16 May 2018

Build up your credit card confidence

When you’ve got a good amount of saving experience under your belt, it might be time to think about adding credit to your spending mix.

Here are some reasons why credit may be a benefit to you:

  • If you have funds working for you in a mortgage offset account, you might want to use your credit card for your regular purchases and pay off the entire balance each month. This may help in allowing you to keep your salary in your offset account for longer.
  • Some cards can offer perks like travel insurance, points and or cash back
  • They are accepted as a payment method in many countries.

There are perks, but becoming a credit card user takes responsibility and some getting used to. That’s why we’ve got a few tips to get your confidence up as you start to balance debit with credit.

1. Get to know your credit card

Thoroughly read all of the collateral and information on your new card to get the lay of the land. Learn if there are any perks, what the interest rates are, and if there are any features that help you stay on track of spending.

Credit is something you need to keep a watchful eye on, so it’s important to know everything there is to know about your card.

The key things to understand are:
• If there are any fees
• The interest rate on purchases, instalments and cash advances
• Minimum and maximum credit limit
• Minimum repayments – the lowest amount a credit card user has to pay to meet the requirements of the card
• The benefits to paying your balance in full each month.

2. Ease it into your everyday budget

Dip your toes into the water to build up your confidence with budgeting and spending. Don’t jump right away into a major multi-instalment purchase – start with using it on some smaller items and paying off your balance in full. This will give you an understanding of how much you can actually afford to spend each month, as well as the additional interest you would need to pay if you didn’t pay the full balance each month. It can also get you in the habit of only using the card for things you know you can afford.

3. Know your limits

Keep an eye on your credit card spending to make sure you don’t go over the limit. In some cases card providers can block further transactions until you pay it off.

There are a few great ways to keep track of how close you are to your limit. For instance, the Australian Securities and Investments Commission (ASIC) have the TrackMySPEND app which tracks your expenses as you make them on the go. ING’s Orange One credit card allows you to set up notifications when you’re getting close to your limit. They’ll come through to your phone so wherever you are, you’ll know.

4. Take advantage of automatic repayments

If you want to be confident that you’ll make your credit card payments on time, there are ways to make sure this happens without you needing to think about it. With some credit cards like ING’s Orange One, you link your transaction or savings account to your card so the payment for the credit card comes out of your account automatically each month.

A credit card can be a great part of your financial arsenal if you can use it in a responsible way, and exploring your card options can help you find the one that suits your lifestyle best. To find out about the benefits of ING’s Orange One and how you can apply, click here.

Find out all you need to know about ING's Orange One credit card.

The information is current as at publication. Any advice on this website does not take into account your objectives, financial situation or needs and you should consider whether it is appropriate for you. Deposit products, savings products, credit card and home loan products are issued by ING, a business name of ING Bank (Australia) Limited ABN 24 000 893 292, AFSL and Australian Credit Licence 229823. Living Super, a sub-plan of OneSuper ABN 43 905 581 638 is issued by Diversa Trustees Limited ABN 49 006 421 638, AFSL 235153 RSE L0000635. The insurance cover offered by Living Super is provided by Metlife Insurance Limited ABN 75 004 274 882, AFSL 238096. ING Insurance is issued by Auto & General Insurance Company Limited (AGIC) ABN 42 111 586 353 AFSL Licence No 285571 as insurer. It is distributed by Auto & General Services Pty Ltd (AGS) ABN 61 003 617 909 AFSL 241411 and by ING as an Authorised Representative AR 1247634 of AGS. All applications for credit are subject to ING's credit approval criteria, and fees and charges apply. You should consider the relevant Product Disclosure Statement, Terms and Conditions, Fees and Limits Schedule, Financial Services Guide, Key Facts Sheet and Credit Guide available at ing.com.au when deciding whether to acquire, or to continue to hold, a product. Before interacting with us via our social media platforms, please take a minute to familiarise yourself with our Social Media User Terms https://www.ing.com.au/pdf/Social_Media_User_Terms.pdf.

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