Smart Buying and Credit

Prior to this course, I had little thought or regard over the way I purchased my goods whether it be eftpos, cash or credit. However, I did notice I spent less if I tracked my cash by putting my allowed spending amount into my wallet for my weekly expenses. It made me prioritise necessities and wants. It also meant there was no chance of me paying credit on my purchases by not paying the full balance on my credit card at the end of the month. So if you want to buy something, try to pay cash or lay-by.

Credit cards can be handy in emergency situations but they do lead to overspending and spending your paycheck early. I have had this problem several times and I need to rectify this. Firstly, one tip from Clitheroe is to always ask before handing over the credit card if a transaction surcharge applies. Secondly, always pay off your balance in full before the required date to avoid paying interest. Thirdly, shop around for the best deals if a credit card is necessary. Last year I was able to get a 0% balance transfer interest rate with no annual fees with HSBC which helped me enormously. Unfortunately I ended up creating another debt as I did not learn my lesson as my parents helped me pay off my debt problem. So I am in the process of paying it off again but this time on a NAB 0% balance transfer and this time I am being more careful with my money.

Having too many applications on your credit rating can tarnish your credit rating. One positive though is that if you show that you always pay off your credit card and that you are a safe person to lend to, your credit rating increases! Which means down the track I will have a higher credit rating than someone who may never have had debt by not owning a credit card.