Help! I'm a credit card virgin and I need to pay for a trip, what's the best card for me?

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  inherentchoice on 17/10/2009 - 10:03

  Well it never crossed my mind before now that someone would want a credit card with the intention to not pay the first month, though now you raise it I suppose it could be fairly normal. Are you sure that a personal loan isn't cheaper? Perhaps you can get both a personal loan and a credit card and then pay off the card in time that way? Another idea could be to plan ahead and take advantage of one of those promotions where they have 0% interest for 6 months on balance transfers.

  If it's just for booking flights, I'm pretty sure that each of the airlines actually accept payments by bank deposit as well, and it means you can avoid that $2 credit card fee (but you should call them up before you book to confirm how it works). I'm sure a friend or relative would be willing to pay for it with their card if you give them cash upfront? Maybe also have a look at getting one of those Mastercard/Visa Debit cards.

  If you decide you still want a credit card then I believe the Wizard Clear Advantage Mastercard could be the best deal because it has no annual fee and they pay the foreign currency transaction fees for you, but if you're not going to pay it off by the date you should really do a bit of shopping around. Here's the link if you're interested though: http://www.gemoney.com.au/en/credit_cards/index.html

  Personally I got a credit card to save money rather than spend it, and I mean not just save bank transaction fees but you obviously get an interest free period up to 55 days, during which time you can keep your money in your bank account to earn that little extra interest.

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  Shadowsfury on 17/10/2009 - 16:37

  I'd say get a personal loan.

  Interest rate will be much cheaper.

  However be careful with those who try to rip you off. Don't get stuck with dodgy lenders which will lock you into a ridiculously long repayment period.

  Might be best to ask your bank.

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  [Deactivated] on 18/10/2009 - 08:14

  +2

  You indicate two needs here - one as aloan and the second as getting points.

  In a sense the two are exclusive - in the credit card world. The idea for banks with the points are that you pay a high interest rate. The idea for the consumer is NOT to ever use the loan part and avoid the high interest rate.

  As a Virgin, you wont have had the experience of a bad card deal. There are teaser rates with some cards 1% or so for 6 months but these are usually for balance transfers - you need to have money on a card to transfer to a new one. So you could start with one balance, then transfer, BUT as a card Virgin, the reality is you may not qualify for an extra card, so you may get stuck with the higher rate, and its only for 6 months so you will have to pay it off then.

  So if you can pay it off that quickly whats the point. Another way is to try Relative Bank. They know you, they can bankroll you, you can pay them interest equivalent to what they get in an online savings account, they win because unless they are really keen, they don't declare the interest where as they have no option when it's in the bank.

  And take the advice of inherentchoice - get the Wizard card, you can save so much on exchange rates and transaction fees, that will normally eat up as much cash overseas as the interest payments on the borrowings for the trip. AND pay for the trip on the credit card but use Relative Bank to pay it when the account is due. WHY? because your purchase is protected should the airline fail before you fly.

  And some final fatherly advice - if you dont have the money now, this trip wont be any bargain no matter what the fares are like. Trips OS will get cheaper, there are too many airlines needing the bucks.

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  ranma on 19/10/2009 - 04:17

  Thanks for the info, guys! (Wait, I actually really meant to use 'guys' normally there.)

  I've been looking up the stuff you've recommended, and maybe I should elaborate a little more. A friend of mine from France is coming to visit me in Perth this January, and she wants to do a road trip on the east coast, we're looking at flying to Sydney, then Coffs Harbour, then driving up to Airlie beach over 2 weeks. Unfortunately, I am flying home this December for 3 weeks and I have calculated all my earnings/savings to cover the expense of that, while of course paying for rent and bills and what not while I'm gone.. so unfortunately, this sudden trip of hers isn't part of the budget, and there's no way I can pay for all that stuff now, so I need to put it on something.

  Pete, unfortunately I am here on my own and I do not have a 'Relative Bank' I can count on at the moment (It's funny, but honestly it took me about 2 minutes to figure out what this 'Relative Bank' was… I was about to look it up on the internet.) so that's not an option for me. And thank you so much for your advice, but right now the only bargains I am looking for are cheap flights there and back, and also a low interest rate on a card… the trip is really a non-negotiable, she will kill me if I don't go, whatever the price it comes out to be.

  I noticed that Bankwest has a Bankwest Zero Mastercard that has 4.99%p.a. on its first 9 months, so I am guessing this rate is lower than an unsecured personal loan? And no annual fee either, so maybe I can apply for this card, spend thereabouts $1500 on it for the trip in Jan, pay it off by about April, which means I'd have paid hopefully around $25 of interest by that time (that is about the roughest calculation in the world, someone please tell me if I'd done it wrong.) Then I just cancel the card after that and get a nice rewards one or something when I'm ready. What do you think?

  In this specific scenario perhaps a loan isn't the best, but I hadn't fully looked into it, but there are application fees and such, and my housemate has an unsecured loan and he's paying like 13% interest on it, so that's definitely way higher… again, thoughts?

  Thanks again for your input guys, I really appreciate y'all helpin me pop my cherry.

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    [Deactivated] on 19/10/2009 - 22:36

    BankWest sounds reasonable especially since its for local use and for a short term only (vs the Wizard for OS) - and the banks will probably give you a nice rewards card as you have a record of borrowing which they love. Just dont cancel the card until you get the rewards one first. Enjoy the holiday