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How to use your credit card sensibly

Credit cards can be very convenient and there can be perks to using your cards, from getting points for purchases or getting purchase protection or travel insurance when you pay with your card.

You can also use credit cards to manage your spending but they can become a costly burden if not used sensibly. Here are some tips on getting your credit cards to work for you.

How to make credit cards work for you

  • Credit cards are only cheap if you pay off your balance in full every month.
  • Avoid having too many cards. With many credit card companies offering free cards it is tempting to apply for lots of cards. Not only can this become difficult to manage, having too much available credit may affect the decision of a lender to approve a larger loan for a house or car.
  • Don't use your card for cash advances. This is an expensive way of using your card as often you will be charged a fee for cash withdrawals, and interest can be calculated from the date of withdrawal, rather than at the end of the month.
  • Before you use your card overseas check with your provider on charges for overseas transactions, these can be costly and some cards offer better deals than others.

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