There are a few credit card tips and tricks for those of us using a credit card for the first time. We’ll talk through some of the do’s and don’ts to make sure you’re using your credit card wisely.


Keep track of your spending

Whether this is in an app, receipt diary or simple excel spreadsheet, find a method that works for you so you’re aware of your outgoings. This is also a great exercise for budgeting purposes.

Pay off your credit card on time

A good financial institution will do more than just approve your credit card application. They’ll explain to you the statement cycle and how the interest free period works on purchases. When you receive your statement, take note of when your repayment is due and pay early to avoid extra interest or overdue fees. Ask your financial institution to set up a direct debit or a payroll split so you don’t have to make a manual payment every month.

Maximise your credit card repayments

Paying more than your minimum monthly repayment is always a good idea to bring down your outstanding balance (often referred to closing balance on your statement) and pay less interest over time. Use our budget calculator to see how much you can afford to allocate on repayments.

Set the right credit limit

Again, a good lender will correctly assess your ability to repay your credit card repayments and will assist you in choosing a suitable credit limit that won’t tempt you to overspend. A good rule of thumb to avoid getting into more debt is to spend less than you earn.

Check your credit card statement

Statements are a great visual tool to see how much (and how often) you’re spending money. Always check your credit card statements for anything that looks unusual, and if you see something that doesn’t look right, contact your financial institution immediately.


Increase your limit if you don’t strictly need to

If you need to make a large purchase sooner rather than later, pay off that purchase as soon as your can then bring your limit back down, to avoid more debt.

Make cash advances a regular habit

Examples of cash advances are things like using your credit card to withdraw money from an ATM. Your financial institution should provide you with a list of what they consider to be cash advances on your credit card. These transactions can be charged at a higher rate and attract fees for the convenience of accessing the cash quickly.

Use credit to get by

A good thing to keep in mind is to use a credit card for things like emergencies and travel. Unfortunately, living off credit without controlled spending and repayments can land you in more debt in the long run. Allocating a portion of your income for bills, food, rent/mortgage and savings takes practice and self-discipline but services such as financial counsellors can help with managing your finances. See ASIC’s Money Smart website for information on financial counsellors.

Looking for smart advice on how to use a credit card? Get in touch with us today.

The content in this article has been prepared by Horizon Bank for general information only and it is not intended to be professional advice. It does not take into account your objectives, financial situation or needs. You should seek your own legal, accounting, financial or other professional advice where appropriate, and consider the relevant General Terms and Conditions before deciding whether to acquire any products or services offered by Horizon Bank and/or its affiliated partners. We do not recommend any third party products or services referred to in this article unless otherwise stated and we are not liable in relation to them. Any links to third party websites are for your information and we do not endorse any content on those sites. Horizon Credit Union Ltd ABN 66 087 650 173 AFSL and Australian Credit Licence Number 240573 trading as Horizon Bank.