Bank Better, Live Better

The Credit Boot Camp part 8: How to get the best out of your credit card

Credit cards can play an important part in your financial wellness. Here’s how to get the most out of yours.

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It’s possible to have a healthy relationship with your credit card. It can help you build your credit record and gives you access to funds, which is particularly helpful when you face unforeseen expenses.

Getting the most out of your credit card

Here are 4 tips to get the most out of your credit card.

Stay within 30% of your credit card limit

“The biggest mistake people make with their credit card is maxing it out all the time,” says Financial Fitness Bunny, Nicolette Mashile. “Don’t do it! Many people don’t manage their money and then they blame their overspending on the card.” If you regularly max out your card, future creditors will see this as distressed borrowing, which means you’re living beyond your means and actually can’t afford credit.

Plus, the amount of debt you have compared to what you earn also affects your credit score. If it’s high compared to your income, your score will be lower, which is not a good thing.

Use it as a safe and affordable travel companion

It’s much safer than paying and travelling with cash. It can also save you money. Capitec clients, for example, are charged no currency conversion fees when selecting to pay in the local currency, which can save them thousands of Rands during a single trip. Capitec clients also have the international benefit of with zero fees worldwide at Mastercard® card machines.

Use the benefits

Credit cards come with benefits, for instance free basic travel insurance while you’re travelling abroad.

Aim to pay on time and in full to have a good credit record

Make it a habit to pay your credit card in full every month. Although you do have 55 days before you start paying interest, it’s not a good idea to get behind on payments. In addition, if you regularly default on payments this can be recorded on your credit profile and you’ll have to pay more interest and could incur penalty fees. “Paying more than the minimum amount reduces your outstanding balances quicker, which helps keep the cost of credit down, because you pay less on interest and costs over the shorter period,” says financial journalist Maya Fisher-French. “If you can pay it off sooner, do it.”

If you’re struggling to pay on time, contact your bank before payments are due to make an alternative arrangement.

Know the difference between straight and budget

When you use your credit card to buy something, you have the choice between straight or budget. Straight means you need to make a minimum monthly repayment of 5% on the outstanding balance, and you’ll have 55 days where you won’t pay interest. Budget, on the other hand, allows you to repay purchases over a longer term, often up to 48 months. Remember though, you will pay more interest so it’s best to use the straight facility.

Fast facts: Capitec credit cards

  • You can earn interest! If you have a positive balance on your credit card, you earn 2.5% in interest per year 
  • You have a built-in grace period. Our credit card offers a 55 days interest free period
  • You get personalised credit. You’ll receive personalised credit and interest rates (from prime) based on your profile and affordability 
  • You save money. You’ll pay no fees worldwide when you swipe your Capitec card on Mastercard machines, or when you make online payments
  • You can track your spend. You can manage your credit and track what you’re spending with your credit card on the Capitec banking app

Examples of times when using your credit card is good credit

A credit card is a good safety net to have in case of an emergency. You can use it for: 

How to get the best out of your credit card

How to apply for a Capitec credit card

Simply visit a Capitec branch with the following documents to apply for a credit card:

  • Your ID document (you must be 18 years or older). If you’re married and your surname is no longer the same as on your ID, you’ll need to bring your marriage certificate along
  • Your most recent salary slip
  • A stamped bank statement that shows your latest 3 salary deposits

Save time and try our online estimate to see what you qualify for before going to a branch.

Get a Capitec credit card

You can use your credit card to book your next Airbnb stay, catch an Uber, shop online and be prepared for emergencies. Apply today.

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