So, you’re in the market for a credit card, and you’re wondering, “Which credit card should I get?” First and foremost, there is no such thing as the best credit card; only the greatest credit card for you exists.
Choosing the best credit card in South Africa is a personal decision that should be personalized to your specific spending patterns and goals, whether you want to earn points and miles for travel or get cash back on everyday purchases.
Most essential, you should use a credit card to purchase items that you could not afford with cash – and that you can pay off without accruing excessive interest by carrying a balance.
So, before you get started, there are a few card features to be aware of before applying for any card.
Check Your Credit Score
Check your credit score first. Knowing your credit score will help you understand what kinds of cards and offers you may be qualified for.
The better your credit score, the more likely you are to get approved for high-end credit cards with high-level features and incentives.
When you apply for a credit card, the issuer does a “hard inquiry” on your credit record to assess your creditworthiness.
Unlike a “soft inquiry,” this has the potential to decrease your credit score by roughly five points. That, however, is only a matter of time.
While you purchase or rent a home, finance a car, apply for any sort of credit, or even sign up for a mobile phone contract, your credit score comes into play, so bear that in mind when applying for a card.
When you think you’ll be accepted for a card and know you’ll use it, apply.
Obtaining the best credit card in South Africa can also aid in the development of credit history, which is a significant factor in your credit score.
It can also help you begin a credit card plan, particularly if you want to start small with a no-annual-fee or reward card and work your way up to higher-tier cards.
It will be critical in the future to demonstrate to issuers that you can properly manage a credit card by paying your bills on time and not exceeding your credit limit.
How Will You Use the Card?
Understanding how the card will reward you for your spending is arguably the most essential element in deciding which card to purchase.
You may receive points that may be redeemed for travel or other credits, airline miles, or cash back, allowing you to save money right away on your purchases.
You may earn extra points on a variety of purchases with several credit cards, including eating, grocery, travel, flights, hotels, and more. If you’re thinking about obtaining a credit card that earns you travel rewards, make sure you pick one that provides you extra points for the things you spend the most money on.
This will help you optimize your profits.
Consider obtaining a card that offers additional points on eating if you often spend money on going out to eat or ordering takeout.
Before deciding on a credit card, we recommend having a look at your spending patterns.
It’s critical to choose one that closely resembles your spending patterns and preferences in order to get the most bang for your buck.
Interest Rate
Paying your credit card debt on time and in full every month is one of the cardinal principles of credit cards.
Not paying your bills in full might basically nullify any benefits you do wind up receiving, especially if you have a travel rewards card that accumulates points you can use for vacation.
Of course, we understand that this is not always possible for everyone, and that carrying a balance is sometimes inevitable. If you’re thinking about acquiring a credit card but know you’ll be carrying a load from time to time, you should check at cards with a low interest rate.
Credit Limit
A credit limit, or the maximum amount of money you may spend on a credit card, is a feature of redit cards.
In that regard, they vary from charge cards in that charge cards do not have a credit limit.
The best credit card in South Africa issuer determines your credit limit for each card.
Your credit score, income level, payment history, and other factors are used to determine how much the issuer will allow you borrow.
The lender will want to see a picture of your ability to pay back the debt.
Rewards and Incentives
Many credit cards provide advantages and bonuses to help you make the most of your trips and everyday life.
Access to airport lounges, travel credits, free hotel stays, Uber credits, food credits, and more are among the benefits.
Most of those cards with a lot of advantages have hefty yearly membership costs, but the benefits may more than make up for it if you use them.
As a result, it’s critical to apply for a credit card with perks you know you’ll use.
Lounge access, for example, may not be appealing if most of the globe has halted or restricted travel due to the coronavirus epidemic, but meal credits may be considerably more appealing.
A sign-up bonus, sometimes known as a welcome incentive, is offered by several travel rewards credit cards. You will get bonus points if you spend a specific amount of money in a specified length of time after opening your account.
Take a hard look at what you might do with the bonus because it varies from card to card and can earn a lot of points.
However, you must be certain that you can spend enough in the time allotted to accomplish the goal.
This is why it’s critical to ensure that you can pay your credit card payments on time, ideally in full, every month.
Don’t use a credit card to spend more than you would with a debit card or cash merely to get the sign-up bonus.
The interest you pay on the sum you hold may easily wipe out the bonus’s worth.
Best Credit Card in South Africa Final Thoughts
This is why it’s critical to ensure that you can pay your credit card payments on time, ideally in full, every month.
Don’t use a credit card to spend more than you would with a debit card or cash merely to get the sign-up bonus.
The interest you pay on the sum you hold may easily wipe out the bonus’s worth.