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7 routines every effective credit card user should practice

Published on December 2nd, 2020
  Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
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Credit cards can be a useful tool to manage your financial matters, but if you are undisciplined, they can hurt your credit rating and your plans to get finance in the future. Yet, there are some tips you can follow, not only to avoid getting in debt, but also to really benefit from your credit card spending.

The credit card debit in Australia stands at $32 billion with third of Australians are spending more than they earn each month. Fortunately, there are some habits you can follow to help you manage your debt better.

Be responsible

To get the most from your card, paying early and often, thereby you will avoid payment penalties and interest charges. In addition, some cards offer a window period, whereby you can avoid interest changes for a certain period. For those that are absentminded, rather set up a debit order, which will automatically transfer funds to cover your credit card debt.

Be smart

Smart credit card users know how to take advantage of the system, by getting rewards to cover interest charges and ensuring their balance is well managed.

Be organised

With most transactions between $50 and $500, your balance can slowly move into the red. So be careful and stick to your budget. If you practice some restraint, it will soon become second nature.

Be focused

Open your statement once it arrives and read it to see if all the charges are legit. Any errors or odd charges should be reported immediately. More so, keep a track on your spending. To do that, you can use money management tools that are available online or on some apps.

Be strict

Another trick is to be aware of your personal limit and to respect that. For instance, if your limit is $30000, then that is frivolous, and it does not mean you need to spend that amount, particularly if you know your personal limit is much less. In fact, to keep your credit score healthy, you should spend less than 30% of the limit on the credit card. Which means the lower your balance, the higher your score. To help you know what your credit score is, you can get a copy of your credit report from a credit reporting body, for free once a year.

Be realistic

Prep for unknown emergencies like a repair on your car, by having enough surplus funds available on your credit card to cover these type of expenses. Also, if you are using the grace period to cover the emergency, to avid interest charges make sure you will have enough money to pay it back before the period ends.

Be aware

Remember that once you get a credit card it’s not for life. Many things can change and there are always cards offering better benefits. For instance, to keep yourself updated about new deals you can use a comparison website like ours to give you a breakdown of the different credit card options available.

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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.

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