Managing Credit
Credit is a financial tool that can offer convenience and financial flexibility. But, like any tool, it works best when managed responsibly and with caution. Control your credit, don’t let it control you.
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How do I manage my credit responsibly?
A good first step to manage your credit responsibly is to manage your money responsibly. Here are some practical tips you can follow:
- Create a budget to manage your expenses-and stick to it. Refer to the FSA Moneymadeclear website for useful tools to help with budgeting
- Be realistic with your spending
- Keep track of where you spend your money - saving copies of your receipts will help
- Save up over time for large purchases instead of buying them on credit
- Keep credit card balances low - even better, try to pay them off every month
How do I borrow responsibly?
Borrowing responsibly means paying your bills on time and not taking on more debt than you can handle. Here are a few practical tips:
- Use your credit for planned purchases that fit into your monthly budget and avoid making impulse buys for bargain-priced items.
- It is not wise to finance purchases longer than the lifespan of the product you are buying. Financing a car over a long period is fine but everyday purchases should only be financed for short periods.
- Avoid approaching or reaching your credit limit. Not only will you save on monthly finance charges, youíll also be keeping credit available for when you need it most.
How do I know if my borrowing is getting out of hand?
Here are some warning signs. If any of these apply to you it may be time to take a fresh look at your financial situation or seek professional financial assistance.
- You’re consistently paying your bills late and making only the minimum payment each month.
- You find yourself surprised by the number of new purchases on your statement each month.
- You’ve reached or exceeded the credit limit on one or more of your accounts.
- You need to take on overtime work, or even a second job, just to make your monthly debt payments.
What can I do to protect myself?
Unpredictable events can be expensive and usually happen when you can least afford it. That’s why we offer insurance products to protect you should the unexpected occur. Our LifestyleProtect can cover your credit card payments against accident and sickness, unemployment, carer services and hospitalisation. Our Card Protection insures and protects all your plastic cards, your passport, driving licence and your keys. Our Identity Protection can help protect you against identity theft fraudsters.