Many Australians who pay credit card interest seem to be signed up to high-fee, high-interest cards for no good reason, according to new research.

A survey of just over 2000 credit card holders in December by RFi Group, commissioned by ME bank, found 28 per cent said they did not consistently pay off their monthly balance before the end of the interest-free period.

Of these regular or occasional late payers, two-thirds (66 per cent) didn’t know the interest rate they paid, almost half (44pc) couldn’t quote their annual fee, and a quarter (27pc) were unaware of how much they were spending on the card each month.

Perhaps that’s to be expected. After all, who keeps these numbers rattling around in their heads?

What surprised ME bank what that 51 per cent of late payers said they didn’t know that low rate, no annual fee cards even existed.

Nic Emery, head of deposits and transactional banking at ME, said the research showed that many card holders could be getting a raw deal.

“The combination of a high ongoing rate and a hefty annual fee can make it a lot harder to get out of card debt,” he told The New Daily.

“Sticking with a high rate card means wasting money because at the other end of the spectrum, some cards offer considerably better value. Some low rate credit cards for instance, offer a purchase rate under 12 per cent per annum.

“The solution is simple. If you’re a [late payer], switch to a low rate credit card while doing away with annual fees. There are many good value deals out there that can put money back in your pocket – cash that can then be used to pay a bit extra off your card each month to clear the slate sooner.”

According to the survey, 10 per cent of late payers were shelling out an annual fee despite spending less than $500 a month on their card. By definition, this means their fee probably wasn’t worth it.

That’s because fee-charging card generally require well over $20,000 a year in spending just to break even. At $500 a month, a card holder is only spending $6000 a year.

For the entire survey, the average annual fee was $117 a year, on an average yearly spend of about $21,500. This could be a sign that high-rate, high-fee card customers should take a closer look at the fine print.

Fees and rates are important, as Australians owed about $52 billion in credit card debt in March, of which $32.5 billion was accruing interest, according to Reserve Bank statistics. (Although this was better than in February 2012, during the fallout of the global crisis, when we owed roughly $50.6 billion and were paying interest on $37 billion).

Should you have a credit card at all?

Credit cards are increasingly unpopular with younger Australians, and it’s easy to see why. Debt is a dirty word.

However, many experts say that credit cards can be beneficial, provided they are used correctly.

This is because they:

• Create a barrier between your money and fraudsters
• Smooth the gap between pay days
• Often insure your purchases against loss, theft and even damage
• Provide large amounts of buying power in an emergency (such as a car breakdown or overseas holiday)
• Often mandatory for some purchases, such as hotel reservations or car rental
• Build your credit score