Credit Cards

Reporter: Helen Wellings

4 weeks to Christmas, the credit cards are flexing. This festive season, we're expected to launch into a massive spending spree - $50 billion from now through to January. With consumer credit card debt already at a record high $41 billion, that's a frightening $3,000 each, this Christmas frenzy will more than double it.

But instead of this, we'll show you the best credit cards, many of them with zero interest. Denis Orrock of Infochoice has assessed every card on the market. "There's no excuse to be paying any rate higher than 15% on a credit card in Australia today."

Just in time for Christmas shopping are zero interest credit cards. Last year we had 1 or 2, a month ago 7, today there are 72 credit cards with NO interest charged on purchases for 3 to 6 months. Annual fees are from nothing up to $295. Used wisely, they can suit many people and you could transfer debt from another credit card onto the zero interest one.

"If somebody thinks that Christmas is going to cost them $1000 - $1500 whatever it might be, but won't be able to pay that off in January they could look to use these zero per cent cards" says Denis.

Up to 70% of consumers don't pay off the balance on their credit card each month. The big temptation with these zero percent cards is that you'll spend more than you should and then... the catch. Once the 3 to 6 months introductory period is over, the zero interest can jump up to 20%, 4.5% more than the average normal credit card rate.

Only 2 of the 72 zero rate cards revert to a rate below 18% - ANZ Low Rate MasterCard is nearly 13%. BankWest Zero MasterCard, almost 15% - with no annual fee. Belinda-Jane Rafter used to owe $5,000 on her credit card, until buying a house forced her to decrease her limit to $500. But with the Christmas spend-up she may need to increase that limit, and get a better credit card. "After Xmas I expect to be in alot of debt and I expect it will take a long time over the months with min payment to get back on track" says Belinda.

So if you know you won't pay off the zero interest rate card in the free period, there are some cheap alternatives. For habitual spenders, like Belinda, who have an outstanding monthly balance on their credit card, go for a low interest rate card with a low or no annual fee, like St. George Vertigo - nearly 10%, and Suncorp Clear Options Standard at 10 and a quarter %. "People who pay off their cards off in full every month, interest rates are really irrelevant to them, they're looking for things like rewards" says Denis.

If you use you card for everyday purchases such as groceries and petrol, you pay off the balance in full each month, and you want perks like frequent flyer points - consider St George Platinum Visa at 13 and a quarter % and HSBC Amex Gold, nearly 17%.

"If you're serious about your finances you should be looking at credit cards regularly to make sure you're getting the best deal around the place. Ultimately, many of us need to tighten our belts in regards to what we are spending" adds Denis.