Smart ways to use your credit card
How to make your credit card work
better for you
Here are tips to avoid costly fees and interest, and make the
most of your credit card.
Keep track of your spending
Credit cards are a convenient way to pay for the things you
want, but this convenience can come at a cost. It can be very easy
to rack up more debt on your card than you expect or are
comfortable with, so it's important to stay in control.
The best way to do this is to keep track of your spending. Use
app to help manage your expenses, and make sure you regularly
check your credit card statement.
Pay your card on time
When you get your credit card statement, check the date the
payment is due, and make sure you pay on time. This will help you
avoid extra interest charges or hefty late payment fees.
To make it easier to pay on time, consider setting up a direct
debit to pay a fixed amount off the balance owing each payday. Just
make sure these payments cover at least the minimum monthly payment
due on the card.
If you only make the minimum repayments on your card each month,
you will pay a lot of interest and it could take you a long time to
pay off your balance.
Why not make a plan to get rid of your credit card debt and pay
more than the minimum repayment each month.
Use our credit card calculator to work out the fastest way you
can pay off your credit card
Credit card calculator
If you're struggling to pay more than the minimum monthly
repayment on your credit card, consider switching to a card with a
lower interest rate, and pay off more when you can. Find out more
about credit card balance
Set a sensible credit limit
If you can't afford to pay off your balance each month,
don't increase your credit limit. A higher credit limit makes it
too easy to get into more debt.
Your credit limit is not a licence to
spend money. It should be an amount you know you can repay, and one
that won't tempt you to spend more than you can afford.
Reducing your credit limit
If you want to avoid the temptation to overspend on your card,
ask your credit provider to reduce your credit limit. You can do
this by phone or by visiting a branch. In most cases, your account
will be updated within 1-2 business days.
Invitations to increase your credit limit
Credit card issuers are not allowed to send you invitations to
increase your credit limit without first getting your agreement.
This applies to both new and existing credit cards. You can change
your mind at any time by contacting your card issuer and asking
them to stop sending you these offers.
Whether you decide to opt in or out of receiving offers of more
credit, you can ask your card issuer for an increase to your credit
limit at any time.
If you need to increase the limit to make a special purchase,
aim to pay the debt down quickly, then lower your limit back to a
more manageable amount.
Don't use credit to make ends
If an unexpected emergency happens, or if you're just running
low on cash before payday, using credit or taking a cash advance is
not going to work for you in the long run. It might get you through
the immediate crisis but, over time, you'll end up even more
Our webpage on building an emergency fund
has tips to help you build up a savings buffer that will see you
through life's rainy days so you don't have to rely on your credit
We also have lots of guidance to help you if you're having
problems paying debts or dealing with these types of bills:
To get free and confidential debt help, you should see a financial
counsellor who can sort out your debt issues and help you
reduce your reliance on credit cards.
Use store cards wisely
It can be tempting to get a store card if you shop regularly at
a particular retailer. Purchases paid for with these cards might
points or give you access to discounts or other exclusive
offers. But think twice before you sign up for store cards, as
there are often fees attached (like annual and service fees), and
the interest rate might be higher than other cards.
Check the terms and conditions carefully to make sure that any
potential savings you might earn won't be eaten away by fees and
Check your credit card
The best way to check your monthly statement is to keep all of
your credit card receipts each month, then tick them off against
the charges on your statement. This will help you check that you
have been charged the right amount for the things you bought, and
that you have not been charged for anything you did not buy.
Even if you don't keep your receipts, here are some things you
should look for when checking your credit card statement:
- Charges by companies you do not recognise
- Large or unusual charges
- Changes in direct debit amounts
- Duplicate charges
If any transactions are listed that you didn't make, contact
your credit card provider immediately, as they may be able to
reverse the transaction. See unauthorised and
mistaken transactions for more details.
Close your credit card
There is more to closing a credit card account than just cutting
up the card. Visit our how to cancel a credit card
webpage to find out how to close your credit card account the right
Take charge of your credit card and make
sure you only pay for expenses you have
Last updated: 20 Jun 2017