Having a credit card is important but make sure you don't abuse it.
By Athenkosi Sawutana
The second quarter of 2018 saw an increased consumer appetite for credit cards. This facility can be a great tool if used properly. But if abused, it can easily create more problems than desired.
Are you using your credit card to pay off your other debts?
Do you use your credit card knowing that you won’t be able to repay the due amount at the end of the month?
If your answer is yes to these questions, chances are you are abusing your credit card. Fortunately, this can be avoided.
But first, let’s look at what happens when you abuse your credit card.
According to Ethel Nyembe, head of card issuing at Standard Bank SA, the following can be the result of abusing this facility:
How do you avoid abusing your credit card?
“The creditors are happy to give you more and more credit as long as you pay the minimum balance every month,” says Tanya Haffern, a wealth coach.
The new limit they give you should not be seen as extra cash in your pocket. Unless you can pay it off in full at the end of the month, don't use it, she cautions.
If you are unable to pay off the outstanding balance on your credit card in full every month, it shows that you don't know how to manage credit card debt. Therefore, you may want to close your credit cards and use cash for payments instead.
This article has been prepared for information purposes only and it does not constitute legal, financial, or medical advice. The publication, journalist, and companies or individuals providing commentary cannot be held liable in any way. Readers are advised to seek legal, financial, or medical advice where appropriate.