Your credit history gives you access to obtain loans or to enter
into financial contracts such as rental or telephones.
- If you default on a credit contract, you may get a bad credit
- When your loan or finance applications are assessed, the
finance or service company generally checks your credit
- Any bad credit rating will make it difficult for you to borrow
- Interest rates and loan fees can vary enormously depending on
your credit rating. A bad credit rating may only make you eligible
for high interest rate loans.
- If you are offered additional credit, for example on your
credit card, only accept it is you have calculated that you can
afford to use it and make the higher repayments involved.
- If you have bought goods and services on credit, for example
using a credit card, make sure you understand your payment
obligations and the fees and penalties involved if you face
difficulties making repayments. If you are not sure, talk to
your finance company or seek help from a financial counsellor. (see
- Compare interest rates and any fees charged, interest rates can
vary from around 11% to as high as 35% and fees can vary
enormously. There are fixed regular service fees and penalty
- Get the best deal. If you have a bad credit rating, you
may only be eligible for high interest card.
- Make at least the minimum monthly payment by the deadline, if
you don't you will incur interest plus additional penalties.
Beware of a credit card advertised as "low rate for first year".
What are the penalties? When you are in debt after the
first year, what will be the interest rate?
Another catch is, "no annual fees". What other fees such
as monthly charges or membership fees will you have to pay?
If you are offered a credit limit increase on your card, do not
accept automatically. Do you really need the extra credit?
Can you afford additional repayments? Accepting such
offers has started many people on the road to unmanageable
Limit yourself to one credit card only. Keep your monthly
statements. Check if your balance is creeping up. If
so, it is a danger signal.
If you want the convenience of credit card payments but don't
want debts, get a debit card instead.
DO NOT use credit cards to pay other bills and debts
Do you need HELP with sorting out your credit?
If you are having trouble managing your credit card debts, talk
to a financial counsellor, contact numbers can be found in our help