But they can become a liability if you’re constantly using them to plug holes in your budget or buying things you can’t afford or don’t need.
Smart: Have one, simple credit card with a reasonable interest rate and low credit limit and only use it when you need to.
Not-so smart: Using a high interest credit card with a big limit to supplement your income or buy things you can’t afford in the hope you’ll soon be able to.
Smart: Pay your credit card in full each month within the interest free period.
Not-so smart: When you max out one credit card, ask for another one and max it out too. Or ask for a higher credit limit and spend right up to the limit.
Smart: If you’re paying off a large sum, pay more than the minimum repayments each month. Set up an automatic payment so your credit card gets paid without you having to think about it. ASIC’s (Australian Securities and Investment Commission) credit card calculator helps you work out the fastest way to pay off your debt.
Not-so smart: Only pay the minimum monthly amount. This exponentially increases the length of time it will take to pay off your card and the amount you’re paying off.
Smart: If you have more than one card, pay off the card first with the smallest balance or highest interest rate. If you need help managing your debt, contact your credit card provider straight away and ask for help.
Not-so smart: If you run into trouble with your credit card, do nothing and tell nobody.
Smart: Check your credit card balance each month to make sure you’re the only one using your card. Check for charges to companies you don’t recognise, large or unusual charges, duplicate charges or changes in direct debits you haven’t authorised.
Not-so smart: Assume credit card scams won’t happen to you, and people never make mistakes when charging your credit card.
A credit card can give you the freedom and flexibility to pay in different ways in all kinds of places. Using it carelessly can land you in financial hot water and cost you lots of money and time to pay back.
Keeping things simple can help, which is why the Bluey Visa Credit card comes with no annual fee, a low interest rate, 55 days interest free and a 0% 12-month balance transfer offer.
Talk credit cards with QBANK. Call 13 77 28.
No-one is immune from being scammed. You can’t always avoid being targeted by scammers who want to separate you from your money, but you can protect yourself by learning about scams, how they work, and what to do if it happens to you.
The Australian Government Guarantee, also known as the Financial Claims Scheme (FCS), provides protection for funds deposited in eligible financial institutions up to a limit of $250,000 for each account holder.
Following the decision by the Reserve Bank to reduce the official cash rate, QBANK will reduce interest rates on its variable rate home loan products for owner occupiers and investors by 0.15% per annum. Mortgage secured overdraft rates will also be reduced by 0.15% per annum.