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Australians worry more about annual fees than interest rates for credit cards


The interest rate charged ranks a very distant second.

Changes to interest rates might score all the headlines, but when you ask Australians about what features they think matter most in a credit card, a low annual fee comes up trumps.

A survey of 2,033 Australians carried out for found that a low or zero annual fee was the top choice in terms of key features, chosen by 81%. A decent interest rate on purchases came in second, but was selected by just 38%.

Here are the full results; each participant was asked to rank their three most important features, so the numbers don't add up to 100%.

Feature% desired
Low/no annual fee81%
Purchase rate38%
A good (non-frequent flyer) rewards program21%
The number of frequent flyer points per dollar18%
Cash advance rate17%
Travel/purchase insurance included14%
Prestigious card (gold/platinum/black card)5%
Free airport lounge pass4%
Concierge service1%

If you're an efficient credit card user and pay your balance off in full each month, then it makes sense to aim for a card with no fee, since that's the only expense you'll be running up on the card. However, it would be naive to assume that every single one of the 16.58 million cards currently in circulation falls into that category. If you are carrying debt on your credit card, then any annual fee you pay is likely to be dwarfed by the interest charges you'll rack up each month. And typically, cards with a lower annual fee will have a higher interest rate, so the "benefit" could wear off very quickly.

Prudent card users do have lots of choices, however. Right now there are more than 100 cards on the market with an annual fee under $50, and more than 40 which don't charge any annual fee at all. So if you are organised enough to be paying off your card each month and you are currently paying a fee, it would be sensible to investigate a switch.

Your card choice needs to remain an individual decision. I fly for work and pleasure at slightly ludicrous levels, so for me access to bonus frequent flyer points and the ability to pay for flights without incurring extra charges are key considerations. The benefits I score from that outweigh considerations around the annual fee. If I ever decide to give up the friendly skies, it will be time to change cards.

Angus Kidman's Findings column looks at new developments and research that help you save money, make wise decisions and enjoy your life more. It appears Monday through Friday on

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