Nearly a third of Australians with credit cards lose more money through fees and interest than what they gain through the card's rewards, new research shows.
The discussion paper from the Reserve Bank of Australia, released on Tuesday, estimates 40 per cent of card holders get a monetary benefit.
Most of those beneficiaries have relatively high wealth and incomes.
The other 60 per cent of card holders did not get a benefit, with half that group breaking even and the other half making a loss.
Regardless of whether card holders benefited or not, the study found most Australians don't choose cards best suited to their use.
People who use their cards to borrow and who pay interest could save about $250 each year by choosing a more appropriate card, researcher Mary-Alice Doyle found.
Her research suggests people tend to underestimate how much they will spend on their card, which can make interest charges less important when they are choosing which one to go with.
The big list of factors to consider when selecting a card - including annual fees, interest rates, interest-free days and rewards programs - can also prove overwhelming, the research suggests.
That complexity can cause people to stick to simple rules of thumb for choosing a card, such as which has the best rewards points, rather than considering every factor in selecting a card best-suited to them.
The RBA paper has also investigated how people's motivations for having a credit card relate to the benefits they derive from them.
About 30 per cent of card holders said they wanted to use the card as a method of payment, with those people tending to break even.
The 43 per cent who said they were motivated by rewards or other benefits were most likely to get the biggest windfalls, with the majority (more than 60 per cent) getting a benefit, averaging at $105.
The 11 per cent of Australians who were motivated to use their card to borrow made an average annual loss of $50.
The discussion paper drew on data in the central bank's 2016 consumer payments survey and information on credit card features.
About 72 per cent of Australians have a credit card.
