Your card personality

Personality makes a big difference when it comes to maximising interest free spending, avoiding interest payments and maximising card rewards.

Work out whether you're a carefree or savvy consumer personality and you can get the best credit-card deal to suit your spending patterns.

• Carefree cardholders maintain a constant cycle of debt through regular overspending or episodes of binge spending. Repayment over an extended time period means interest is always being paid. Because the card is never paid off, so-called "free" rewards come at a cost.
• Savvy card users never spend more than they can afford and pay off the card balance in full every month. This ensures they never pay interest. Using credit cards as an alternative to eftpos, cash and cheque payments means the savvy have large numbers of transactions - but no transaction fees. They also have a relatively high monthly spend so rewards schemes may be worthwhile.

Carefree spenders

If you don't pay off your card in full each month you're throwing away money in interest and fees. Minimum payments are designed to benefit the bank – not you. A $4000 debt on a card charging 19.95 percent could cost you $19,400 in interest and annual card fees to repay if you’re only making minimum payments. It’ll take you 60 years to pay off this debt.

Carefree tips

• Switch to a low-rate card if your credit card debt is in the thousands. You probably won't even need to change banks. See Low-rate cards for more details.
• Rewards programmes are a trap if you're in debt on your card. The higher fees and interest rates associated with a card that has a rewards programme will most likely outweigh the dollar value of any rewards.
• Work out a budget. Locate any spare money that you currently don't think you have and put it to work paying off your card debt. (There are local budgeting services that can help you free of charge.)
• Pay in full - partial payment means you're paying interest. You’re also likely to be charged interest on any new purchases you put on your card and on any fees owing. On top of this, some banks will even charge interest on interest when you don’t pay off your monthly balance.
• Pay by direct debit. Clear your whole debt in full every month by direct debit and you don't have to remember a thing. Set it up with your bank.

Savvy spenders

If you’re a careful spender and always pay off your bill each month, interest rates won't matter and you have a wide choice of cards and rewards programmes. Check our Rewards calculator for the rewards programme to suit your level of spending.

Not interested in reward schemes? Go for a card with no or low annual fees (check our credit card selector).