A little information needed about credit.

[Chester009]

Here's the deal, I've never had a credit card or taken a bank loan and I've always saved up for 2 to 3 months when I wanted to buy pricey things in cash. Sometimes though I miss out on really great deals because things would go on sale and I wouldn't have enough saved to buy them before being sold out or returning to normal price.

So I had a thought, what if I had a credit card and then when the things on my wishlist/to-buy list go on sale at unexpected times, I can buy it immediatly and I settle the bill in 2/3 months like I normally would but without missing out?

I know people talk about always settle your credit card in full each month and all that, but is a credit card worth it to pay off in 3 months when you bought something you wanted at like R1k/R1.5k less than normal price? What interest would I be looking at if I settle R9k in 3 months at like 21% interest rate? (Rough estimate, not sure how much banks charge interest on credit cards)

And another thing, do store cards(GAME, HiFi, Marko etc) also work the same if I settle my purchases in 3 months?

 

[Steamy Tom]

imagine if you could instead save up the money, and always have it ready to buy that item when it came on sale?

 

[r4nd0m]

Unless you're targeting reward benefits or want to establish a credit record, you should rather create your own 'credit card' whereby you save enough and replenish it yourself over time.

That way you're out of debt, never pay interest and only beholden to the bank of 'you'. Telling you this because you've already got that saving mentality down.

 

[saor]

So I had a thought, what if I had a credit card and then when the things on my wishlist/to-buy list go on sale at unexpected times, I can buy it immediatly and I settle the bill in 2/3 months like I normally would but without missing out?

Yeah, and then what happens when you have unexpected expenses. Like your car breaks down but now you also have the rest of that GPU and tv to pay off. And then you can't, and you get screwed. Nothing good comes from trying to use a credit card like this, because life is unpredictable.

Rather budget properly and save than spend money you don't have on stuff you don't really need.

 

[Dairyfarmer]

What interest would I be looking at if I settle R9k in 3 months at like 21% interest rate? (Rough estimate, not sure how much banks charge interest on credit cards)

If you buy something this month you have till just before the end of the next month to settle. What is outstanding then attracts interest.

So your bank may say that you have till the 25th of the month to pay either the minimum or more. So on the 2nd of May you buy a TV for R9k. Interest on that only gets charged on 25th June. If the end on May you pay R5k then only R4k is outstanding. If you then pay R2k before 25th June, your outstanding balance is only R2k which will have interest added onto it for July onwards.

 

[Chester009]

		Unless you're targeting reward benefits or want to establish a credit record, you should rather create your own 'credit card' whereby you save enough and replenish it yourself over time. That way you're out of debt, never pay interest and only beholden to the bank of 'you'. Telling you this because you've already got that saving mentality down. Building a credit record will be a huge bonus. I mean sure I can save but I doubt I'll be able to buy the car that I want cash.

 

[mister]

I know people talk about always settle your credit card in full each month and all that

If you don't listen then you become another money-spinner for the banks.

 

[Chester009]

I

Yeah, and then what happens when you have unexpected expenses. Like your car breaks down but now you also have the rest of that GPU and tv to pay off. And then you can't, and you get screwed. Nothing good comes from trying to use a credit card like this, because life is unpredictable.

Rather budget properly and save than spend money you don't have on stuff you don't really need.

I get your point. But no two people are the same. In my case and knowing my financial situation, I'd never try to put too many things on my credit card. I'd rather get the tv and after 3 months get the GPU or fix the car(if I had one)

 

[Chester009]

If you don't listen then you become another money-spinner for the banks.

Who says I'm not listening? Why did I ask this question then? Obviously I wanted to get some opinions and see if what I was thinking is possible or not.

 

[r4nd0m]

Here's the deal, I've never had a credit card or taken a bank loan and I've always saved up for 2 to 3 months when I wanted to buy pricey things in cash.

Look the guy is obviously a saver (or so he says). I'm not sure if he fundamentally understands his good habit, but he saves nonetheless.

@Chester009, a credit card when used correctly and paid for in full at the end of every month, is an invaluable tool for daily life. Combine it with a rewards program and you definitely have the possibility of coming out on top.

The problem is paying things off over longer periods as you'd possibly negate any savings you would have had buying the item by way of interest charges.

Try and ask the store if they have interest free repayment plans (typically 6 months or less) as this would be a better avenue to pursue.

Also you don't seem to fully understand how credit cards work, so I recommend doing some research in that regard.

Good luck.

 

[mister]

Who says I'm not listening?

I said IF you don't listen THEN you become.

Listening? but not reading?

 

[rietrot]

Yes. That's how most grownups use a credit card.

 

[backstreetboy]

Always great to have a CC just settle it monthy.

 

[zerocool2009]

A credit card teaches adults to work wise with money. Take note of the month fees to have a credit card. Not all banks charges it

 

[SauRoNZA]

Credit cards can be a slippery slope.

Not having one means no slope at all.

I know which one I would choose, even as someone highly disciplined with my finances.

 

[cr@zydude]

A credit card teaches adults to work wise with money. Take note of the month fees to have a credit card. Not all banks charges it

I only know of the Virgin Money credit card not charging a monthly fee. Which other cards do this?

 

[Gtx Gaming]

Ya get one as backup and good deals.

Discovery gives pretty good rates and interest rates are dropping again today.

 

[Mystic Twilight]

I

I get your point. But no two people are the same. In my case and knowing my financial situation, I'd never try to put too many things on my credit card. I'd rather get the tv and after 3 months get the GPU or fix the car(if I had one)

Actually debt defaulters are largely the same, thinking about how they are immune to overspending just before their debt snowballs at varying degrees of rapid. Be careful here, if you're already thinking about how you can justify offsetting the interest charged with monthly repayments because you bought something on "special" with the price difference, you're going to just set yourself up for a revolving debt trap when you start hitting on buying frequent specials before you have paid off the previous special.

Getting a credit card is not a bad idea, justifying your debt repayment plan may be a bad idea (especially if your disposable income is not high enough to absorb sudden expense shocks).

 

[themba990]

Forget the credit card, there’ll always be another deal and the used market is also a great place for bargains.

 

[KhoisanX]

Credit is a powerful tool if you use it correctly. A simple example is dumping your salary into your bond and using whatever credit facility for your monthly expenses. As long as you're disciplined and settle in full each month it doesn't cost you anything and saves interest on your bond. Credit cards generally have better rewards programs too.