In an economy where most people are tightening their belts and searching for ways to reduce debt, ways to save money and cut back the amount they spend is always welcomes. The GEM Visa credit card understands this and offers plenty of ways for anyone to save money, reduce interest costs, and even protect the money you’ve already spent.

How the GEM Visa Credit Card Can Save You Money

Six Months Interest Free Purchases

The vast majority of interest free offers available on the market only last for a few short months when your account is still new. Once that introductory time ends, you’re left paying a much higher interest rate.

However, the GEM Visa credit card allows you to benefit from paying no interest on the purchases over $250 you make using your card for six months. This means that every time you spend more than $250 on an item, you won’t pay any interest on that purchase for six months.

This offers you an excellent way to pay those larger bills or bigger items you wanted to buy now and spend six months repaying them without incurring interest charges. The interest free offer is available at more than 10,000 participating stores across Australia, so you’re sure to benefit in many ways.

For example: you might decide to pay your healthcare bill right now using your GEM credit card. Your account won’t be charged any interest from the day you paid your bill, but you have six months to repay what you spent before the interest free special expires.

55 Days Interest Free

Not every purchase you make on your credit card will be over $250. In fact, if you have an emergency bill you need to pay that’s only $150, it won’t qualify for the six months interest free offer.

However, your GEM Visa credit card allows you the benefit of up to 55 days interest free on purchases below a $250 value. This means you will need to repay the amount you spent before the due date listed on your statement in order to avoid paying any interest at all.

Full repayment before the due date only relates to those little amounts you spend through the month. Your larger purchases over a value of $250 are still benefiting from the six months free interest deal, so only the minimum monthly payment needs to be made on these amounts.

Longer Term Interest Free Deals

GEM has made it even easier to save money and pay no interest by partnering with stores all over Australia. For much larger purchases, some of those stores may be happy to extend your interest free period to 1 year, or even 2 years in some cases.

This allows you to purchase that new TV or replace that broken-down old fridge and know that you won’t be charged interest on the amount you spend. You can find out which stores will offer even longer free interest deals by using your GEM Visa credit card to pay for larger purchases here; http://www.gemvisa.com.au/find-a-store/index.html

Shopper’s Protection Insurance

The GEM Visa credit card offers cardholders an added level of safety and security with Shopper’s Protection Insurance. This is a completely optional policy that gives you protection for the things you purchase.

There are two ways your purchases are protected:
Product Protection: If you purchase a new computer for $1,000 and you pay for it using your GEM credit card, your computer is protected. If it’s ever stolen or damaged, simply inform the underwriters for GEM’s Shopper’s Protection Insurance and let them know what happened. Fill in the simple claim form and send it on to let them know how much you spent on that item. When your claim is approved, the amount you originally spent will be deposited right back onto your GEM Visa card for you to compensate for that product.
Price Protection: There’s nothing worse than spending your hard-earned money on a big-ticket item, only to find it on sale at another store a couple of months later for a much lower price. If this ever happens to you, GEM Visa can protect you against spending too much. If you purchase a new TV for $1,000 and you see the exact same model and make of TV in another store a couple of months later for sale at just $600, you could get the $400 difference paid directly back into your Visa credit card account. Simply fill in the claim form and let them know about the price discrepancy. When your claim is approved, you’ll have the difference back in your pocket, so you’ll have saved money on that purchase.

Keeping Track of Repayments

With your GEM Visa credit card, your minimum monthly payment on your interest free purchases is usually 3% of the amount you owe. There is no interest component in this amount. You’re simply reducing your balance every time you make a payment.

However, if you use your Gem Visa card to pay for purchases that are less than $250, these will be charged differently. In order to pay no interest on these lower amounts, you need to remember to keep track of your statement and be sure you pay these smaller amounts off at the end of the month.

Your statement will be clearly itemised, showing each balance amount separately. You’ll clearly see the interest free components and how long they have left until they expire. You’ll also see the regular purchase amounts listed there, so you’ll know which portions you need to repay and when.

The idea of having separate items charged in different ways can be a little confusing for some people. This is why it’s highly recommended to check your statement regularly to ensure you’re not overlooking something that may need to be covered.

Here’s an example of how it works:
Balance for small purchases less than $250: $155
Balance for 6 month interest free purchase over $250: $300 (12 weeks remaining)
Balance for special 12 month interest free purchase over $250: $900 (26 weeks remaining)
Your statement will show you which amounts only need to have the bare minimum payments made and which balances need to be repaid entirely. So in this example, you will need to repay $155 in full in order to receive your 55 day interest free benefit.
However, you will only need to make a payment of approximately $36 for the balances still under the interest free deal. ($1,200 x 3% = $36).
Be sure to check your statement every month and make sure you understand which balance amounts need to be repaid at what time. This will help you to avoid ever paying any interest on your credit card purchases ever again.

Where Can You Use Your GEM Visa Credit Card?

Cash Withdrawals from a Gem Credit Card

So how do you go about finding those 0% interest credit cards you keep hearing everyone talk about?

Applying For A 0% Interest Credit Card

When you apply for a credit card, you want an answer fast. Many card issuers make it simple for you to apply online and get an answer quickly. Some of them boast of a response in only 60 seconds! How’s that for fast service?

Considerations When Shopping For A Credit Card

When shopping for a credit card, there are a few things you’ll want to compare among cards:

• the annual fee
• the interest rate on purchases
• the interest rate on balance transfers; 0% is a great find if the time period to repay is long enough
• the interest rate on cash advances

A Transfer Rate To Help People In Debt

Because of rising prices on everything from fuel, to food, to utilities, and everything else we need for daily living, times have been hard for many people. Income levels pretty much remain the same, and some poor unfortunates have even lost their jobs. These hard times have left many with nowhere to turn but their credit cards, which in turn have amassed a lot of debt.

Finding a 0% balance transfer rate on a credit card might be the solution to get you out of debt. It is important to note that the transfer rate is only good for a certain amount of time, and it varies among credit cards.

Another important consideration is what the rate will be after the promo time expires; this is known as the revert rate, because it “reverts” to another rate after the 0% promotional period.

0% Transfer Rate Considerations

You need to know what exactly is covered under the 0% rate. Some credit card issuers will allow purchases to be covered in addition to balance transfers, but not all of them do. The important thing is to get out of debt, so maybe new purchases are not something you should even be considering with a new card.

Transfer rates have specified time periods. We wish they lasted forever, but they do not. Some are for 6 months, some last for 9, other may last 12, and some are as long as 18 months. You want to look for the best rate you can find for the amount of time it will take you to pay down the balance.

When the 0% rate period ends, a revert interest rate will begin for the remaining time you own the card. You need to know what this new rate will be so you can plan your purchases. If it is a high rate, you’ll want to only purchase what you can pay each month in full to avoid excessive interest rate charges.

Most credit card issuers charge a fee for balance transfers, and it is generally a percentage rate of the transfer amount. There are cards, however, that charge a flat rate transfer fee. You want to be sure the fee will be less than what it would cost you to leave the balance on the card rather than transfer. A balance transfer only works if it makes sense to do so.

If you’ve ever seen a credit card that offers 0% interest on new purchases, DON’T go signing up for it without reading the fine print. They sound like an excellent deal on first glance, but there might be hidden terms and conditions that can make them a lot less appealing. In order to decide if the card that you’ve been offered is really as good as it sounds, you need to keep in mind that many of the 0% interest rate cards will have terms and conditions that you need to watch out for.

How Do These Cards Work?

You’ll find that most of these 0% purchase rate cards apply the 0% rate for a certain amount of time. In most cases, this time frame is anywhere between three and six months, though you can find cards that will apply the zero interest rate for 12 months. You should always pay attention to how long these low rates will apply to your card. Once the time is up, your interest rate will revert to your usual APR.

How To Budget With These Cards?

When you’ve obtained your 0% interest credit card, then you want to be sure that you’ll be able to pay off your balance before the interest rate period ends.If you don’t do so, you’ll find that you’re hit with a high APR and any fees and charges which apply to your card at the time. This can very easily negate the benefits of your 0% rate that you’ve enjoyed up until this point.

This is why you need to budget correctly to ensure that you can pay off your entire balance before the rate jumps up to the usual APR.

Get Your Spending Out Of The Way

If you’ve made the decision to apply for the card and were approved, make any major purchases that you planned to make immediately. If you had a new big screen TV on your list – get it. This will allow you to enjoy the full interest free period and your major purchases. This is better for you than deciding to make a major purchase within a few weeks of your cut off date and will give you a much longer time to pay off your large purchases.

Exclusions For The Card

With these 0% purchase rate cards, you might find that there are exclusions that will apply. You can expect these exclusions to always include cash advances or withdrawals. This would be withdrawals from ATMs, purchasing casino chips, and paying certain bills. It is imperative that you read and understand the fine prints on your terms and conditions agreement so that you know which transactions will and will not be covered by your 0% rate.

Fees Included

If you’re planning to get one of these credit cards, be sure that you check your fine prints for fees that you might be charged. Is there an annual fee? What is it? Are there other fees that you will be charged. You need to know that the fees don’t out weight the benefit of the 0% interest rate.

Nowadays, the trend for the most important Australian banks is to raise the interest rate for the financial products they offer in order to match the limits established by the Reserve Bank. Even though these increases fit with the current situation of the economy, they will undoubtedly make you pay more every time and especially if you are already struggling with some serious financial problems, meeting the minimum payments will be an almost impossible task to achieve.

What Should You Do?

If you encounter some problems when it comes to paying for the debt of your credit card due to the high interest rates applied to your account, you should most definitely start to seek for an alternative product, since you have all chances to find something that comes with a lower rate, mainly due to the great competition on the market nowadays.

Another situation when you would want to do that is when you do not pay enough attention to paying your credit card debt. In a case like this one, the smallest increase in the interest rate will also affect you and the time it takes for you to pay off for your balance in full.

What Product to Choose?

First of all, you should know that a low interest rate is usually estimated at a sum that is 9 % bigger than what the Australian Reserve Bank has established. Because of this, you should never expect to find something really spectacular on the market, because the financial institutions are also in need of profit and will always look for solutions to increase its level.

In most of the situations, the no fee credit cards come with the highest interest rate, because the lenders have to compensate the fact that you do not have to pay maintenance of service rate, and this is usually be done by constant increases in the interest rate. So you should be really careful with this type of product and avoid applying for it if you do not want to pay a huge interest rate.

How to Know When You Pay Too Much?

This can be another important questions you should always ask yourself if you want to make your financial situation a better one. Considering the latest increases in the interest rates, most of the people are wasting some serious amounts on this kind of payments.

In order to be sure that the financial institution you collaborate with does not attempt to trick you is to constantly monitor the interest rate applied to your account and detect any chances. If you see constant increases, you should most definitely look for another product because you will end up having to pay more than expected.

There are a great number of aspects that you should be aware of when it comes to comparing the offers you see advertised in different places. First of all, with a low interest rate, you will be able to save some serious money and use it for some other important goals for the near future. However, you should also consider the annual service fee, administration fee, transaction, and any other amount you will have to pay when using your credit card.

Moreover, there are also some programs that come with a great number of exclusive rewards which you will enjoy using. Therefore, you should also take this into consideration because sometimes, it is cheaper to apply for such a financial product than for a regular one. Just make sure that every product you sign for is compatible with your budget and your financial needs.

If you already own a credit card, though, you might want to try a balance transfer to an account that comes with a lower rate. This procedure is often a very advantageous one and in order to get the best out of it, you should search for a low balance transfer rate credit card. Luckily, there are a great number of such products and you will always find something for you.

Low Rate MasterCard from ANZ

One of the most important programs you will need to know about comes from ANZ and offers an interest rate of only 13.49%. In addition to this, there will always be an annual fee of only 2.9% for a period of 18 months on every balance transfer you make and as a consequence, you will have the chance to save some serious money.

Lite MasterCard from Bankwest

Bankwest also has its attractive promotional offers. For example, with this product, you will benefit from an introductory interest rate of 5.99% for a promotional period of 12 months. After the first year of your contract has passed, you will have to start paying 10.75%. Moreover, there will also be a $59 annual fee and, on top of all, a period of 55 interest free days, during which you will be able to make purchases and give back exactly what you spend.

Vertigo Program from St.George

Finally, another important solution for you might be the program known under the name of Vertigo, distributed by St.George. What makes this program so special is the 2.99% p.a. rate for a promotional period of 6 months for every balance transfer. This can help you in a great number of situations and you should really consider it.

]]> http://www.bestcreditcards.com.au/which-low-interest-credit-card-offers-the-best-deal.html/feed 0 http://www.bestcreditcards.com.au/credit-card-interest-rates-a-brief-background.html http://www.bestcreditcards.com.au/credit-card-interest-rates-a-brief-background.html#comments Thu, 17 Mar 2011 05:56:30 +0000 admin http://www.bestcreditcards.com.au/?p=3016 Types of Interest

First of all, you should know that there are numerous way in which a financial institution can charge you with a certain level of interest applied to your account. For example, whenever you make a purchase, the amount used for it will automatically come with a purchase rate.

This is also one of the main reasons why most of the customers are constantly seeking for new financial products that come with lower interest rates. Nobody wants to pay some serious money for a couple of services they do not even use. What is more, in most of the situations, it is more advantageous for you to perform a balance transfer to a new account since the rate for this is usually lower than the purchase rate established by the lenders.

On the other hand, you will also be charged for withdrawing any amount for your account with a rate that is much higher than the one that applies to purchases. Because of this, you might end up paying more than you could ever imagine every time you wish to access your funds through an ATM.

Finally, there is also the penalty interest rate, which will be applied to your account whenever you fail to keep up with a certain payment or exceed the limit of your credit. This sum is also a significant one and you will most definitely want to do anything possible to avoid it. It is for your own good and only in this way will you improve your financial situation in the end.

How to Reduce the Interest

Once you have signed a contract for a certain financial product, there is nothing to do about it, except for paying for everything on time. However, when the period of time for your obligations expire, you might want to consider looking for an alternative financial product. Luckily, the market offers numerous solutions nowadays and whenever you feel like you are paying too much for interest, you will always find something compatible with your financial situation.

However, when it comes to searching for the ideal product, you should be really careful not to get tricked, since some of the offers are just traps set by the financial institutions to attract customers. Furthermore, it is always best to get in touch with representatives of your credit company first and ask for a better solution. In most of the situations, they will want to keep you as a customer and provide you with something better, such as one of the promotional deals they are distributing.

All in all, make sure you read the information presented to you in this article carefully because it will come in handy in a great number of situations.

The Drawbacks

Do you know what kind of interest rates you are being subjected to on your credit cards? How high are they? Can you even tell by looking over your monthly statement? There are probably several different rates printed there on your statement. This is because there is not just one interest rate that can be charged to the account, and companies have to mention all of them. These include your purchase interest rate, your cash advance interest rate and your balance transfer rate, if applicable.

The lowest rate you are probably going to see is the transfer interest rate and it is also going to more than likely not be a long-term rate, but a promotional rate instead. This is going to be the rate offered to you when you first open your account, and it will only be valid for a specified time. What is equally important as that introductory rate is what the rate is going to be once that introductory rate expires. Your purchase rate applies to purchases that you make, and the cash advance rates are what is charged for your cash withdrawals and cash back transactions.

How to Lower Your Credit Card Interest Rates

Fortunately, there are some things you can do that really do help to reduce those rates. Following is some information explaining what to do and how to do it:

• Stop using the credit card! Although this is probably the most obvious way to stay away from the clutches of high interest, it is probably the most difficult to accomplish, too. If you are able to pay off your card every month and have no outstanding balance, you are not going to incur interest charges, no matter how high your rates are. Only use the card for dire emergencies.
• Pay more than your minimum monthly payment amount. This is quite often overlooked, but it is very effective when it comes to trying to get your balance down. When your balance goes down, the amount of interest that you are charged also goes down.
• Get a credit card with a low transfer balance interest rate. If your existing credit card has a high rate, or it just doesn’t have a low rate, you might want to look into getting one that offers very low interest on balances that you transfer to that card. This is only going to be available to you for a certain amount of time after you open your account, so be sure that you are aware of how much you can transfer and when that promotional rate expires. Concerning your overall debt, this may very well save you hundreds or even thousands in interest, and you often can transfer more than one balance over to that lower interest card.

You can also help your interest rate dilemma by always making sure that you compare all the different deals that are available to see if you can start out with a card that is going to give you a nice low rate that stays low throughout the life of the account. This way you will save thousands of dollars over the years as you build your credit and earn a great credit customer status.

It is almost always more difficult than expected to pay off credit card debt and it usually takes much longer than people think it will too. This is especially true when you have more than one credit card. But when the time comes that you have so many monthly payments and several different interest rates, it may be time to look for a card that can offer you a much lower interest rate to which you can transfer balances from your higher rate cards.

When you are able to transfer balances from high interest rate cards to a low interest rate card, you can save hundreds or even thousands of dollars over the life of the debt in interest charges. Performing this type of transfer may be the best way to cut your interest rates and charges and the best way to do it quickly and easily. If you have more than one credit card, you often are able to transfer more than one of them onto the new card, as long as you do not go over the balance of the new one.

Reducing interest is the best way to increase the amount of money out of each payment you make that is going towards your actual debt (principal) as opposed to how much is going towards interest charges. The results are quickly cumulative, because instead of just paying on interest every month, you will be able to pay down your actual balance, which keeps reducing that interest rate.

What Are Low Interest Credit Cards?

There are two types of low interest credit cards. One type includes those that offer a special introductory low rate for a specific amount of time before the rate goes up to a standard rate. The other type includes those that offer a long-term low rate on purchases, transfers, and cash advances.

For the most part, those that offer introductory low interest rates are excellent for transfers, and those transfer rates are almost always very low. This is to attract new customers, of course. The credit cards that offer long-term interest rates are usually the ones without all kinds of other perks like reward programs.  Also, cards with long-term rates often have a higher annual fee than the ones that offer low introductory rates.

Which Type of Low Interest Credit Card is Right for You?

Since there are many different credit cards that offer so many different rates, terms and conditions, perks, bonuses and discounts, you are going to have to analyse each possibility carefully to find the ones that are going to suit your needs and your finances best. This includes finding the one that is going to help you lower your interest rates and fees quickly and effectively.

If you think that you will be able to pay off the debt that you put onto an introductory low rate card, this is probably a good option for you. Once the introductory period expires and the rate goes up, you will not have a balance on the account that will be subjected to any interest charges anyway.

A word of caution though about introductory transfer rates that many people fail to understand: They usually do not apply to new purchases. they are reserved for charges that you transfer, not charges that come from purchasing. Be sure to find out what the rate is for purchases during the introductory period.

If you do not think you will be able to pay the debt off during the introductory period, you may want to go with a long-term low interest card. The lack of rewards and perks probably is not going to be an issue as long as you use the credit card like a loan with the intent of paying off your debt.

Though these can be a great boon to your money issues, they are also potentially dangerous.

Before you go in search of a zero interest credit card, let’s briefly examine the potential pros and cons of using one.

The Pros

With any credit card, your balance is subject to interest every month. Most of the time, the interest is pretty variable with your credit history and the type of card you have, however one truth remains, you’re always paying extra money so long as you have a balance. The first and most important pro for a zero interest credit card is that there is precisely that- no interest.

Zero interest means that you can carry a balance on your credit card and not be charged anything additional to that balance. In effect, you only pay for what you’ve purchased. This can be very appealing since any other credit card seems, in comparison, like you’re being asked to pay for essentially, nothing.

Having no interest on a credit card can also be a great way to work toward paying off debt. If possible, transferring all outstanding debt with interest bearing credit cards to a zero interest alternative can be an efficient way to get ahead on your debt. Doing this can save a lot of money- instead of paying interest on a large sum of money, the principal can be paid down rather than mostly paying the accruing interest.

The Cons

Granted, the concept of a zero interest credit card is very appealing and they can help you get out of a bad situation, however, there are some negatives associated with them as well. First of all, most of the time, the zero interest period is finite, meaning, it doesn’t last forever.

Companies will offer you 0% for a few months, maybe a year, then after that period is up, often times the interest rate is much higher than a standard interest credit card. There is also the possibility of interest compounding during the zero interest period. In short, if the balance is not zero by the time the zero interest period has concluded, you will be charged interest equal to if you had held that balance for the entire period at a high interest rate. This can be very dangerous, especially if this card is being used to make large purchases or transfer balances from a number of other cards.

One guarantee is that zero interest will not last forever and these offers should be used as grace period to either get ahead on debt or make a large purchase that would otherwise accrue much interest as you pay it off regularly. A healthy suggestion for using these types of credit cards and offers is to use them to your advantage but not to hang on to them for very long. Always be aware of your interest rate and expiration date on promotions like zero percent.

In the end, zero percent interest cards are a great tool in your debt management toolbox but should not be relied upon to solve your debt crisis. Know your rates, understand the limitations and use it wisely. When kept under control, zero interest cards can really help you get back on track.