Credit cards

There are lots of bank-issued credit cards. We looked at higher-interest cards with rewards and lower-interest cards without rewards.

Reward cards are good if you pay the entire balance on time. But if you're just $1 short, you won't get the interest-free period - the bank will charge you interest on the whole of your balance until you pay it off. Remember these cards charge higher rates, too.

Carefree spenders are better off changing to a low-interest card (probably without rewards) and carefully managing your spending and repayment levels until you get your balance under control.

If your debt is large, transfer it to a personal loan (but check fees and interest rates), cut up your credit card, and use an Eftpos or debit card instead (see our "Credit-card repayments" table below).

Guide to the table

Our data taken from consumersaver.org.nz, which is updated weekly (data are at 21 October 2008). Note: Table does not include every bank-issued credit card.

• Interest rateA = charged at the higher rate on cash withdrawals only; this interest rate is charged separately from any interest on outstanding purchases (the lower rate) and does not apply to purchases that are not outstanding.
• Days interest free assume the balance for the previous billing cycle has been paid off in full; the interest-free days are then calculated from the start of the next billing cycle until the due date for payment.
• Annual fee some card issuers waive or reduce the annual fee in the first year.

Guide to the table

Our data taken from www.sorted.org.nz and assumes a balance of $3000.

What about cards that reward repayment?

ANZ has recently launched an Everyday Rewards Visa card that gives you reward points when you reduce your credit card balance and when you pay off interest, monthly fees and cash advances.

This card is a higher-interest one. So carefree spenders should treat it like any other higher-interest card - avoid it! But if you're a recovering carefree spender and you're looking for an incentive to keep you on the straight and narrow, it might be worth considering.