Walletally's Credit card Reviews
Credit Card Basics
Grace N
August 30, 2016
What is a credit card?
A credit card is a tool that is essentially a short term loan, which you can use to pay for goods and services that you have to pay back to the credit card company at pre-agreed terms . With some credit cards, the terms can be,if you pay your balance off in full at the end of the pay period you can do so without paying interest. If however you do not pay the loan back in time then you can accrue finance charges. Its is very important to know the credit card terms just so you can be aware of the hidden costs that are associated with the cards and do your best to avoid them.
What is a credit card?
Credit cards if managed correctly are a good way to start building your credit profile which is essentially a record of your financial behavior, having a good credit report allows your to qualify for loans for example for a car or a mortgage at possibly favorable rates in the future.
Some helpful tips to help manage credit card accounts and build your credit history:
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Pay all your credit card balances every month- here is why, with most cards if you pay your full balance then, you do not have to pay interest on the loan, pay periods range from 0 to 55 days, it is important to note what the pay period for your card is and the interest rate charged on balance The current Kenyan cards on the market charge between 0 to 4.5% monthly interest.
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Pay your credit card bill on time- Most companies will slap on a late payment fee if pay the bill late, some banks will charge a minimum flat fee of 500 and others charge 10% late fee to your bill.
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Try not to get cash advances with your credit card. Most Kenyan cards are currently charging between 4 to 8% on cash advance, you can avoid paying these fees by charging your items rather than withdrawing cash to pay for the items.
To reap the benefits of having a good credit report, one needs to be disciplined and responsible with the use of credit. Always make sure you have a good understanding of the fees associated with the cards, keep your balances low so that they are manageable and remember always that credit is a loan, that needs to be paid back on time and in full or it will cost you in fees and interest.