Credit cards can be a useful money management tool – but only if your card is giving more than it’s taking, says industry super fund-owned bank ME.

Credit cards can be very handy in the right circumstances. They’re more secure than carrying wads of cash. They’re super useful if you’re travelling, and they can provide a source of emergency money if you cop an unexpected bill.

The downside is that credit cards come with costs, and it pays to be sure your card is delivering real value.

Transactors – look for a low annual fee              

If you pay off your credit card in full each month, you’re what the banking industry terms a ‘transactor’. As transactors don’t face interest costs, it’s worth focusing on the annual card fee. This too can be avoided as some credit cards charge zero annual fees.

Revolvers – aim for a low rate

If you owe money on your credit card each month, you fall into the ‘revolver’ camp. As you’re continually paying interest on the balance, it’s important to minimise the cost by looking for a low rate. With some shopping around, it’s possible to pay less than 12% per annum.

Rewards – not so rewarding after all

Reward cards can be especially expensive. Yet ME research found that over half of reward card holders earn rewards worth less than $50 annually. Almost two out of five say their card is costing them money instead of delivering any value.

A low interest rate or a low annual fee card can often be a more rewarding option, providing savings without the need to chase points.

Is a credit card right for you?

No matter what type of credit card you have, if it’s encouraging you to overspend, you should consider if credit cards are for you.

This article is brought to you by ME. For more information, please visit

Members Equity Bank Limited ABN 56 070 887 679 AFSL and Australian Credit Licence 229500.

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