Tips for millennials on managing their credit cards
If you’re just graduating from university, you’re probably beginning to realise a couple of things: Mum is no longer going to schedule your dentist appointments and Dad is about to be a lot tighter with his credit card.
Okay, so you may have been a little more independent than that to begin with, but now you’re really about to be on your own. Are you ready?
Getting a credit card is one of the most useful steps recent grads can take to bettering their financial future – assuming it is used appropriately, of course. Australia’s credit card debt clock, a report released by the Australian Securities and Investments Commission (ASIC) revealed that Australia owes $32 billion in credit card debt equalling about $4,300 per citizen.
We’ve got some tips to help you get started on the right financial foot so you don’t drop into debt when you’re first starting out.
Know your credit limit before you spend
After you’ve sorted the best credit card that’s going to work with your lifestyle, make sure you know exactly what your credit limit is. Maxing out your credit card is no good for your credit history down the line. This means that you’ll have to be aware of how much you’re spending and if you will be able to pay it off come the end of the month so you can avoid paying interest.
Pay on time
Now that you know your limit, you should try to pay off the bill in full once it comes, but if not, at the very least pay more than the minimum so you can minimise the interest you pay because you will be charged if you don’t pay off your card in full by the due date. If you make a late payment it’s not only going to hurt your credit history, you can also get charged late payment fees. This means that when you’re first starting out, it’s best to make sure you’re only making purchases that are within your budget.
Keep an eye on it
Cyber security is something everyone – even massive corporations – have to be aware of. Be smart about where you use your credit card, as hackers who get a hold of your card information could destroy your credit history. You should get into practice of checking over your account details to ensure that all the purchases make sense. For the most part, banks will warn you if something seems off, but it’s better to be safe than sorry.
Need a hand in sorting your financial freedom? Contact our expert team here at Beyond Bank Australia and let’s get to work ensuring you have a stable financial future.