Like any other financial commitment, anyone who wants to apply for a credit card should be aware of the pros and cons.<\/p>\n
\u201cComparison is vital because all cards have different interest rates and terms and conditions.<\/p>
\u201cRemember, once you sign the contract it is binding until the money you have borrowed has been paid back.<\/p>\n
\u201cOur advice is always to understand the fundamentals, from which cards are available to how you can use each of them.<\/p>\n
\u201cKnowledge is definitely power when you have a credit card, which, in itself, is a powerful piece of plastic,\u201d he said.<\/p>\n
One of the benefits Thompson highlighted is being able to make purchases conveniently online, over the phone or on a laptop.<\/p>\n
When you only have cash, this limits you to having to go into a store to make purchases.<\/p>\n
Online buying is quick and simple.<\/p>\n
The same goes for completing a credit card application online \u2013 it can be completed in minutes and approval is usually within 24 hours.<\/p>\n
\u201cOnce your application has been approved you are given the choice of making the minimum payment due each month or the full payment,\u201d explained Thompson.<\/p>\n
While he states that paying the full amount is always preferable, being able to pay the minimum balance keeps the credit card affordable.<\/p>\n
\u201cThis is perfectly acceptable and a good choice if you have other debt to repay each month too.<\/p>\n
\u201cThe key is to never skip repayments.<\/p>\n
\u201cSticking to the repayment arrangement is important for many reasons but particularly because this will help you build a good credit score you can then use to qualify for bigger loans in life, such as a home loan or car finance,\u201d he said.<\/p>\n
Another good reason to have access to extra funds is when emergencies strike, and since these happen when least expected, oftentimes people do not have the money to fork out on critical medical treatment or major car repairs, for example.<\/p>\n
<\/p>\n
ALSO READ:<\/span><\/p>\n Get financially prepared for your bundle of joy\u2019s arrival<\/a><\/p>\n Teach your children about money while they are young<\/a><\/p>\n <\/p>\n Another benefit of a credit card is that there is\u00a0no need to carry cash.<\/p>\n This reduces the risk of theft, as the majority of businesses accept cards.<\/p>\n Thompson warned about responsible use of a credit card at all times as there are downsides to having access to extra credit if not managed correctly.<\/p>\n Tips to stay in the clear:<\/strong><\/p>\n \u2022 Never spend more than you can afford. Avoid thinking of a credit card as your money and always remember it is borrowed money that must be paid back \u2013 by you.<\/p>\n \u2022 Be clear on the terms and conditions. It may be too late when you realise what the interest rate and fees actually are. The type of card you have and the way you use it are governed by fees so ensure you understand what these are.<\/p>\n \u2022 Keep your personal information private. Only use secured sites for online shopping and do not share your card details with anyone over the phone.<\/p>\n \u2022 Use your card responsibly. Misuse can ruin your credit score, which is directly linked to how you use your credit card.<\/p>\n \u201cThere is no reason to end up in a credit nightmare.<\/p>\n Choose wisely when you apply and understand how a credit card works,\u201d Thompson said.<\/p>\n <\/p>\n Hav<\/strong>e a story?<\/strong><\/p>\n Contact the newsroom by emailing: Melissa Hart (Editor)\u00a0<\/span>germistoncitynews@caxton.co.za,<\/a>\u00a0<\/strong>Leigh Hodgson (News Editor)\u00a0<\/span>leighh@caxton.co.za\u00a0<\/a><\/strong>or Ashley Kiley (Journalist)\u00a0ashleyk@caxton.co.za.<\/a><\/strong><\/p>\n Also follow us on:<\/p>\n
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