Using a credit card

Continuing further from our past article on Credit Card Jargon Buster, let’s today talk about some good tips on how to use your card wisely.

Whether you’ve just received a new credit card or have been using one for years it makes sense to check that you are using your card sensibly. This article has a few top tips to keep your finances healthy and give you peace of mind.

Please understand it clearly that Credit is not free money. If you want to borrow on your credit card check that it is the most effective way to pay for what you have in mind. A credit card can give your finances flexibility but is not the most sensible choice for long-term borrowing.

It’s common sense that if you can't afford to repay it then don't spend it.
When choosing your credit card you should have carefully considered what you want it for and so should be aware of its features and terms and conditions, and how you intend to manage your repayments.


Top 10 tips to get the most from your card

1. Spend only as much as you can afford

If you don’t intend to pay off your statement amount in full every month, and before you use your credit card anymore, ask yourself if you can afford the repayments. Do NOT use your credit card to buy goods you can't afford or don't need, or to fund a lifestyle that is beyond your means.

2. Set up a Direct Debit to pay at least the minimum payment each month

That way you can ensure you never incur any late payment fees. Talk to your card company to find out how to do this.

3. Don’t make the minimum repayment on a long-term basis

Unless you’re taking advantage of a special deal or zero per cent offer only ever making the minimum repayment will take you longer and cost you more to clear your debt. It’s NOT a recommended payment schedule.

4. Ensure payments reach your account on time

Payments can take more than three working days or more to reach your account. There will normally be information on your statement that tells you how long you should allow.

5. Check your monthly statement

Managing your money means knowing what you owe. How much interest are you paying? What repayments must you make? The answers are all on your monthly statement.

6. Keep your PIN safe

Don’t write down your PIN or lend your card and PIN to others. If you do you could be held liable for any fraud on your card.

7. Think about how many cards you really need

If you believe you have more cards or more credit than you can resist or reasonably manage, talk to your credit card company and ask them to reduce your limit. Alternatively, if you no longer want or need a card, cancel it with your credit card company and close the account.

8. Read all correspondence from your credit card company

Your card company will send you important information about changes in your terms and conditions, including increases in your credit limit, special offers including balance transfers, and, potentially, credit card cheques. Reading these updates will help you manage your credit card account responsibly.

9. Keep some savings for unforeseen circumstances

A sudden emergency or loss of employment may mean that you cannot afford to make your repayments. Having savings can help you through such times.

10. NEVER IGNORE DEBT PROBLEMS!
If you are unable to meet your monthly repayments and you are finding it difficult to pay off the outstanding balance on your credit card you should contact your credit card company immediately. The earlier you speak to your card company the easier it will be for them to help you with your situation and assist you to make a repayment plan.


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