Credit cards have long been a topic of debate among financial experts and consumers alike. While some argue that credit cards are a convenient way to make purchases and earn rewards, others contend that they can lead to financial ruin.
So, let’s settle the question once and for all; are credit cards bad?
The answer is no, as long as you use them responsibly.
Benefits of Credit Cards
One of the main benefits of credit cards is the rewards they offer. Many credit card companies offer reward programs, such as EBucks or cashback, that allow you to earn points or cash for every purchase you make. These rewards can then be redeemed for various goods and services, such as travel or merchandise.
This can be a great way to stretch your budget further, especially if you’re making purchases you would have made anyway.
Another benefit of credit cards is the convenience they offer. With a credit card, you can make purchases online, over the phone, or in-store without having to carry around large amounts of cash. This can be particularly helpful in emergencies when you need to make a large purchase quickly.
The Importance of Responsible Credit Card Use
While credit cards can be beneficial, it’s essential to use them responsibly. One of the biggest dangers of credit cards is the high-interest rates they often come with. If you carry a balance on your credit card, you could end up paying a significant amount of interest each month, which can quickly add up.
To avoid this, it’s crucial to pay off your credit card balance in full each month. This not only helps you avoid interest charges but can also improve your credit score. Your credit score is a measure of your creditworthiness, and by consistently paying off your credit card balance, you demonstrate that you are a responsible borrower.
Top Credit Cards in South Africa
If you are interested in getting a credit card in South Africa, there are several options to choose from. Here are some of the top ones to consider:
Standard Bank Gold Credit Card
A variety of value-added services are available together with a low-interest rate on the Standard Bank Gold Credit Card. The card has an R165 startup cost and an R40 monthly fee. It offers free travel insurance, loyalty points for every R1 spent, and access to special deals on food and entertainment.
ABSA Gold Credit Card
You can benefit from a reasonable monthly charge of R23 and a good interest rate with the ABSA Gold Credit Card. Every R1 spent on this card earns you one reward point. It also grants you access to exclusive discounts and incentives. You also get free basic cell phone insurance and travel insurance from ABSA.
FNB Premier Credit Card
With an R85 monthly charge and a reasonable interest rate, the FNB Premier Credit Card is a great option. For every R1 spent, cardholders receive eBucks, which may be redeemed at several stores or put toward petrol purchases. Additionally, this card offers free comprehensive international travel insurance as well as access to exclusive lifestyle benefits like reduced airfare and rental car rates.
Discovery Bank Gold Credit Card
With its distinctive rewards program, the Discovery Bank Gold Credit Card promotes healthy living. Cardholders can earn Discovery Miles, which can be exchanged for cash, travel reservations, or gift cards, for every R1 spent with a competitive interest rate and a monthly fee of R60. Additionally, this card provides free comprehensive travel insurance, access to exclusive savings, and cashback on purchases of healthy food and gym memberships.
Credit cards can be a useful tool for managing your finances and earning rewards. However, it’s essential to use them responsibly to avoid falling into debt. By paying off your balance in full each month and choosing a credit card with benefits that suit your lifestyle, you can enjoy the perks of a credit card without putting your financial health at risk.