Credit Card Blues? Money Indaba – March 2010

Phumelele Ndumo
Phumelele Ndumo

Credit card blues? You are not alone! I thought I knew all there was to know about credit cards until recently. I found out ignorance is costly.

Do you know that many people are unable to get a home loan or are charged very expensive home loan rates because they paid their credit card account a day or two later than they were supposed to? Credit bureaus give them “Slow Payer” status for paying late. So if you want to buy a car or a home one day, make sure you pay your credit card by Payment Date. What surprises me though is that whilst most companies pay their employees salaries between the 20th and the last day of each month, credit card providers generally want you to pay them somewhere in the middle of the month, this is at a time when you most probably have no money left to pay them. So you either skip the payment or pay them late and this negatively affects your credit scoring. Not only that, if you miss your payment date by just one day, you can get charged a Late Payment Fee of up to R186 – nice way to make money for some people.

My Tips:

  • Ask your credit card provider to make your Payment date to be 1 day after your salary date
  • Put a Stop Order in place to pay your credit card so you pay them on time every month and avoid unnecessary charges.

Do you understand your credit card?

Take the following test & find out

1. Do you know what Statement Date means?

2. What is your Statement Date?
E.g. Mine is the 18th of the month

3.    Do you perhaps have more than 1 Statement Date for your card?

4.    How many Interest Free days do you have on your card?

E.g. I have 55 days interest free days. Some people have 35 days.

5.    Do you know how to work out your Interest Free spending days on your credit card?

6.    Do you know how to take advantage of your Interest Free days?

7.    What is your Payment Date? E.g. mine is the 13th of each month

8.    What is the Late payment fee on your card?

E.g. I would be charged R186 if I missed my payment date by just 1 day

9.    Can you negotiate your payment date with your credit card provider?
E.g. make it 1 day after your salary date?

10.  What interest rate are you charged on your card?

11.  What is the maximum interest rate you can be charged according to the National Credit Act?

12.  What is the credit interest rate on your card?

13.  Can you set your own limit?

14.  Do you understand the implications of paying for items under the budget facility?

15.  Can you settle your budget facility installment by paying the full amount due on your card?

Remember if you have more than 1 credit card, you need to know all of the above for each one of your cards.

What the test score means

  • If you scored less than 60% on the test, you are probably paying too much on your credit card. You might want to visit your bank and ask them to help you understand your card. Don’t be too surprised if they cannot help you. My 23 year old nephew just got his first credit card. They let him sign for it  & handed him the card. When he asked them what the statement date and payment dates were (coached by the aunt of course), they couldn’t answer him and asked him to await receipt of his first statement. I am therefore not surprised that very few people really understand how their credit cards work – and sadly, end up accumulating lots of debt that they cannot even explain or know how to get out of.
  • If you failed the test & you want to be credit card smart & beat the banks at their own game, then contact me – we’ll work out a plan.

If you have credit card stories & good tips to share with us, please write to us at We will share your ideas with everyone if you send us your full name and contact details.

Article written by Phumelele Ndumo; author of the book, 7 Secrets why the rich own their homes and founding MD of ThuthukaSA. Remember to visit our website for more money tips.

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