Most credit cards will charge no interest if you pay back everything you have borrowed on the due date, usually monthly. This means you have borrowed money free for a month. However, if you spend more than you can afford to pay back, that is when interest charges kick in and you can soon find the amount you owe growing fast.


Why would I risk having a credit card?


If you think you might be at risk of spending more than you can really afford, you might feel happier sticking with a debit card. It offers the same ease of payment, after all. However, if it’s the right decision for you, credit cards can offer: • Better consumer protection, particularly for online


purchasing, as the money does not come directly from your account and most credit card companies offer great levels of fraud protection. Some also offer warranty and purchase protection on items you’ve bought with the card.


• The opportunity to start building your credit history. If you might want to apply for


When you take money from your purse or pocket and wait for change, you have no doubt you are spending your money. When you just wave a plastic card across a machine it is all too easy to forget it is still your money.


Money spent on a credit card is like a loan you will have to pay back. Used wisely, a credit card buys you a few weeks between when you buy something and when you have to pay for it. Used carelessly, a


Things to think about credit card be a quick way to


find you owe more money than you can afford.


Read the details on any credit card applications you are considering to understand what the commitment and expectation is. There are many independent comparison websites around than can also help you to compare different credit card companies, to help decide which is right for you.


Many credit cards have additional fees if you withdraw cash or you want to use them abroad, so check before you travel. Although having an internationally recognised credit card can be a real bonus for foreign travel, do make sure you know before you set off how much it might cost you.


Consider setting up alerts to notify you of payment due dates or when you’re getting close to your credit limit. These can help you stay on top of your spending and stay out of debt.


Make The Future Yours! Issue 3 15


a mortgage or loan one day, demonstrating a healthy credit history by taking out a credit card and paying on-time can help demonstrate in future that you are a good risk for future companies.


• Depending on the card, they may also offer other benefits, like free or cheaper travel insurance or collision waivers when renting a car on the card. Do check the small print for details and any conditions.


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