In South Africa, it’s never a good idea to carry around too much cash on your person, after all, the chances of misplacing or losing a wallet or purse are quite high and no one wants the added stress and anxiety of losing a ton of cash.

This type of situation can be especially stressful when it’s time to pay your utility bills or when you’re at the grocery store and realise you somehow lost your money or wallet.

As South Africans, we have learned it’s probably a better idea to carry our debit cards with us since after all most of us can keep our debit card in our phone case or pocket. However, what happens when we do not have enough money in our account right now to purchase and pay for the things we need?

Asking family or friends for a quick loan could be an option, yet we will likely face this situation more than once, so why not opt for a credit card instead?

What is a credit card?

A credit card is issued to users by financial providers and allows users to pay for goods or services against a line of credit. A credit card enables users to utilise this line of credit over and over again so long as the amount borrowed against the line of credit gets repaid monthly or over a period of a few months. This sounds utterly convenient and yet there are many other added benefits to having a credit card.

Benefits of credit cards;

Credit cards are quick & easy to get

Obtaining a credit card is a fairly simple process whereby you simply fill out a loan application online or in-person with your chosen credit provider. Once your application has been approved, you can either pick up your card from the finance provider's local branch or the card will be couriered to you.

Building & improving your credit score

Once you have obtained your credit card and are using it often and making your required monthly repayments - you are actively busy improving your credit score and showing future lenders that you are able to maintain a stable credit record. It also shows them that you are more eligible for larger loans such as car loans or home loans.

Interest-free periods on credit cards

Credit cards offer you the added benefit of giving you access to cash for a time period during which no interest will be charged to that loan amount. The interest-free period depends on which finance provider you received your credit card from, so be sure to find out your time frame.

Pay off big purchases over time

One of the biggest benefits and possibly the most convenient aspect of having a credit card is the ability to buy big-ticket items such as expensive appliances or pay for major car services. Each of these things can cost well over a few thousand Rands and that’s the kind of money we have lying around. With a credit card, you can make these larger purchases and pay them off over a few months at a reasonable interest rate.

Forex for what?

That’s correct! If you are someone who can either afford to travel abroad or travels abroad for business - when you have a credit card (Visa or Mastercard) you can pay for things instead of buying foreign currency from a bank and carrying around that currency.

Credit card reward programs in South Africa

An added bonus of having a credit card is that they’re often linked to a rewards or benefits program of some sort. You can earn rewards when you purchase everyday items - these rewards can give you flight points, petrol points or food and drink rewards. The possibilities are vast and depend on your credit provider. Some even give you cashback rewards with each swipe. Be sure to find out what rewards program your credit provider offers.

Keeping in mind the convenience, benefits and features of having a credit card, are you tempted to get one of your own? What’s stopping you? Consult the web or your current finance provider to find out which credit card options they have on offer or make use of a loan comparison site to see which finance providers offer the best rates and rewards programs. Remember you can easily apply online!