Am planning to use credit card. Got a complementary credit card from Nab (Nab Platinum ) with no annual fees when I got my home loan. what are the advantages of using credit card over debit? Which card give more rewards/points ? Once a year do overseas trip
First Time to Use Credit Card
georgev on 02/02/2023 - 15:43
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Or a couple of first class round the world tickets (what my balance gets me).
Or a couple of Iphone 14 pro'sAll
For
Free.But you need to churn and burn cards for this. Day to day spending will get you nowhere.
What’s your balance and what points are they out of curiosity?
You need 455k Qantas points for each RTW first class ticket
Not quite free though, still need to pay taxes, and for "best" value actually be willing to have paid the cash cost of such an airfare (unlikely for most).
I still churn but am OK with economy redemptions and occasional business.
(not the one you asking but I peaked at 1.6m Qantas points and 800k Virgin Velocity, only about 850k Qantas remaining now though)
@Shadowsfury: Thanks! Very insightful.
Impressive point balances, do you have an idea of how long it took you to accrue that many points?
I think you have some inflated expectations of a rewards credit card. The way people get enough points for overseas flights is by churning credit cards to take advantage of generous sign-on bonus offers. They are useful for certain places which don't accept debit (some hotels/hire cars), and good for managing monthly spend. Apart from that, you probably wont see many benefits.
Fraud protection is probably the main benefit you will get - you will have the ability to dispute and chargeback unauthorised transactions on a credit card
MasterCard and Visa debit cards also have this feature
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It's handy using a credit card because all your card expenses are in one list and it gives you a running total on how much you owe each month. You should always want to pay it off before carrying a balance to avoid interest, unless it's an emergency and not buying something would hurt more than paying some interest for a month or two (like repairing your car when you have no other money to pay for it, as you need car for work). You should think of your credit card like Afterpay, won't cost you anything if you pay it off each and every month. I think Afterpay is great training for young people because they don' even present paying things off late as an option, it just defaults to paying it off before the end of the next month.
Chargebacks are meant to be easier on a real credit card vs a VISA debit card.
I think Afterpay is great training for young people
Uhh maybe young people who have enough control not to buy anything they want. A quick Google indicates “90% of young people had financial trouble in 2022 and 27% of them used BNPL services.”
I don’t think BNPL is a good training tool at all. Young people should be taught how to balance a budget, how to manage their cashflow, how to grow their wealth etc. that would go way further than giving them access to BNPL and will decrease the chances of them getting into debt, because who enjoys learning things the hard way?
Afterpay gives you four reminders for each purchase, one for each payment. So if you blow $2.00 on a pack of chips and pay with Afterpay then you will get four seperate reminders of that purchase with each 50 cent repayment, that's four more moments of reflection on each purchase. Vs just paying cash for the chips and then forgetting you ever bought it. For better or worse these services are changing how we think about money and shopping. I think overall it's better. The old way of doing things hasn't exactly been great for the underclass either. At least now the underclass can buy good boots that will last years.
Hmm think we’ll have to agree to disagree.
At least now the underclass can buy good boots that will last years.
Lol bit random. As long as they’re well made I guess, my Italian boots have lasted me for more than 10 years.
@Ghost47: Exactly. You could go to Kmart with one week's paycheque and buy the $40 boots that will fall apart in six months. Or you can Afterpay the $320 leather boots which will last 10+ years.
Benefit is you get 55 interest free days, Put your pay directly into the home loan redraw/offset. Pay credit card in full just before due date. And you saved yourself interest being charged on the home loan.
Also I get a 2% discount for paying council rates early, but it is more beneficial to keep the money in the loan for an extra 6+ months than paying early and getting a discount
One thing to ensure is that your spending doesn’t suddenly blow out because you now have access to credit. Any frivolous spending can easily erode interest earned by keeping your own money in the bank.
But then we wouldn't have any bonus points for spending x amount. Someone has to pay for it, banks aren't a charity.
I have no issue with making up the minimum spend to get bonus points. There are offers like the ANZ Velocity card where you get 75,000 points for spending $1500 over 3 months or the Qantas Amex Platinum where you can get 100,000 bonus points (75,000 points after spending $3k in 3 months and then 25,000 points after the first year of keeping the card.) These are hardly high spend amounts; an average of $500 a month for the ANZ card and $1k a month for the AMEX.
What I'm talking about is going from spending an average of $1000 a month to $2500 a month just because you have access to the credit.
First of all, as mentioned the interest earned keeping your money in the bank whilst spending the bank’s money will be your main benefit, as long as you don’t become too loose with your spending.
Secondly, if you want a card with points etc. (not sure if your NAB card gives you points, maybe it does if it’s a Platinum card) you need to decide on a card and apply for it. I don’t know how having a mortgage could affect your application, I would assume it would decrease your chances of being approved because you have a lot of debt… but you’ll still need to try anyway.
Our broker told us when we took the mortgage that our credit card that came with the mortgage attracts interest regardless if you pay it out on time. So we never used it. Not sure if this is same with yours.
Credit cards are great if you pay them in full before the due date, we get enough points for around $600 worth, convert them to gift cards, Christmas gifts sorted.
Thank you, I didn’t know that before. Will ask my broker to confirm
That's…odd? So it's basically a debit card but worse?
Aren't mortgage provided credit cards just a normal card they offer but bundled?
I found it odd as well, but as it just came with the package and I knew we didn't need it I didn't bother to ask.
Fair enough.
But I just want to point out for others reading your post that almost certainly someone was mistaken, and mortgage bundled CCs are just normal CCs.
More like get a free toaster if you pay for delivery.