Credit cards

Ah, the fickle credit card.

Use it wisely and you’re rewarded with a powerful financial tool that can simplify your life in a bunch of different ways. Use it poorly and you’re liable to end up in a stack of high-interest debt.

Here are five simple things you do to maximise the potential of your credit card.

1. Maximise your rewards

One of the perks of owning a credit card is that you’re often rewarded just for using it. Whether it’s Airpoints, luxury goods or cold hard cash, compare credit cards in NZ to ensure your provider’s reward system suits your interests and matches your spending habits.

2. Don’t be afraid to chargeback

Unhappy with goods or services you’ve purchased on your credit card? Recover your money with a simple chargeback. As the NZ Herald reported, 90 percent of respondents in a Consumers’ Checkbook poll reported that their chargebacks in 2016 had been successful.

3. Avoid taking out a cash advance

While it is possible to use your credit card to take out a cash advance, most providers impose a fee and will immediately start charging interest from the date you withdraw the money. Unless it’s an emergency, never take out a cash advance on your credit card.

4. Set a sensible credit limit

After you’ve proven to be a responsible financial customer, many banks will allow you to increase your credit limit – quite drastically, in some instances. Resist temptation from the get go by setting yourself a credit limit you know you can pay off in a reasonable amount of time.

5. Pay it off on time

It’s no big secret, but our number one piece of advice is to always pay off your credit card on time. Fail to do so and you’ll start incurring massive interest, which can rapidly stack up and wreak havoc on your finances.

Have any questions or comments? Let us know in the comments section below.

Happy Saving!
PocketWise

The foreign, exotic land that is New Zealand’s financial sector is chock-a-block with all sorts of monetary jargon that you may or may not be familiar with. Here are some of the most common terms you might come across:

Annual fee – The yearly fee your bank charges you to use a credit card. This can vary between banks and cards, so always compare credit cards in New Zealand before committing.

Balance – In the context of credit cards, this refers to the amount of money owed.

Billing cycle – The sweet, sweet period of time between receiving your credit card bills. Typically about 28 days.

Cash advance – A cash loan from your credit card. Be aware that a cash advance usually comes with fees and immediate interest. Use cautiously.

Cash back – Some credit cards offer you cash back equal to a percentage of the amount of money you’ve spent on your card within a certain timeframe. Excellent feature, if used wisely.

Chargeback – Reversal of a transaction, usually because you’re unhappy with a product or service you’ve purchased.

Chip card – Credit card featuring microchip technology.

Credit Limit – The maximum amount of money that can be charged to your credit card account. Talk to your bank about increasing or decreasing this value.

Interest rate – The annual interest charged on your unpaid credit card balance.

Minimum payment – The minimum amount of money you are required to pay on your credit card bill each month.

Rewards – Incentives provided by credit card issuers that are given when the card is used. Typically come in the form of redeemable points, Airpoints or cash back.

Secured credit card – A credit card that needs collateral (often property, a vehicle, cash, etc) before it can be approved. Usually used by those with bad credit history.

If you’re looking for a new (or first) credit card, remember to compare credit cards to ensure you’re getting the best deal that suits your needs

Happy comparing, and saving.
PocketWise