date the previous month. If you don’t, each transaction you make will start accruing interest from the day you make it. This will only add to the total you have to pay off.
  • You will find it harder to pay off your balance next month. If you find it hard to pay off your balance this month, it’s going to be even harder next month when you have an even larger amount to pay down. Only pay the minimum a couple of months in a row, and you could find yourself in some serious trouble.

Make an effort to clear your balance each month. Not only will doing this make it easier to keep on top of your credit card, it will also allow you to keep your interest costs at zero as you take advantage of your card’s interest free days.


Improve your credit score

Don’t know what your credit score is? Now is the time to find out. You can request a copy of your credit score direct from each of Australia’s three main credit reporting agencies, Experian, Equifax and Illion, or you can go through a third party provider.

Once you know where you stand with your credit, you can work on improving it. Being smart with your credit card can help with this process. For example, only applying for credit cards you know you will get approved for is a start, while always making your repayments on time will help boost your credit score over the long term.

As you use your credit card to improve your credit score, you should find it easier to get approved for other types of credit when you apply. As an example, with an excellent credit score, you should find it easier to get approved for car loans, personal loans and home loans as long as you meet the lender’s eligibility criteria.

For more tips on how to improve your credit score – and be generally savvy with your credit card – check out our sister site Credit Card EDU, where you can find a heap of free, easy-to-understand online courses that will expand your credit card know-how.

Disclaimer: The information contained within this post is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.

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. Some popular offers on our site right now include the ANZ Low Rate. This special offer has no annual fee first year, a low purchase rate and long 0% balance transfer. Have a look also at the huge 0% for 30 months balance transfer from Citi with no balance transfer fees.

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