How to use a credit card to your advantage

New Zealanders owe a fair bit in credit card debt – but they are such a useful way to manage our purchases.

Nevertheless if you are not disciplined and find your credit card too tempting then you might be better off cutting up. Credit cards can get you into financial trouble particularly if you are an impulse buyer. If you already owe money on your credit card then paying it off should be your top priority.

But, credit cards are not the source of all financial evil. If you do have the self-discipline to manage your spending then there can be some great advantages to using a credit card.

Here are a few ways to make the most out of your credit card and stay out of debt.



There are many credit cards that have great reward programs. But they need to work for you. There is no point over spending or buying things you don’t need just to get points. So think about how you use your credit card and then choose which program would benefit you most.

Also check if there is an annual fee for the card. Sometimes these can be paid for with points but you need to make sure you would earn enough points in the year to pay off the fee and get something with the leftover points.


Fraud protection

If you are shopping online credit cards can be safer than debit cards. If someone defrauds your debit card they potentially have access to all your cash, leaving you with no money. The risk with a credit card is that they can just max it out but at least you can access your cash while your bank investigates the issue. Most banks have anti-fraud measure to protect your credit cards too.

Make sure you always notify your bank immediately if you suspect fraudulent activity on your cared.



When you are in a rush or shopping with your kids there is nothing easier and more convenient than tap and go technology for small purchases. You don’t have to worry about pins or cash. But impulse spenders beware – it can make it a little too easy to spend!

If you are making a large purchase, such as paying for overseas flights, it can be convenient to use a credit card as you may have a daily limit on your debit card. Make sure you check that there aren’t any additional merchant fees for using your credit card for these purchases as it will pay to phone your bank to have the daily limit increased.


Get a good credit rating

Having a credit card can help you to build up credit history and a credit rating. Ensure that you use it wisely though, so that the value it adds to your credit carting is positive.

How to use a credit card to your advantage

 How to check your credit rating


Near-universal acceptance

If you are travelling overseas then having a credit card can be a safer way to travel and make purchases. Not all debit cards are universally accepted whereas the credit cards are. Always ensure that you do take some cash with you, and a backup card as well though, just in case!


So, if you have good self-discipline and don’t spend more than you earn then a credit card can be a useful financial tool that you can use to your advantage.

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