When you manage your credit card and overdraft well, it gives you spending power to make bigger purchases and pay for them later. We all need credit at some stage in our lives, so here are seven reasons why it's good to have credit and how you can use it to your advantage.
The key to managing your credit is to be responsible when borrowing money. If you are not saving regularly and spending more than you earn, you may overspend your credit. There's value in having credit and a positive credit history.
Why it's good to have some form of credit
- When you have a credit card, you can buy the things you need now and pay for them later or over an agreed term.
- Having credit means that you can build up a good credit history. By paying your credit card regularly, on time, and settling your accounts as agreed, you can build up a good credit score and increase your credit limit when you need to.
- When you have credit, it's easier to get credit. Banks and lenders are more likely to approve credit applications, and you may spend less time waiting to hear the results of your application. Remember to only get the credit you need and always consider what you can afford.
- Having a credit card means that you always have access to money up to your allocated credit limit. Any payment you make into the account gives you access to more credit that you can use for necessities, emergencies, or things where a credit card is more secure or necessary. For example, when booking flights and accommodation.
- Your future credit depends on the credit you have and need to repay now. The way you manage your credit can decide whether or not you can apply for more credit.
- Managing your credit well means that you could get better interest rates on credit. The better you manage your debt, the more likely you will save on the interest that gets added to the terms of your repayment. When you manage your money well, you get personalised interest rates with Discovery Bank and pay up to 6.75% less on your borrowing rate through Dynamic Interest Rates.
- It helps to create a picture of your financial wellness. Some employers, landlords and insurance companies may check your credit history as part of your employment, rental contracts, or cover. Having credit and a good credit history makes their decisions about any risk easier. When your credit history is good, it shows that you can manage finances and meet your commitments.
Discovery Bank makes managing your credit easy. With the single credit facility, you get one credit agreement for both the overdraft on your transaction account and for your credit card account. This means you only have to make one payment on the minimum amount due for both accounts.
This article is meant only as information and should not be taken as financial advice. For tailored financial advice, please contact your financial adviser.
Are you looking for a state-of-the art credit card that comes with up to 55 days interest-free transactions for selected credit card transactions, as well as built-in full transactional capabilities, such as third-party debit orders, making and receiving EFT payments, and receiving salary deposits?
Or do you want to maximise your benefits and rewards by upgrading to a full banking suite that comes with an enhanced state-of-the-art credit card paired with a superior transaction account that will give you the most flexible credit facility on the market, and the freedom to decide how to split your credit between your credit card and overdraft?
Explore and compare Discovery Bank's credit cards and full banking suites and find the perfect product for you.
July is Savings Month, and this year the benefits of saving have been further highlighted as we face a global pandemic. Saving money is one of the most important things that can help you be financially secure under any circumstances. The first step towards getting where you want to be financially is to set SMART goals.
Along with other aspects of life, you may need to adjust your finances during this unprecedented time. Many were caught off-guard. It's not too late for some financial checks and adjustments to be more prepared. Akash Dowra, Head of Client Insights at Discovery Bank, shares some tips and advice.
Behavioural theory shows that we humans don't always make the most rational choices that serve us well in future. In uncertain times, we may also take more risks or make hasty decisions. Stop, take a moment and look these five behaviours and how you rate.