Credit Card Hints

Credit cards can be extremely beneficial but they need discipline. With the ongoing economic issues you need your credit card working for you not against you.


Credit Card Features


 

Do's and Dont's

  • Only use your credit for purchases or experiences you can actually afford.
  • Only obtain a credit card limit that you know you can afford and will not provide high level of stress if you use all the available credit.
  • Resist the temptation of having multiple credit cards.
  • Look to pay off your outstanding balance or as much as you can at the end of each month.
  • Make sure your credit card rewards programme actually adds valuable benefits to your card.
  • Make sure you pay at least the minimum monthly payments as identified in your credit card statement.
  • Make sure you review your credit card statement at the end of each month so you know your balance, your interest rate and the amount of interest you are actually paying each month.

Credit Card Benefits

A credit card can be very beneficial but can also be a trap. If a credit card is used in moderation and used within the cardholder’s limits it can be very beneficial. Credit cards allow you to purchase or create experiences that you may not be able to afford right now but you can pay off over a period of time.

It is important to note that if your credit card is active then you will have a minimum monthly repayment to make. The minimum repayment is the interest on the outstanding balance but it is always advisable to try and pay off your credit card as quickly as you can.

Most credit cards will provide you with an interest free period.


 

What to be careful of

The interest rates on credit cards tend to be much higher then other credit facilities. Therefore if you are an active credit card user and you are not paying off your outstanding balance before the interest free period expires then you will be paying a high interest rate. This can make it hard to reduce your credit card debt.

As most credit card limits are low some borrowers tend to neglect the fact that the interest payment is relatively small on a month to month basis. This is a dangerous practice because the amount of interest you pay can quickly jump to exceed the value of your actual debt.

Be very careful of having multiple cards and be very careful of taking up the marketing promotions from credit card providers when they actively try and get you to increase your credit card limit.


 

Credit Card Independent Ratings

There are a number of independent websites who compare interest rates & star ratings for loans, cards, accounts, insurance.

To help you understand how some credit cards are rated we have provided a link though to an independent ratings agency, click here to visit Canstar Cannex.


 

Credit Card Fraud

Unfortunately credit card fraud does exist. While credit card fraud is rare, when it does happen to you it is a very frustrating and quite possibly expensive occurence. While insurance covers most credit card fraud there are some cases where your account institution may hold you accountable for the losses.

You should guard against fraud by following these steps:

  • Always keep your card in a safe and secure place
  • Keep your PINs and passwords all strictly to yourself
  • Never keep your PINs and passwords in your wallet or in your hand bag, as these could likely be stolen at the same time as your credit card
  • When buying things online - keep your passwords safe and secure. Be very fussy on who you buy from online and only buy from secure internet sites and payment systems such as BPay
  • Check your account statements promptly and carefully and notify your bank if there are any purchuses which you dont understand or dispute. There will always be a contact number on your account statement
  • Contact your bank immediately when you realise your card has been lost or stolen

 

x