New Credit Cards

Reporter: Madeleine Kennard

The Christmas credit card crunch ...

Slugging Australian families when it hurts the most...

Last year the banks made 1.3 billion dollars from credit card fees and an estimated further 6.1 billion in interest. Despite the reserve bank lowering the cash rate by 1.25 percentage points two thirds of of credit cards have remained unchanged- some providers even increasing their rates.

Geoff Shannon from un happy banking says it's leading to a surge in credit card rage .

"It is sending a lot of people bankrupt that don't really need to be going bankrupt i think we have had enough." Said Geoff Shannon

John Symonds from mortgage broker aussie says there are simple ways to beat the banks and cut down your credit card bill in the lead up to Christmas...

"What about when you go overseas for a holiday pretty hard to have a holiday and not spend three four five thousand dollars in a lot of cases more with a family and going on a shopping spree and all of a sudden you are looking at getting slugged hundreds of dollars that is totally unnessacary." Said Aussie John

Credit card providers are making an extra 200 million dollars a year by charging aussie shoppers a 3% overseas transaction fee on all online purchases and international spending.

"We would rather give you the value in the lowest interest rate that we can afford to give you and give you benefits by not slugging you with what i call hidden fees such as purchasing online internationally or going on a holiday internationally and all of a sudden you are hundreds of dollars worse off." Said Aussie John

So fed up with all the money for nothing banks are getting from them .. Australians are using credit cards less ..

Michelle Hutchinson from rate-city says it's forced lenders to offer better deals - here are three cards she says could help you save hundreds if you shop online or travel overseas.

"There are ways to avoid fees when you are shopping on line or overseas. Compare cards that don't charge a foreign currency fee or an international transaction fee." Said Michelle

The ge money 28 degrees mastercard might have a high interest rate at 20.99% but there's no annual fee and no 3% currency conversion fee.

The new aussie platinum card's interest rate is just 13.29% but charges an annual fee of 99 dollars .. Again it's free of currency conversion fees.

"We would rather give you the value in the lowest interest rate that we can afford to give you and give you benefits by not slugging you with what i call hidden fees such as purchasing online internationally or going on a holiday internationally and all of a sudden you are hundreds of dollars worse off." Said Aussie John

If you find it hard to repay the debt in the allocated interest free period- Michelle says it's important to go for low rate interest card. She recommends steer clear of the big four... Go for smaller credit card providers...

"There are a lot of cards on the market that are also offering rates from as little as zero percent on purchases for a certain period of time like six months so there are a lot of deals out there that can save you a lot of money especially with Christmas shopping." Said Michelle

Her picks are... The greater building society visa with an interest rate of 10.25% and an annual fee of $40... Followed by the victoria teachers mutual bank visa with a rate of 9.99% and an 84 dollar annual fee.. And her top pick is the community first credit union low rate visa, a 9.50% interest rate and a 40 dollar annual fee.

"Consumers need to get off their butt and do something about it and save potentially hundreds of thousands of dollars and spend it on themselves and their family rather than throwing it away to the banks and the big credit card companies." Said Aussie John