Ricochet News

Getting the most benefit from your credit card

Oct 24, 2017
Getting the most benefit from your credit card

Most people use credit cards for their convenience but take for granted some of the cards’ other benefits. When it comes to security, emergencies, efficiency, budgeting and other areas, they’re hard to beat.

African Bank’s Group Executive: Sales, Branch Network, Mellony Ramalho says if used responsibly, credit cards can have great benefits and provide a highly convenient and safe way of managing your money. Take a closer look at some of the benefits you may not even have been aware of:

Security

Credit cards are far safer than carrying cash or using cheques or money orders. Carrying cash is risky because once it has been lost or stolen it cannot be cancelled or recouped.

  • If someone fraudulently uses your card, call the number on your statement or the back of your card immediately. In most cases, you won’t be held responsible for any charges if your card or account number has been stolen.
  • Your credit card issuer probably offers optional security alerts. Sign up to be automatically notified of any unusual activity on your account.
  • Lost cash can’t be replaced. Most credit cards can be reissued in a short period with no loss to you. Credit cards essentially limit losses from fraud because of the cancellation function.
  • Unlike cheques or cash, some credit cards have a variety of built-in security features, including chip card technology.

Safe to travel with

Credit cards normally work in most countries and allows you to pay in most currencies. When you are travelling you don’t need to travel with cash and traveller's cheques. Simply notify your bank of the period and countries of travel. You can simply use your credit card and the transaction will factor in the exchange costs with ease. It is best you contact your bank to test your card before departing to avoid any potential problems with the card.

Protection

Some credit card issuers (Banks) provide a number of protection features such as purchase protection for defective goods, car rental insurance, travel insurance and other perks. Check with your bank to see what is available.

Credit history

One of the main advantages of using a credit card is that it can positively affect your credit score when you use it responsibly or be a great way to rebuild on a bad credit record. Regular use and prompt full payment of your balance / account is one of the better ways to build a solid credit history. This also lets creditors know that you can be trusted to lend to.

Potential savings

While it might seem counterintuitive to think that credit cards could save you money, there are advantages to using them, including:

  • The better your credit history, the cheaper it is to borrow money. When paying off a bond or student or vehicle loan over long periods of time, those savings could add up to thousands of Rands.
  • Depending on your card, you can earn a variety of rewards such as cash back, airline miles and discounts.
  • Point of Sale (POS) transactions are usually free of charge.

Emergencies

Credit cards can be helpful in case of emergency. Not only can they help if you’re in a tricky situation without cash, but many offer helpful features such as roadside assistance or travel insurance.

Interest free credit

Credit cards offer a grace period of interest-free credit. The time frame and options may vary from bank to bank, however, this offers the opportunity to make big ticket purchases when you are cash strapped.

Cheaper withdrawals

Did you know it is cheaper to draw cash from participating retailers that offer cash back at their POS than out of an ATM using your credit card or withdrawing from a bank teller?

“Ultimately, if you’re thinking about getting a credit card it’s important to understand how it can be beneficial. Not only can it be a great source of funds in an emergency but overall a credit card is enormously convenient in your everyday life. Whether you are paying for flights or simply paying for a meal, gone are the days of needing to carry cash if you have a credit card. Just make sure you keep a record of your spending to avoid over spending and always keep your receipts in case of any discrepancies,” concludes Ramalho.