Financial Masters get Best Value from their Credit Cards

Which credit cards offer the best value?  There is no one card that is head and shoulders better than the rest, or for everyone.

People who pay off all purchases made during the previous month by the due date and don’t have any cash advances (let’s call them ‘Financial Masters), will be unaffected by the interest rate charged or balance transfer offers.  They would however be more interested in the fees that are payable, the greatest number of interest-free days, and some of the discounts and special offers available to them as a cardholder.

Cardholders who never clear out their credit cards (‘Financial Slaves’) are most heavily impacted by the interest rate, possibly by the cash advance rate and by the amount of initial and ongoing fees.  They may be good prospects for balance transfers provided they can exercise self-control by not using the card for any new purchases on their card during the balance transfer promotion period.  They also need to have the capacity to fully repay the transferred balance before the promotional honeymoon period ends.

Existing cardholders who never fully repay their credit card balance represent a prime target for the switching or churning marketing strategies.  Those strategies include low rate or zero interest rates on balances transferred to the replacement financiers; no annual fees; low, normal interest rates and rewards programs.

Against this background, it is interesting to find a credit card issuer offering a special low interest rate for existing customers.  That’s exactly what Commonwealth Bank credit cards are dangling before their existing customers. It is a limited time offer of 4.99% per annum for all new purchases made on their new ‘Low Rate’ credit card.  This card represents a ‘best value credit card’ for existing CBA customers who don’t already have a credit card with them.  But if you already have a CBA credit card speak to them about a balance transfer – you might find they are prepared to talk!

The ‘Low Rate’ card offer is also open to new customers of the bank.  A credit card application must be lodged either online or at a branch before 30 June 2009.   Once approved, the special rate applies to all new purchases made over the following nine months then reverts to their low normal interest rate for this card.

The new purchases can have an interest-free period of up to 55 days.  The standard variable rate for purchases on the Low Rate card is currently 11.74% per annum; 19.99% on cash advances.

There is no annual fee for existing CBA customers taking up this offer provided they spend at least $1,000 a year on the card.  An annual fee of $24 applies to new non-Commonwealth Bank customers.

Existing Commonwealth Bank customers can apply for the new ‘Low Rate’ card, online, by navigating to the card of your choice,  clicking on the  ‘Apply Now’ button, and completing the credit card application form.

It’s a jungle out there in credit card land but you can chart a smooth path by rigorously following a few basic rules.  Once you can prove to yourself you can say ‘No’ to impulse buying, work to a budget, and can regularly save – you are then on the path to becoming a ‘Financial Master’.