30 Apr 2012
Your Money Column
In my opinion, you can never receive too much advice when it comes to your money. Have you seen my latest column in Adelaide’s ‘The Advertiser’? Once a month, I express my views and provide advice on various topics relevant to financial services.
Below is a condensed version of the April column published in The Advertiser. Feel free to let me know if there is any particular topic you would like to hear more about.
Be diligent with credit cards
Credit cards have become so ingrained in today’s society that it’s almost impossible for some people to survive financially without them.
The main advantage of credit cards is they enable people to access instant credit, without immediately impacting on cash flow.
The downside of credit cards is that in most instances, they have a higher interest rate than most other forms of credit and you’re charged interest on all outstanding transactions if you don’t pay your full balance each month.
Credit cards can be a valuable asset in managing your money if you have the willpower to keep them under control.
Keep in mind the following things when thinking of getting one or managing your current one. Try to remain diligent and if possible, pay off your credit card balance at the end of each month or within the interest free period.
If you do accumulate a large balance on your credit card and it isn’t possible to pay off the entire amount, try and make more than just the minimum monthly payments to reduce the amount of interest you pay, and where possible, avoid cash advances as they normally have a higher interest rate.
Try to limit the number of credit cards you have and always get a credit limit that reflects what you can afford within your budget to avoid accumulating multiple credit card debt.
Credit cards can be a valuable financial tool as long as you’re smart about repayments, your credit limit and the type of card you get. If you do find yourself with spiralling credit card debt, consider consolidating it into a personal loan. This ensures you’re bound by forced repayments and prevents you from adding to your debt. But make sure you cancel your credit card so you’re not tempted to repeat past mistakes and create further debt.
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