Using your credit card to build credit rating | KAYA FM

Using your credit card to build credit rating

13 Mar 2019 LIFESTYLE

By Motlagae Konyana

Learning to manage your credit when you are younger will ensure your financial well-being later in your adult life. Having a credit card can help build your credit record provided it is used wisely.

When applying for a credit card, some of the most important factors include knowing how much you can afford, what the fees on the card are as well as the interest rate. A good way to start is to set a limit lower than what you can afford and try not to spend more than what you are able to pay back in full on a monthly basis. 

Essential factors you should be familiar with once you have your credit card: 


Build your credit score


Familiarise yourself with behaviour that will build a positive credit record. Ensure that you pay your credit card in full every month or pay more than what monthly minimum repayments stipulate. Also make sure that the bills you receive are in your name and you keep proof of payments. Check your credit record at all credit bureaus to ensure that your information is correct and that there is no credit taken in your name without your knowledge. 

 Interest-free repayment period

Most banks offer an interest-free repayment period on a credit card. This functionality allows you to pay your credit card in full on a monthly basis without incurring interest. Remember that interest on a credit card accumulates on your daily balances.


Lastly, find our if your bank offers you credit facilities that will grow with your financial status and credit rating. 

Credit usage and the financial implications that come with it may seem complicated, being well informed with the  implications of credit facilities will help you in preparation for the larger credit agreements like a vehicle or home loan.