A well-chosen and responsibly managed credit card can be a strong financial ally, especially in difficult times.
A credit card isn’t just there to get you into debt. If used smartly, it can make your finances easier to manage.
In recent years, high inflation and rising interest rates have made financial management a tightrope walk for many South Africans and these challenging economic conditions can understandably make you more cautious when applying for credit, says Privesan Naidoo, director of Trading Product (card and payments) at Nedbank, says.
“In addition to its role as a payment method, the right credit card can be a powerful tool for personal cash flow management and expense tracking, and even a source of valuable rewards. If you use it wisely, it can really help you navigate turbulent economic times more effectively and make the most of your finances.”
Naidoo says the key to getting the most out of any credit card is to understand your card’s features and use them to your advantage. That way, you can turn everyday transactions into opportunities for savings and rewards.
“In challenging times, it is these smart money choices that can make a real difference to your personal financial wellbeing and ensure your credit card is a powerful tool in your financial toolbox.”
Naidoo’s tips for unlocking your card’s full potential include using card rewards and using it as a budgeting tool.
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Choose a credit card with the best rewards
Make sure your card delivers the best rewards possible, he says. “Choose a credit card that offers rewards tailored to your spending habits and use it strategically to maximize these benefits. The key is to choose a card that offers the most valuable rewards in the least complicated way.
“Then use that card to pay for as many of your expenses as possible, paying the balance in full each month. This way you earn the maximum reward without paying interest.”
Track expenses for your budget
Use your card as expense tracking and budgeting tool. Naidoo says credit cards can be powerful allies in tracking your spending, offering detailed views that categorize your expenses, which can then help you analyze and adjust your monthly budget.
“Using your credit card for most purchases creates a clear transaction trail. When you can instantly access this information through your bank’s digital platform, you can easily monitor your spending patterns and identify areas where you may be overspending.”
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Lowest costs and interest
Look for the best interest rates and low fees. Naidoo emphasizes that in a high interest rate environment, finding a credit card with competitive prime rates is crucial.
“The interest rate on your card can make a significant difference in how much you end up paying, especially if you have a balance that lasts longer than the interest-free period. that’s why it’s worth looking for a card that offers a great price.”
Use your map to travel
Naidoo says you should make your card the ultimate travel companion, as most credit cards offer valuable benefits beyond convenient cash purchases. Many cards come with a range of travel and lifestyle benefits that can save you money and enhance your experiences.
“When choosing a credit card, look beyond just the interest rates and fees and consider the additional benefits such as travel insurance and discounts on flights and accommodation, which can add up to significant savings on your travel costs, making your trip more affordable and liberating . raise money to spend on tourist activities.”
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