Smart ways to use your credit card

How to make your credit card work for you

Credit cards are a convenient way to pay for the things you want, but this convenience can come at a cost.  Avoid costly fees and interest by following our tips.

Keep track of your spending

It can be very easy to rack up more debt on your card than you can afford to repay, so it's important to stay in control.

The best way to do this is to keep track of your spending. Use our TrackMySPEND app to help manage your expenses, and make sure you regularly check your credit card statement.

Pay your credit 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.

Video: Effie Zahos explains the best way to use your credit card

Effie Zahos explains the best way to use your credit card video

In this video Effie Zahos discusses the best way to use your credit card.

Maximise your credit card repayments

If you only make the minimum repayments on your card each month, you'll pay a lot of interest and it could take years to pay off your credit card debt.

Use our credit card calculator to work out out the fastest way to pay off your credit card.

Credit card calculator

If you're struggling to pay more than the minimum monthly repayment, consider switching to a card with a lower interest rate, and pay off more when you can. Find out more about credit card balance transfers.

Video: Take control of your money with the credit card calculator

Video about credit card calculator

Work out how much time and money you'll save by making higher repayments on your credit card using our credit card calculator.

Transcript: Take control of your money with the credit card calculator

Set a sensible credit limit

Your credit limit should be an amount you know you can repay, and one that won't tempt you to spend more than you can afford.

Smart tip

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.

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 ask your card issuer for an increase to your credit limit at any time, even if you decide to opt out of receiving offers of more credit.

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 meet

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 debt.

Our page 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 card.

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, see a financial counsellor who can help you sort out your debt issues and 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 earn rewards 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 any potential savings you might earn won't be eaten away by fees and charges.

Check your credit card statement

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 there are any transactions 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 properly

There's 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 way.

Take charge of your credit card and make sure you only pay for expenses you have authorised.


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Last updated: 26 Oct 2017