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Save $588 with a lower rate | Dollar Saver tip #54

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Save: $588

Tip overview:

By choosing a credit card with a lower interest rate you could save $588 a year and pay your debts off faster.

The average Australian with a credit card has a balance of $2,993. And with the average standard interest rate for a credit card now 19.82% p.a., you'll pay a lot of interest if you don't pay that off fast.

One way to make this easier is by doing a quick comparison and getting a card with a much lower interest rate.

Did you know?

Australians spent a record $34.3 billion on credit cards in August this year.

Let's say you spent $2,993 on your card, with the average 19.82% rate. If you put $100 a month to paying this debt off it would cost you $1,169 in interest.

And it would take you 3.5 years to clear your balance.

But if you had the same balance and the same repayments on a credit card with a lower interest rate of 11.99% p.a., you'd pay it off 6 months faster and pay $581 interest.

That means you'd save around $588 in interest.

A lower rate can literally save you hundreds of dollars when you repay purchases over time.

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