What’s the Best Credit Card for You?

In South Africa, many people cannot live without a credit card. Credit Life has become an important part of our financial culture. As many South Africans have various types of credit. South Africa has 6.9 million credit card holders, with one-fifth having more than one credit card.

South Africans receive one too many credit cards, and sometimes credit cards that they do not require. This leads to impulsive purchasing, which causes people to overspend on their credit cards.

How do you know you have a credit card that you need?

Credit cards allow for various types of spending; therefore, it is best to obtain the credit card that you require. Having a variety of credit cards can help you improve your credit score. Actually, your credit mix accounts for 10% of your credit score.

Obtaining a credit mix does not imply that you must use or exhaust your credit; credit cards can remain unused for a period of time. When using credit, you must prioritize the use of a credit card that works for you.

One must understand his or her options, which can be accomplished by asking the appropriate questions. This is because there is no one credit card that fits all, so some digging is required.

To find the best credit card for your spending habits, you should first check your credit score.

Step1: Checking your credit rating

There are numerous credit cards available in South Africa, and locating one that suits you can be difficult. By first checking your credit score, you will be able to determine what you are likely to qualify for. Platforms like Clearscore and Fincheck can help you see which credit cards you are likely to qualify for.

If you have a good credit score, you can apply for any credit card that suits you. You can view your inquiries and more by checking your credit report for free with one of the three major credit bureaus.

Step 2: shortlist the cards that you are likely to qualify for

Choose the credit card that is best for you.

You need to choose a credit card that works for you now that you know your credit score and have information about your credit behavior. If your credit score is low, you must improve it by reviewing your credit report and implementing the credit bureau recommendations.

To make a more informed decision, you must categorize the different types of credit cards. Credit cards in South Africa are classified as follows:

• Store credit cards,
• Clothing credit cards,
• Travel credit cards,
• Petrol cards,
• Bank credit cards, and
• Student credit cards,

The shortlisting will assist you in narrowing down the credit card types, to the credit card that you desire. The best credit card is one with the most features that you want in a credit card. A petrol card, for example, is not required for someone who doesn’t own a car.

A store credit card is useful for people who want to use credit to buy groceries and furniture. As a result, a Makro credit card, for example, is a good credit card for this type of activity.

A need for a more versatile credit card may arise, in which case a bank credit card will be required. A bank credit card allows for various types of purchases. However, a  bank credit card carries a very high interest rate.

Now that you’ve identified the cards that best suit your spending habits, the next step is to select one from a selection.

Step 3: Shop for a credit card

After determining the type of credit card you require, the next step is to shop for one. Given that you know what type of credit card you require, you will know where to begin your search for a credit card.

For clothing credit cards, look for fashion houses that offer credit cards, and for travel credit cards, look for cards that are available across multiple platforms such as the Nedbank Voyager Platinum Credit card. When looking for a credit card, make sure to choose one with low fees.

Step 4: Apply for the best credit card

When it comes to credit, don’t make too many credit inquiries in order to obtain a credit card. Credit inquiries remain on one’s credit profile for at least 12 months, preventing one’s credit score from increasing in the following year.

Limit your options to no more than three and select the one for which you want to apply. It is highly important to take note of minor details such as an automatic credit limit increase, the maximum installments payable, a rewards program, and so on.

The only credit card left is the one you should apply for. A credit card application can be completed entirely online. Some stores, such as Hifi Corp, do not allow credit to be issued entirely online, therefore, an applicant will have to visit one of their branches to complete an application. 

Conclusion

The best credit card for you is one that offers benefits that correspond to your spending habits. However, there are other factors to consider when applying for a credit card, and the cost of the credit card should stand out.

Credit cards have fees, and fees can be charged on a variety of transactions, particularly with a bank credit card. Examine the fees that a credit card charges to be aware of the costs.

Consider the issuer’s reputation as well. Given that not all credit companies are what they claim to be, researching what others say about the credit card will help you choose the credit card that you want but with an issuer that provides the services you require.