Obviously, the assumption is that the big spending are on credit. Maybe it is true, but everywhere I go there are always big spenders that are not on any debt (young renters, people who have paid off their mortgage, etc). Anyway. While the latest interest rate rise might be a double blow that puts lots of pressure on struggle families, at least it is a great news for those who saves (especially when ASX is not doing too well either).

One of my favourite section on OzBargain is the Financial Category, where “bargain hunters” all share the latest and best saving schemes (Kevin, we hear ya!) Note — these are not those “make fast money on the Intraweb” schemes but mostly saving accounts offered by various financial institutions in Australia, fine prints checked by OzBargain members!

For example,

• RaboPlus — 7.30% Online Saving Account. One of the highest rate saving account with a nice web interface + “Digipass” their authentication device.

• BankWest — 7.75% Online Saving Account (honeymoon rate for 1 year, 7.25% afterwards). Best rate if you are not yet a BankWest customer. Their online banking interface has got a bit better (although I was having heaps of trouble 2 years ago).

• Members Equity — 7.50% Online Saving Account. Probably the best non-honeymoon rate although I have no experience with them. Definitely a bank to look out for.

Many online savers are also offering term deposit at around 8-8.15% for 6 month, but lower for 12 months. Maybe the interest rate is predicted to drop within a year?

We all know competition ultimately benefits the consumers, don’t we? Recently RaboBank entered into retail market with its RaboPlus branded online saving, term deposit and managed fund platform account, offering the best interest rate. It quickly sent the competitors into panic mode. BankWest came up with Regular Saver account with 8% interest rate plus a long rope attached to it. ING Direct on the other hand pumped the promotional rate to 7% until the end of year. Unfortunately for existing customers, it wasn’t the entire amount of saving, but just extra amount on top of existing balance. That suck big time. I’ve been an ING Direct customers for years, and guess where I moved my money to?

Then this morning I received another deal sweetener.

Thanks to somecheat for posting this promotion on OzBargain, RaboPlus is now offering 7.1% interest rate on not just the new users, but also existing users — for the entire account balance!

Special promotional rate of 7.10%

• High interest promotional rate until 2 Jan 2008
• Includes amounts up to $1 million
• No fees or penalties, no minimum balance
• Digipass online security with 24/7 access

Oh yes. Competition is good.

On a side note, Tiger Airway offered $10 air ticket departing from Melbourne, but the sale only went for one day. Did I say competition is good?

Special offer to SMSPup members: earn yourself $50

As an SMSPup member, apply for a new 6.70% pa RaboPlus online savings account between Sunday 7th October and Saturday 13th October 2007 and we’ll kick start your savings with $50 when your account is opened.

Important Note: To take up this offer, please quote SMS1007 in the promotional code field when you apply online. Conditions apply.

Having been with RaboPlus for 2 months now I am pretty happy with the service. Its online banking interface is top notch, where you can manage your saving account, term deposit and managed fund from the same place. The “security device” can be a bit inconvenient as you don’t usually carry it around — but you do carry around your notebook computer to log into their website. My wife actually could not remember her PIN to her security device and locked it up after 5 failed entries, but they were happy to send a new one to her free of charge (plus a temporary master password so she can get through the security, but that’s another story…)

Thanks to T2 who submitted the deal to OzBargain.

Credit card has always been a major problem in Australia. It is an easily approved personal loan, which “helped” many Australians into very deep debt. Therefore many have portrayed it as an evil master that you kept in your wallet, and for many people it would be better of without a credit card.

But maybe it is just me, I have absolutely zero problem with credit cards. In most cases I am less an impulsive buyer, which means there is even less a desire to pull out a credit card at inappropriate time. In fact I am often the opposite — thinking way too much whether I really need it, and often only concluded that I wanted to buy after missing out the good deals! In my case, credit card has been my tool to get even more discount when I go shopping. Since I always have a rough idea on how much I have in my bank account, and will never buy more than I can afford even on credit, I can always pay off the balance before any interest is charged.

Anyway, this post is not about how one should use credit card without getting into too much debt, but rather how my existing credit cards have helped me to save.

These are the cards I have.

BP-Citibank MasterCard

I have previously reviewed this card thinking the benefit does not justify, until this deal showed up. Now the BP-Citibank MasterCard has became the main card for the household. Not sure whether that BP-Staff deal still works, but there are certainly other offers (if you search around) that either give you no annual fee, or BP fuel vouchers.

Pros

• 1% cashback on all transactions, up to $600 in 12 month window.
• 5% cashback on BP purchases, i.e. $1.30/litre fuel you’ll get 6.5cent/litre off.
• First year annual fee waived + $50 fuel voucher if you use that BP-staff deal.

Cons

• Expensive annual fee ($79 + $30 per additional card) — even more expensive than some gold cards.
• Citibank’s Internet banking facility leaves much to be desired.
• It is GREEN! Just does not match my wallet :)

NAB Visa Mini Card

I looked at this one almost 2 years ago, later applied, and have been using it for a year and half already. I am currently using NAB Visa Mini for all my business related expenses, just to separate them out from my other cards. I keep the actual mini card at home as they are pretty useless, and just use the regular size card.

Pros

• 1% cashback on all transactions, up to $10 per month.
• Relatively low annual fee at $19/year.
• Came with useless accessories like plastic card holder, strips, etc.

Cons

• Only $10/month cashback, i.e. spend more than $1,000 and no more cashback for the month.
• Automatic payment/direct debit is only available to NAB transaction account customers, which I am not.
• If Citibank’s net banking facility is bad, NAB’s is even worse.

Virgin Money Credit Card

I have got my rounded-corner Virgin Money Credit Card for a few years now, and I have only used it once. However I am still keeping it for one simple reason — no annual fee! And if there is a good Mate’s rate reward I can always pull up mine.

Pros

• No annual fee, which means everyone can afford to have one.
• Virgin Mates rate instant rewards. Pretty good savings sometimes.
• If it is from Sir Richard Branson it must be good. There is even a Wikipedia entry about it.

Cons

• Everyone seems to have one.
• I never seem to know which shop gives me Mates rate. Often a few days later I checked the web, “hey I could have used my Virgin Visa Card!”

Coles Myer Source Card

I personally don’t use this card, but my wife does. We keep our Source MasterCard also for one reason — 4cent per litre fuel voucher from Shell, if you spend $30 or more from Coles or Kmart. Oh, there is no annual fee as well. It is also very easy to apply. My parents, who do not have full time job in Australia (they work overseas), have no problem walk up to their counter and come back with a card.

Pros

• No annual fee!
• Extra 4 cents/litre fuel voucher if you spend $30 or more in Coles.
• Shopping voucher when you first sign up (10% off Myer voucher in my case).
• Earn you extra FlyPoints!

Cons

• Anyone ever redeemed anything from FlyPoints?
• No rewards if you shop elsewhere.

ANZ Reward Visa Card

I have been an ANZ customer for almost 1 years, and my first credit card was an ANZ Telstra Reward Card. That card has been renewed a couple of times, and I currently have this ANZ Reward Visa Gold. However, I am planning to get rid of this card in the next month or two, and I am just listing it here since I am still carrying it in my wallet.

Pros

• Linked to my ANZ accounts.
• It earns you some reward points when you spend, more points when you spend in its expensive partners.
• It is a Gold Card! Now show respect!

Cons

• Expensive annual fee — $101 per year + $22 additional cards.
• It only has an effective cashback rate of 0.53%, in the form of points.
• Everyone else has Gold or Platinum cards.

Others

We do have other cards in the past, and quite a few American Express as well. Both my wife and myself love American Express. It always gives free gifts (travel luggage, watch, magazine subscriptions, etc), and annual fee is always free for the first year. So we pretty much just applied for them, got the gifts, and then cancel the card. Except you might need to be in some professional fields to get these offers — my wife is a CPA so she always got those American Express offers. I am just a lowly engineer and has never received any :(

Any other good credit cards around that offer shoppers good rewards?

As they have claimed — at 10% it’s Australia’s highest children saver account. Quite a few conditions though.

1. Under 15. I guess I don’t qualify this one.
2. $25-$250 deposit a month. No more, no less.
3. Linked with Children’s Saving Account, required.

It has no account keeping fee, and provide fast access to funds for the parents or guardians. It has those limits to ensure it is used for saving for the children (instead of someone else’s high yield saving account). We are thinking of opening one for our daughter first thing next year. Good to start saving earlier.

Do note about the tax implication though. Minors have relatively low tax free bracket at $416 in Australia, and you’ll have to pay 66 cent in a dollar earned up to $1,445 after that. Very hefty I’ll say (to prevent abuse of course). So start saving when they are young, but don’t put all your money into their saving account, unless you love ATO so much.

Citibank offers Gold card for no fee ever. Even sweeter, it comes with the Qantas frequent flyer rewards program with a ratio of 1:1. But if you go to the citibank webpage, you wouldn’t find the page that offers the card for no fee.

That’s certainly sweet, and I guess InfoChoice’s credit card comparison table needs an update. Unlike many other banks, Citibank’s Gold Card offers no fee and interest free period. Moreover it has all the benefits of a gold card — travel insurance, higher credit limit, etc.

Except I have no idea what frequent flyer points are for, as I don’t travel that often. Anyone with no fee, interest free period, gold card benefits and monetary rewards like cash back?

I was very tempted to apply yet another credit card. But after reading the fine prints and thinking through, I don’t think it justifies. Let’s look at this deal.

• 5% off your petrol and everything else you buy at BP

  What else are you buying from BP? Hmm. Nothing. I don’t buy grocery in petrol stations unless in very urgent circumstances. That leaves 5% off petrol purchases, which equals to around 5-6 cents per litre these days, up to $15 saving a month.

  Not bad. However I am currently using our Coles Source MasterCard, which gives us 4 cent docket + 4 cent mail-in coupon discount per litre from Shell. That’s 8 cents per litre saving! Procedure is a bit more complicated as you need to remember to keep the shopping dockets and coupons, and have to make $30+ grocery purchases from Coles, etc, but so far we have no problem getting 8c/litre off everytime we go and fill up at the pump.

  5% off will only win out if the petrol price raises above $1.60/litre. Or if BP Ultimate is your fancy (I know some people do). Otherwise stick to Source MasterCard with Shell.

• 1% off everything else you buy anywhere

  1% rebate on everything! Yeah!! It is capped at $600 a year, but seriously, I don’t see myself rocking up $60,000 a year on my credit cards. My current NAB Visa Mini also has 1% cash back but capped at a relatively low $10 a month, but so far it works fine for me. Moreover, BP-Citibank MasterCard has annual fee $79 + $30 per additional cards, whereas NAB Visa Mini is only $19 with free additional cards.

• 6.9%p.a. for 6 months for all balances transferred

  … and a ridiculously high 17.95% afterwards. I always pay my credit card bill in full, so no thanks. I have to say that credit card is the worst way to borrow money because of the high interest. Use a credit card for convenience and associated rewards’ sake, but don’t use it if you might have difficulties to pay the bill in full at the end of the month.

Any other good rewarding credit cards that I should consider?