How to control your card

CONSOLIDATING debts, balance transfers and repaying cash advances are among the best ways to manage credit-card debts amassed over Christmas.

Value Hunter asked the experts at Choice and financial research firm Canstar Cannex for their top tips on how to tackle your credit-card bill and the traps to avoid:

1. Consolidate debt. If you have more than one credit card, keep the one with the lowest interest one and close down the others. You'll save on annual fees.

2. Consider a balance transfer to a new card on a low rate. Some are even offering zero per cent. Be sure to close them down once the debt is repaid and the interest on the card jumps back to a higher rate.

This is good if you can repay the debt within a specified time.

3. There's also a new breed of card offering a low rate for the life of the balance. This is worth considering if you can't repay the debt in the short term.

4. Switch to a debit card, where you have the flexibility of using a card but you are spending your own money.

5. Always pay more than the minimum repayment.
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6. Beware of cash advances, because interest can accrue immediately. Usually no interest-free days apply on cash advances. High fees may also apply on cash advances.

7. Check if electronic bill payments (BPAY) are regarded as cash advances by your provider.

8. Pay cash advances off as soon as possible, but check how much you need to pay -- you may have to pay the full balance, as any payments you make may be applied to purchases first.

10. Set up a direct debit from your account to pay the credit card. Going beyond the due date of a minimum payment may cost you as much as $35.

11. Check your card balance if you think you may be close to the limit.

12. Don't bother with a rewards credit card if you pay interest.

13. Stick to a card with no annual fee if you spend only $1000 a month. With the average rewards card, you'll pay more in annual fees than you earn in rewards.

Consumer Credit Legal Centre chief executive Caroline Bond says spending on credit cards is more a psychological issue than a financial one.

"People need to take control, rather than letting their credit cards control them," Bond says.http://www.news.com.au/business/money/story/0,28323,24894877-14327,00.html

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