When not to use your credit card

A credit card is a good for emergencies and it can get you out of a lot of trouble when you need to pay something you do not have the immediate cash for but many of us do not know which purchases are okay to make on our credit cards.

Here are some tips what not to use your credit card for.

• Do not use your credit card to cover your shortfall in monthly debt commitments or living expenses - you will never repay the debt.
• Do not have multiple credit cards - it increases your debt exposure.
• Do not use your credit card for purchases you have not budgeted for - add up to 26% interest to every purchase: for every R100 purchase you are charged R26.00 interest.
• Do not use your credit card to purchase gifts or "splurge" items - use retail accounts that have 6 months interest free plans.
• Do not increase your credit facility automatically - unless your income has increased to cover the repayment.
• Do not use your credit card as a current account. Certain banks have current account packages which covers swiping and electronic transactions - these are not applicable to credit cards.
• Do not use your credit card for monthly transactions, unless you're able to settle the balance within 55 days. Certain banks have a 55 day interest free period if the balance is settled in full within 55 days. 
• Do not use your credit card to consolidate debt. Certain financial institutions have debt consolidation loans at lower interest rates.
• Do not use your credit card to finance study loans for students. Certain financial institutions offer Study Loans at discounted rates.
• Do not use your credit card to finance items you could have saved for - sometimes ‘Cash is King'.