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Three credit card mistakes to avoid in the new year


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New Year, new plans! If you're looking to start 2020 off on the right financial foot, it might be time to have a look at your credit card spending.

It's easy to get yourself into a bad position with debt, even when you have the best of intentions. To help make sure you get the most out of the New Year, here are three common credit card mistakes to be aware of and avoid.

Maxing out your cards

Credit cards are best used as a safety net, rather than for general spending. If you use up your safety net in times of ease, it won't be available to you if something unexpected happens and you find yourself in a financial crunch. Also, if you aren't in a position to pay your credit card balance in full, maxed out cards can mean large interest payments.

sponsored content three credit card mistakes to avoid

If you managed to avoid carrying credit card debt into 2020, don't go wild with purchases now. Some helpful ground rules to keep your spending in check include:

  • Don't spend what you don't have. If you won't be in a position to pay off your full credit card balance at the end of the month, put it away and don't use it.
  • Set a budget for your credit card use, whether that's committing to spending a certain amount each month or reserving your credit card for specific types of purchases.
  • Don't impulse buy. If you see something you like, write it down or take a photo and wait three days. If you still want it, consider your budget first.

It's all right to give yourself a present once in a while, just make sure you won't be paying (and paying and paying) for it later!

Taking out cash advances

Cash advances are typically subject to a higher interest rate and won't have a grace period before interest starts accruing. If you know you will need cash for a particular purchase, try to keep some aside from your pay and use your credit card for other purchases. Avoid using your credit card at cash machines unless it's an emergency.

Using the wrong card

It's important to use the right card for every purchase, not just the most convenient one or the one whose number you have memorised. Look for features that compliment your lifestyle.

  • If you want rewards points, look for cards that have a high point value system and generous points per dollar parameters.
  • If you travel a lot, look for cards that have great travel points or air miles on offer. This can reduce your out of pocket costs when you go on holiday.
  • If you prefer cashback on your purchases, look for cards that give you the biggest return for the things you use your card for most. Bank of Queensland's Blue Visa Credit Card - recently named Money magazine's Best Reward Credit Card 2020 - offers $120 cashback when you spend $500 per month for the first three months.
  • If you want to transfer a balance from a higher interest card, look for cards with generous Balance Transfer options, like lengthy no interest windows.

With 2020 marking the start of a brand new decade, there's no better time than now to re-assess and map out your financial goals.

This article is for general information purposes only and is not intended as professional advice, and has not been prepared with the financial circumstances of any particular person in mind. You should seek your own independent financial, legal and taxation advice before making any decision in relation to the material in this article. Terms and conditions apply to the Blue Visa Credit Card cashback offer.


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Andrew Toone joined Bank of Queensland (BOQ) as general manager of product in 2015. He has more than 25 years' experience in banking and insurance, and has held senior leadership roles across actuarial, insurance, wealth, banking, finance, product and pricing functions. Before joining BOQ, Andrew spent 11 years with the NAB Group, where he held senior roles in wealth, corporate and consumer banking. Prior to this, he worked for AXA in the UK, Australia and Asia.
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