Apply for a Credit Card in South Africa
27th October 2016
Credit cards are a good investment, and now you can apply for a Credit card in South Africa.
Also known as short-term unsecured credit products, they have received unjustified criticism because of people who misuse them. There are a few things you can do to avoid credit card pitfalls.
Stick to a budget and avoid overspending. Keep track of your purchases by taking a good look at your monthly statement and pay the amount that the lender asks for every month.
If you apply for a Credit Card, Use it Responsibly
If you use a credit card in a controlled, disciplined way, it can get you out of an unforeseen financial dilemma. There are different types of credit cards, each one offering different features and benefits –
- Affinity cards – both Visa and Mastercard
- Reward cards – they reward loyalty with cash back or rebates
- Student credit cards – have lower interest rates
- Business credit cards
- Co-branded credit cards – a marketing strategy by airline or retail chain brands
Credit cards work in a similar way to overdrafts. You’re able to borrow money up to a set limit and still have an interest-free period to repay your debt. You pay interest on the outstanding balance if you don’t pay within the interest-free period.
With a credit card, you’ll get to understand the different ways people pay. Non-revolvers are individuals who pay their credit card balances in full each month. Revolvers tend to pay the minimum payment and unfortunately end up paying interest charges.
Handle a Credit Card with Respect
When you apply for a credit card, you’re entering a legally binding contract between you and the credit lender. You become responsible for any debt you incur. If you find that it has become difficult to make repayments, rather contact your provider to discuss your options.
When you apply for a credit card, you’ll discover that there are quite a few different options and lenders –
- Standard Bank
- Virgin Money
- Debt Lab
- Just Money
- Diamond Bank
- African Bank
Compare these different credit cards and look for the one that comes with the lowest interest rate, and reasonable fees.
What are Store Cards?
Woolworths is one of the major department store chains in the country. Woolworths have a choice of Black, Silver, Gold or Platinum cards. Store cards are more expensive than credit cards offered by the bank.
All cards are provided in partnership with Visa which means you can use them at all ATMs and retail outlets. Benefits of a card include: automatic travel insurance, lost card protection service, balance protection and a budget facility.
You can also get up to 8 secondary cards at no extra charge. For instance, to get the Silver card, you’ll need to earn a monthly income of R2 000 or higher. Each card has own unique benefits.
You should Have at Least one Credit card
Although it’s a good idea to have a credit card, you must bear in mind that credit cards traditionally have the highest interest rates. Some lenders offer you a card without you asking. If so, read all the terms and conditions of the agreement.
The Consumer Credit Act of 1974 regulates the agreement, and you receive a copy of the accord on approval.
You may be a little disappointed at the credit limit allocated, however, if you pay the right amount on time every month, the bank will raise the limit on your card.
There are Benefits to Owning a Credit Card
Correctly handled, a credit card can offer many advantages which include –
Rewards – Most credit cards offer you rewards. Rewards are a ploy to get people to use their cards more often, but when properly used, you can save a lot of money. Some rewards are airline miles as well as a generous sign-up bonus for opening an account.
Convenience – When travelling and you find yourself in a strange town, don’t waste time hunting for an ATM. Use your card to shop, eat or pay for a stopover. You can use these cards locally and abroad.
Instant purchases – A credit card allows you to buy something like a fridge or stove and pay it off in monthly instalments. If your refrigerator breaks down you’ll have to survive without it should you have no cash.
Save money on purchases – Excellent deals are available on the Internet, but the only way to pay for online purchases is with a credit card.
Emergency money is instantly available – You’ve always got instant access to money in case of an emergency. Very few people in South Africa dare to carry around significant amounts of cash. With a well-managed credit card, you’ve got a ‘full wallet’ whenever you need it.
You always know what you’ve spent – A credit card gives you a detailed summary of your spending each month. With cash, you can easily lose track of what you’re spending, but your credit card records give a clear indication.
What do I need to Apply for a Credit Card?
To apply for a credit card, you need to be employed and 18 years old or older. When you apply for a credit card you may not get one. Your application will be based on a number of factors, one of which will be your credit worthiness.
Most credit card providers will give you an idea of what their eligibility criteria is, and by reading this, you’ll get an idea of whether you stand a chance or not.
Credit Cards offer a Carefree Lifestyle – When Handled Responsibly
Don’t let people who have abused their cards tell you that having a credit card is bad for you. Credit cards provide you with a tremendous amount of convenience, provided you use yours responsibly.
All info was correct at time of publishing