People will give you many reasons as to why NOT to get credit: interest rates are high, so repayments will be a bitch and it is unnecessary temptation. This post is to tell you about how credit can actually benefit you. Having a good credit history can make you a good candidate for home loans (and other big purchases). How else is your bank going to know what kind of debtor you are. That student savings account adds no points to your credit history and the student cheque card just doesn’t add enough points. These days you either need to be a millionaire, marry a millionaire..or have a good credit history, to qualify as a good candidate.
My way was to build a good credit record and I highly recommend that you follow suit.
Since I entered the job market, I have opened store accounts and had bank cards. I started with an Edgars account and shortly afterwards, I applied for a YDE account. I remember being given the choice between a plain card and the one with a cute pony on the front. Once I made that YDE pony mine, I never looked back.
At the time, I was working part-time at Ster Kinekor , so I wasn’t earning much. The cards quickly became a necessity, especially my Edgars account…and especially in times of unexpected expenses, such as birthdays. As part of the Edcon group, my Edgars card allowed me to shop at any of their umbrella corporation (including the likes of Boardmans, Jet, CNA and Temptations)…not to mention my occasional dose of COSMO, HEAT and Men’s Health.
With my first bank credit card, I felt a different form of elation. It’s a lot more satisfying to know that a registered credit provider, is extending credit to you. It’s something of an affirmation that you are now a Big People!!! *DONG*
Today, I am not ashamed to say that I am the owner of 4 store cards, 7 bank debit and credit cards and 6 points/cash cards…And much like looks are important to some of us when choosing a partner, looks are definitely an important part in choosing my cards. (Second to benefits and cost of the account, of course)
….and then on the 1st of June 2006, the National Credit Act of 2005 came out!!!
“The purpose of this Act is to promote and advance the social and economic welfare of South Africans, promote a fair, transparent, competitive, sustainable, responsible, efficient, effective and accessible credit market and industry, and to protect consumers.” (Acquired from http://ftp.shf.org.za/credit_act_faq.pdf)
The implementation of the Act, means that credit is not as easily accessible to consumers, as it was before. Well, it’s not supposed to be. The Act was designed to allow the regulation of credit and to ensure that consumers are not overwhelmed by debt and that the bulk of their income does not go towards paying off debt.
A simple way to maintain your debt, is to adhere to the following steps:
- Keep track of your debt. This is vital because it is so easy to lose track of dates, especially when your attention is needed elsewhere all the time. Most credit card holders are workers, so naturally, our work demands our attention as well. I find that diarising due dates with it’s amounts, to be quite helpful.
- Pay on or before the due date.
- Do not max out your credit cards. Treat them as emergency items and only use when necessary. Use the debit card FIRST. ALWAYS!
- Finally, everything in moderation! 🙂
To conclude, I would say that credit is good, in the hands of the right people. I guess it is a sad thing that you need money to qualify to receive money from the bank, especially when the ones who REALLY need money the most, don’t have access to it, as “freely” as we do. So the fortunate few who have been blessed with jobs, should do well to maintain the their credit records. That’s of course if you are thinking of the future. A good credit record today, paves the way for good spending habits and spending behaviour, which show financial institutions that you are, indeed, worthy of a huge loan/ mortgage bond.
If all else fails, just marry a millionaire…if that’s your style.
Don’t forget to follow me on Twitter: @ToxicSweety_
ToxicSweety over and out 🙂
|Credit! Who can resist?|