Eight million of us have one. In fact, many have more than one. And my bet is most are old, wrong ones. Our credit card companies have slugged us with outrageous interest rates, nasty foreign currency conversion costs and astronomical annual fees, all for paltry points.

But you no longer have to simply take the hits. Here are my top picks from the new breed of circumstance-specific credit cards – and how to use them so that you, not your provider, win. If you clear your card in full each month….and don’t want points:

ME Bank’s Low Rate Credit Card (MasterCard) This great-value little card has no annual fee and still manages among the lowest interest rates going (not that you will ever pay it).

  • Purchase rate 9.99 per cent
  • Cash advance rate 9.99 per cent plus the greater of $4 or 2 per cent of the cash advance amount (and never forget no card gives interest-free days on cash advances)
  • Interest-free days Up to 55
  • Annual fee $0.
  • … and use a card for points:

    ANZ Rewards Platinum American Express and Visa This dual card is a persuasive deal at the moment if you will charge enough to justify the annual fee; it strikes a middle ground between the highest points-accrual and the lowest annual fee – and the current bonus points offer is a good one.

    Points can be redeemed for “any leading airline or hotel, cashback, gift cards or merchandise”.

    The card also comes with some decent travel insurance for those free trips! (You need a minimum annual income of $50,000 to qualify and the deal – no surprises here – is not available to existing customers or to those who’ve closed card accounts in the past six months. As always, it pays to become a new customer.)

    • Points accrual rate Three for every $1 spent on Amex; 1.5 for every $1 spent on Visa
    • Bonus points 50,000 if you make a purchase in the first month (available on sign-up before May 5)
    • Purchase rate 18.79 per cent
    • Cash advance rate: 20.99 per cent
    • Interest-free days Up to 55
    • Annual fee $149. Also be aware of a $10 additional cardholder fee plus a “Rewards Program Services Fee” of $55.

    So you know If you’re using plastic for points (my own approach), you must ensure they’re worth it. You could pay a $1200 annual fee for a rewards card if you were so inclined but unless you’re a massive earner and put through – and promptly pay off – a huge amount of transactions, you’ll lose out.

    It’s vital to always pay off in the interest-free period a card you’re using for points; if you incur their higher interest as well as their higher annual fees, you’ll never come out ahead. And watch the redemption rules closely. Airlines are notorious for changing them.

    If you don’t clear your card in full each month transfer it to:

    St George Vertigo or Bank of Melbourne Vertigo Visa card And move heaven and earth to pay it off in the 18 months you get interest-free. Other advantages of this card are a relatively low annual fee, as well as 0 per cent interest on new purchases for the first three months (but beyond that remember you’ll get charged interest that could cancel your balance transfer savings). You can transfer balances from up to three (non-affiliated) existing cards (so again it’s new customers only).

    • Balance transfer rate: 0 per cent
    • Balance transfer period: 18 months
    • Introductory offer: 0 per cent on purchases for 3 months then …
    • Purchase rate: 13.24 per cent
    • Cash advance rate: 21.49 per cent (fees apply too – but don’t ever use this card for cash advances)
    • Revert rate for outstanding balances: 21.49 per cent
    • Annual fee: $55.

    If you still have a remaining balance after 18 months, transfer it again to:

    Bankwest’s More MasterCard (but in reality by the time you’ve finished balance transfer No. 1, there will likely be a better, longer deal going. And yep, you have to be a new customer). Then move heaven and earth to pay it off on this second 18-month interest-free deal.

    • Balance transfer rate: 0 per cent
    • Balance transfer period: 18 months
    • Purchase rate: 19.99 per cent (from day of purchase)
    • Cash advance rate: 21.99 per cent (fees apply too – but don’t ever use this card for cash advances)
    • Revert rate for outstanding balances: 19.99 per cent
    • Annual fee: $70.

    So you know: Tut tut to ANZ for following the industry’s worst practice and imposing a 2 per cent balance transfer fee; this would be $100 on a $5000 transfer, with the annual fee on top; brownie points to Westpac and Citibank for stopping the slug, for now.

    But note that the latter’s longest-in-market, 24-months interest-free Platinum Visa deal comes at a $199 annual cost (and a crazy $90 additional cardholder fee, not that you should use even one of this card type for purchases – see below).

    Carefully do your savings sums if you’re tempted.

    Don’t fall into the balance transfer traps that all cards carry

    1. New spending (after any intro deal) attracts nasty purchase rates, from day one. Instead, use a card that will get you 55 days interest-free and is also cheap. This can be your existing card or, if that carries an annual fee, the ME Bank Low Rate Credit Card above. (This is if you are confident you will always be able to repay your full balance each month. If there is a risk you’ll incur interest, read the next section …)

    2. At the end of the interest-free transfer period, any remaining transferred balance will attract an eye-watering interest rate (see above). Either repay it within the period or move it at the end. Two 0 per cent balance transfers are OK; any more than this and you’ll start to look like a bad prospect to a provider and could get knocked back in future for credit. So… If you still have outstanding debt after two balance transfers, open the best low-rate card and keep chipping away at your debt:

    Community First Credit Union’s McGrath Pink Visa This is Australia’s lowest rate credit card, although it’s a shame they ceased offering an even better 4.74 per cent introductory rate for the first nine months. Use this to pay down your remaining debt as quickly as possible – and live within your means from now on.

    • Purchase rate: 8.99 per cent
    • Cash advance rate: 8.99 per cent
    • Interest-free days: up to 55
    • Annual fee: $40 (half of which goes to the charity).

    If you have unexpected expenses you can’t meet in the short term and feel a credit card is your only option) pay them with the:

    Nab Low Rate Visa card. Nab has reduced the interest-free period on new purchases by three months, but this is still a good deal. Just don’t be tempted to rack up more debt than you absolutely need to – and pay it off in the 0 per cent period. (Existing customers need not apply.)

    • 0 per cent purchase rate period: 12 months (apply by October 11).
    • Purchase rate: 13.99 per cent after the introductory period
    • Cash advance rate: 21.74 per cent (fees apply too – but don’t ever use this card for cash advances)
    • Revert rate for outstanding balances after 12 months: 13.99 per cent
    • Interest-free days: up to 55 after the introductory period (if you’ve cleared your entire balance)
    • Annual fee: $59.

    If you’re headed overseas or love an online shop…

    … and you have cash:

    Citibank Plus Account (Visa debit). You pay no currency conversion or international transaction fees and no ATM fees. What’s more, there’s no monthly/annual fee and the account’s exchange rate is updated daily.

    This makes it as cheap as chips to access your cash overseas or online. (It’s just a shame they removed early a deal to get 5 per cent cashback of up to $500 a month on Visa payWave purchases.)

    … and you want credit (but pay it off immediately you get home!):

    Bankwest Zero Platinum MasterCard, which levies no foreign currency conversion fee (typically as high as 3 per cent), and has no annual fee and complimentary travel insurance. There’s also a 24-hour concierge service, should you need it.

    You need to be approved for a minimum credit limit of $6000 (so you require the income to support this).

    • Purchase rate: 17.99 per cent (make sure you never have to pay it)
    • Cash advance rate: 21.99 per cent (you’ll also pay 2 per cent or $4, again the greater, unless you pre-load your card with cash before you travel)
    • Interest-free days: up to 55
    • Annual fee: $0
    • Overseas-ATM usage fee: $5.

    After reading all this you might be tempted to say “I can’t be bothered with any of these changes because it means moving all my direct debits”…

    You don’t have to change them at all. New-ish direct debit rules mean you simply ask your existing card provider to give you a list of all your scheduled transactions, then ask your new provider to re-establish them for you.

    What are you waiting for?

    Posted by Nicole Pedersen-McKinnon – The Age on 23rd April, 2015