A few weeks back I shared some exciting news for our family as part of the #NedbankBucketList campaign… later this year we’re heading off our first international holiday!
I mentioned that we bought our tickets with the help of a credit card, but there are some very NB things to note about using credit cards to fund your travels and lifestyle…
Used responsibly, a credit card can be a very helpful financial tool, but, if your credit spending gets out of control, monthly payments and accumulated interest can become a nightmare (and result in very little sleep!).
I thought I’d share a few tips on how to manage a credit card properly – esp as this is a time of the year when everyone needs to reach for theirs a bit more frequently!
Credit Card Management Tips
Use the card for needs.
Credit cards are very useful in emergency situations, such as a bill that’s due before your next payday. Use the credit card as a temporary loan to yourself, and then pay back the amount as soon as you can to decrease or avoid interest charges altogether.
Live within your means.
The number one rule of successful personal finance is to make sure that you can afford what you buy – even when you buy it on credit!
Track your spending.
Keep track of where you spend your money. This way, you will be less likely to overspend or exceed your credit limit.
Monitor your accounts.
Reconcile your statements regularly to make sure your records match. If you are keeping an eye on your accounts you will also be able to pick up any fraudulent transactions sooner. Make sure everything on your credit card statement is for things you bought and query anything you don’t recognise. Keeping your credit card receipts means you can match things up, too.
Have a plan.
Credit cards can be great money management and budgeting tools. Making most of your payments with a credit or cheque card is an easy way to keep track of all your spending especially if you can access a detailed breakdown of all your card transactions for the month. Check it on a particular day – say a week before the payment’s due – so you get in the habit of making sure everything is in order and that you pay it on time. You can also use this to work out what you’re spending most of your money on, and to help plan your future spending.
Avoid going over your limit.
If you go over your credit limit you will be charged, plus it will also have knock on effect on your credit rating. Rather contact your credit card provider to request an increased credit limit if you think you need to put more on your credit card – and only do so if you’re sure you can comfortably afford to repay the higher amount – and won’t be tempted to over-spend and rack up more debt.
Pay the full outstanding amount on your credit card each month.
The easiest way to achieve this is to set up an automated payment. If you are disciplined with the use of your credit card, this is the cheapest way to pay for goods and services as there are no transaction fees and no interest. This will ensure that you avoid the late payment fees and establish an excellent credit record with your bank.
Pay at least the minimum monthly repayments
This will save on your interest charges, but paying just this amount will cost you a lot in the long run. You could be making repayments for years and end up paying more in interest than the original debt. Remember, if you don’t pay off the whole bill you’re likely to be charged interest on everything on the card, including new things you bought that month. So if you keep spending on that card you’ll end up paying even more.
Pay any extra funds you have available into the card
This will reduce the capital and lower the interest charges.
Avoid late payments.
Even if the minimum payment is all you can afford, make a payment! The most important factor in your credit score is your payment history. If you miss payments, or are habitually late, that will be reflected in your score and can mean you end up paying higher fees or have a lower credit score and higher interest rates when you apply for loans in the future. Try to not leave your credit card payment to the last minute as if you miss a due date, you could be charged a late payment fee. If you get into financial difficulties contact your bank immediately and make a repayment arrangement.
Avoid drawing cash on your credit card
Credit cards aren’t like debit cards – you can’t withdraw cash for free. You’ll pay fees and higher interest than normal, even if you pay off your card in full at the end of the month.
Keep your debt level low.
While you do need to borrow money for things such as a home, a car or an education, it is important to borrow only what you need.
One way to keep your credit score healthy is to keep your credit utilization ratio under 30%. Also to ensure your debt level is healthy aim to keep your total debt repayments at no more than 30% of your monthly income.
Use a rewards card.
If you’re using a credit card for most of your purchases, it makes sense to use a card that offers rewards. Not only can you avoid paying interest, but you’ll also earn rewards such as cash, airline miles or retail points. There are often many hidden perks which you may not know about on your credit card which can help you save towards a Bucket List item or holiday. Used correctly, your credit card can be used as a financial tool to unlock the lifestyle you’ve always dreamed of.
Nedbank credit cards offer a vast array of rewards that go far beyond Greenbacks and include various travel benefits, retail, savings and investments.
“Managed correctly, a credit card effectively gives you access to a cost effective short-term loan. If you repay the full amount owed on your Nedbank card within 50 days, it’s totally interest free,” Chris Wood
In addition to the obvious safety benefit of not having to carry cash, Nedbank credit cards add a further layer of security to the shopping experience through a comprehensive purchase protection benefit. “Purchase protection is immediately applied to any buying transaction on a Nedbank card,” Wood explains, “which allows cardholders to make a claim for the reimbursement of eligible spend on items that get damaged, broken or stolen within a specified time after they were bought.”
Recently Nedbank extended many of these credit card perks to their customers using cheque cards which is amazing news for those looking to manage their credit card spending. Now you can tap into all the perks of a credit card without the risk!
Here are a few of the Nedbank Cheque Card Benefits that customers can tap into…
Nedbank Cheque Card Benefits
- Nedbank cardholders also have access to the scan to pay function on the NedbankMoney™ App. The scan to pay function makes it possible for anyone who has the NedbankMoney™ App installed and activated on their mobile phone or tablet to use the app to transact with any physical or online vendors who offer MasterPass, Snapscan. Pay@ or Zapper Quick Response (QR) codes as a payment option, and while using the scan to pay functionality doesn’t require a physical card to be swiped or tapped, users still qualify for all the Nedbank rewards that would typically accrue to them as cardholders.
- The Nedbank Affinity cheque cards enable clients to support causes close to their hearts, at no cost to themselves, through their everyday purchases. Nedbank clients can link their cheque and credit cards to one of the bank’s four Affinity programmes, namely the Children’s Affinity, Green Affinity, Sport Affinity and Arts Affinity. This means that every time you transact, you will also be supporting vital community development programme.
- The Cheque cards can be linked to Nedbank’s Greenbacks rewards programme, enabling clients to earn rewards to put towards online shopping and entertainment, paying for utilities or airtime, donating to charities or even saving on bank charges. And American Express cardholders earn up to four times more Greenback Rewards points for a wide range of card transactions. Greenbacks are automatically loaded onto your free Greenbacks SHOP Card that can be used to: pay at over 100 000 stores; draw cash at ATMs; pay for fuel; purchase online; and make purchases abroad. Plus they have no tiers and no expiration date.
- Through the cheque card, clients can access various discounts and offers negotiated with Nedbank partners; including travel offers that can be accessed via www.NedbankTravelOffers.co.za
- Nedbank Platinum cheque cards offer basic travel insurance up to R500 000 on local flights and up to R3 million on international flights booked using the card. Gold cheque cards offer up to R250 000 on local flights and up to R1 million on international flights.
- Access to local Bidvest Airport lounges is offered on all platinum cards, limited to 8 visits on some platinum cards. PRB platinum cards however, offer unlimited visits at local Bidvest lounges and limited to 10 visits to international lounges.
- Automatic traffic insurance with the option to top-up
- Contactless cards – simply tap and go when you make payments.
- Free travel insurance for those who book airline tickets using a Nedbank credit or cheque card.
- Nedbank’s recently launched SAA Voyager Cheque Card is the first cheque card in the world that allows users to earn air miles which can be used for flights or exchanged for a wide variety of travel rewards, including stays at selected accommodation partners, car hire, exotic cruises, duty-free shopping, online gifting, and even health spa experiences. There are many opportunities to earn bonus miles including 2 500 miles on signing up to the programme, double miles on eligible spend for the first month after the account has been opened, bonus miles when reaching spend thresholds, and additional miles when paying for an SAA flight with your SAA Voyager Card.
- SAA Voyager Premium cardholders enjoy preferential check-in and lounge access when flying on SAA-operated flights or SAA marketing flights where Mango is the carrier.
- Qualifying gold or premium cardholders get one companion airline ticket per year to a local or global destinations, depending on their card status and spend threshold.
Nedbank has simplified the card application process as well. You can apply online for your SAA Voyager Card or at any Nedbank branch. The SAA Voyager Cheque Card can also be added to select Nedbank transactional accounts and is available to existing and new clients.
The reality is that the way we choose to manage our money can affect our lifestyle and a well-managed credit or cheque card is a great way to fund extraordinary experiences, like our once-in-a-lifetime international family holiday! The key is to ensure you keep on top of your debt and that you manage it, rather than it managing you – now that’s something to celebrate!
The #NedbankBucketList campaign is giving YOU the opportunity make your dream experiences come true with an exciting competition.
Six Nedbank cardholders will win their own once-in-a-lifetime #NedbankBucketList experience to the value of R50 000.
To put yourself in line to win an unforgettable #NedbankBucketList experience you need to own, or take out, a Nedbank cheque or credit card and use it at least five times per month to pay for the everyday things or experiences you want.