South Africans often blame their credit cards for getting them into debt — but it’s really the way we use those cards that counts. When you use them responsibly, credit cards can help you manage your financial portfolio and increase your affordability so you can qualify for, say, a home loan later on.
There are no transaction fees when you use a credit card for purchases, and if you settle your account in full every month you won’t pay interest on those purchases. Don’t think only flat-screen TVs and fridges — you can also use your card to buy groceries. Just be aware of the interest you’re charged if you opt for a budget purchase option at a point of sale, which means you’ll be paying off your purchase in equal monthly instalments. Most importantly, make sure you can afford those repayments. It’s when you lack discipline and overspend that you get into trouble.
Credit is really only bad if it’s not properly managed — if you use your card responsibly, it’s an undeniable convenience.
Did you know?
- You can ask your bank to charge back irregular transactions; the onus is on the credit card merchant to provide proof in the event of a dispute.
- You can get purchase protection insurance on certain cards.
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