The idea of having a credit card always seemed like such a big deal for me. Maybe it’s because of watching all those shows when I was a kid where the characters had at least three different credit cards and they had to split that R5000 dress between all three just to make sure they could afford rent too. 

I never wanted to be that broke. 

Plus, I know of a couple who got into some serious credit card debt and it caused some pretty big problems for them and their marriage. So I’m scared of that too. 

But then I decided to speak to an expert to ask what the pros and cons of getting a credit card are. 

"As with any credit product, the customer has to use it wisely and not extend themselves beyond their means.”

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I asked Chris Wood, who is an executive of card issuing and payments at Nedbank and head of American Express South Africa, if I should be afraid of getting a credit card and his answer was a point blank no.

“Many customers who take up a credit card product manage their day to day finances and use it as their primary transactional account. In this way, they have access to it when they need it for large or once-off purchases. A credit card is an extremely useful and convenient banking product,” he said.

“It can be used to pay for goods and services in store, for online purchases and do mobile payments applications. A credit card is also a very secure way to make payments, providing visibility, payment protection for purchases and security to the cardholder. As with any credit product, the customer has to use it wisely and not extend themselves beyond their means.”

Credit cards can be used for many things – small and large purchases alike – and can provide security when making certain purchases.

And while that helped eased my anxiety a bit, I still wasn’t easily convinced that this was the right option for me.

So I asked if having a credit card means that you’ll immediately be in a lot of debt?

Chris says that’s actually not the case and with most institutions, it’s easy to complete a form that will tell you whether you qualify for a card and what your line of credit would be.

“This is all calculated based on the income and expenses captured by the customer and how much they may need. In addition, a customer does not need to take the whole limit they qualify for, and can adjust the limit up or down over time once the card facility is opened. It’s always a good idea to manage the balance wisely and keep track of your account.”

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So when exactly is the best time to get one?

Chris says there’s no right or wrong time, simply that you know you have the funds to pay it back. “Many customers take out a credit card product to benefit from the flexibility it gives them and to earn rewards, and actually shift their spending behaviour from debit cards to credit cards to earn these additional benefits faster,” says Chris.

Credit cards can be used for many things – small and large purchases alike – and can provide security when making certain purchases. “There is no prescriptive way of using a credit card, but it is a secure way of purchasing goods and services (rather) than using cash,” says Chris.

What should you never use a credit card for?

“We would never recommend using a credit card to pay off other debt, compounding debt with debt is not advisable. Other than that, credit cards add flexibility to purchases for customers when they need it,” says Chris. 

Here are a few tips for what you should do once you do have a credit card:

  • Pay at least the minimum monthly repayments on your credit card as this will save on your interest charges. Any extra funds paid immediately reduce the capital, which means that interest charges drop from the moment the extra money goes in.
  • If possible, pay the full outstanding amount on your credit card each month. If you are disciplined with the use of your credit card, this is the cheapest way to pay for goods and services as there are no transaction fees and no interest. This will ensure that you establish an excellent credit record with your bank and the credit bureaus. The easiest way to achieve this is to set up an automated payment on your credit card.
  • Avoid late payments. If you miss a due date, you could be charged a late payment fee. If you get into financial difficulties contact your bank immediately and make a repayment arrangement.

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But the most important thing you should know before you go ahead and get a credit card?

Chris says: “Find the right product for you, your lifestyle and what you want to achieve with the card. It’s always a good idea to do your homework and find the right card that fits your needs and aspirations.”

I am less scared of getting a credit card now even though I know that I don’t really have a need for it but it's good to know what I can use it for in the future.

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