What's in your pocket?

By Staff Writer

In an ideal world you would never have any need for a credit card, a home loan or any other form of borrowing. Unfortunately, for the majority of people this is not a very realistic prospect and we almost all need to borrow money in some form, at some time. That’s why it is so important to make sure you borrow on your terms – being in debt doesn’t have to leave you with that sinking feeling.

Sensible and informed borrowing can allow you to have better control over your finances: if you borrow on the best terms available then you can get a bit of breathing space, whereas if you make the mistake of getting sucked in to high rate debt and painful terms you will have quite the opposite experience.

So which are you? If you have already done the research and made an informed choice on which credit card is best for you then you are an exception. If you are paying an interest rate of over 20% pa on your credit card then it is possible that you’ve made a mistake. If you don’t even know what rate you are paying (and this covers a lot of you out there) then you may have made a very big mistake.

Before you empower yourself by comparing credit cards at http://www.justmoney.co.za/credit_card.aspx you need to determine how you will be using your credit card. The salient question is ‘Do you pay it off in full at the end of every month?’

Are you a person who won’t always pay off you balance at the end of every month?

There is card out there that will only charge you 19% interest pa, will not charge you a monthly card fee and will even pay you 8% interest pa on positive balances. And this isn’t even the only option for you. There are a handful of other credit cards that will also give you similarly great rates – as opposed to the vast majority of credit cards out there.

What does this mean? Well it means that it’s time for the South African consumer to start taking power and not just settle for second best. When it comes to debt we often have a tendency of trying to dismiss the consequences from our mind and focus on something more uplifting – but that is really no way to go about getting into debt. You need to do it on the best terms possible and you need to know what you are getting yourself into. A staggeringly large number of people have no idea what interest they are paying on their credit card and this is why that monthly payment figure comes as such a shock.

Are you a person who pays your credit card balance in full every month?

In this case the debit interest rate won’t matter to you – but that is not to say that you don’t need to think about which card you get. It is true that if you pay your debt in full each month before any interest builds up then the interest rate doesn’t really matter, but in this case you need to make sure you’re getting the benefits you are due. Some credit cards don’t have reward schemes, and there are others that will give you air-miles and discounts and free travel insurance and plenty more in between for every Rand you spend on your card.

As Christmas approaches and brings with it that desire to spend, don’t just bury your head in the sand and hope for the best but rather take control, get informed and get a better deal so that you won’t be feeling that New Year burn in your pocket.

Compare credit cards by clicking http://www.justmoney.co.za/credit_card.aspx.

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