Credit comes rather easy these days with banks offering consumers credit cards at a drop of a hat. With a credit card, buying stuff that you thought you couldn’t afford is much easier these days. But can you afford it? The credit card gives you the power to buy something earlier rather than later, but it all comes at a price.
Let’s do a quick check on your credit card to see whether you can afford to have one. Many a person have had to cut up their credit cards to curtail their spending habits. Are you one of these people?
Have a look at the fineprint attached to your credit. Be aware of what interest rate you are paying? Is it a high interest rate? Did you just buy that super you beaut latest model flatscreen TV using your credit card?
Do a quick calculation to see how much your flatscreen TV will cost you in the end. Estimate how long it will take you to pay off the true cost of that flatscreen TV.
Here are some ways to save money using your credit card:
If your credit card has a rewards system attached to it, use your credit card to accumulate points and take advantage to select a product or service from the rewards catalogue which you really need.
Use your credit card and make sure you pay off your monthly credit bill on time. If you do this diligently, you will save money on all those hefty interest charges.
Consider having a direct debit facility from your cheque account to ensure you pay your monthly credit bill on time. This point relates to the above point. To avoid the hassle of not paying your bill, set up a direct debit facility from your cheque account to pay the full amount of your monthly credit card bill. This will ensure you save enough money in your cheque account to meet your debts.
Juggle your 2 credit cards to extend your credit.
If you have more than 1 credit card, use your credit cards wisely to extend your credit. Each of your credit cards will have a different bill payment date. Depending on the time of your purchase, use the credit card that will give you the maximum number of days to make payment.
If you are going to get into good habits and save money using your credit card here are 2 simple rules to follow:
- Try to avoid making impulse purchases just because you have a credit card.
- Avoid making purchases you can’t afford if you didn’t have a credit card.
If you can’t stick to some good habits with using your credit card, it may be best to ask yourself whether your credit card is your friend or foe?
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