The word “credit” is derived from the Latin word “creditum” which means “loan” or a “thing entrusted to another.” Buying on credit means that you are buying something with the promise that you will pay in the future.
Being able to buy on credit also means that you need to be clear about how much you can realistically afford to repay. This way you can avoid all the temptations that come with buying on credit.
In South Africa, anyone who is over the age of 18 years old can apply for credit. Having access to large sums of money can be tempting for anyone and having access to credit can often tempt individuals even more.
One way to avoid the temptations that come with buying on credit is by starting small. By buying small items you can avoid incurring a high expense.
If you have a credit card, make sure that you use it for emergencies. This will help you avoid making impulse buys, which are likely to lead to high repayment amounts.
By watching your credit limits you can keep track of how much you are spending. It also helps to ensure that you avoid spending more than 30 percent of the amount of credit you have available. With any credit cards you may have, you should stay below your credit limit and lower your credit utilization ratio.
Be specific about the type of credit card that you are looking for. You should also do your research beforehand and make sure that you apply for a credit card that you will be able to afford to repay on a monthly basis. Choose a credit card that is right for your needs. Make sure that you repay your credit on time and that you make regular payments.