Be smart with your credit card

Credit cards have so many variations that it is important to get one that is suited to your needs. In particular you need to get one that will fit your spending and repayment habits. If you don’t the card company will grab your cash in terms of interest or charges.

The best use of a credit card is as a way to delay payment. If you do end up paying interest, then you should shop around – even change card – to get the best deal, i.e. the lowest interest rate. You can even have more than one card and use them for different purposes.

If you are regular spender, but will always clear your balance in full every month, then you are not interested in the interest charged for outstanding debt on the card – because you will never have to pay it – that is, unless the card has no interest-free period at all.

That’s very unlikely because most credit cards only ask you to pay what you’ve spent by the due date on the statement, with no interest added until after that date. You can therefore get up to 59 days interest-free if you spend on exactly the right day.

If you pay up in full every month, you should look for a card that has no annual fee and gives you something back – such as cash back or a reward scheme. These come dressed up differently, so it will depend where, when and what you want from your rewards as to what scheme you go for.

A sure way to make certain you always pay your outstanding balance in time is to set up a direct debit for the full amount each month.

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