Author: Alter Sage The recession is big news worldwide and affecting every household on a global scale. In Europe and the USA, the resulting credit crunch and calling in of outstanding debt has crippled economies and driven many businesses to bankruptcy. Applying for credit is not an easy feat in these areas and a low credit score is far more detrimental to a person's chances of credit approval than it was two years ago. South Africa has managed to remain with its head somewhat above water thanks to a relatively stable banking structure and lower private debt, although the country is definitely feeling the heat of the recession. Redundancies have been initiated and prices have soared, especially food prices which have risen to a 17.3% increase recorded in December 2008. Overall, these conditions mean that South Africa has one of the stronger economies in the world, but is not unaffected by the recession. Owning a credit card during a recession is frequently labelled a major personal liability. Yet in South Africa, owning a credit card is not as much of a risk as believed. The countrys relatively stable economy means that credit cards are very manageable during this time, if parameters are set and the card owner remains sensible about managing their card spending and payments. Credit cards have many positive features yet a recession makes those hard to appreciate. These tips are a basic guide to managing your credit card safely during the recession. 1. Look after your credit rating Keeping your credit rating in the clear should be your main focus during this period. Paying bills late (or never!) and spending over your credit limit will damage your credit rating. 2. Compare credit cards before choosing an option 3. Re-evaluate your existing cards: If your credit cards are not fulfilling your financial needs, cancel them and shop around for a better one. I hear you: “Easy for you to say; I still have an outstanding balance on my credit card!” But even for this there is an answer. Many financial institutions now offer a Balance Transfer option on their credit cards. This offer entails taking over the cardholders “old” debt and allowing him to repay this amount at a much lower interest rate. Make your credit card work for you – as previously mentioned, credit cards have a long list of positive attributes that are hard to recognise in a recession. 4. Do not over spend or make frivolous purchases: If you don't have the money, do not think that it is fine to spend it on a credit card. You will end up having to repay the amount, plus extra, leaving you more financially burdened than when you needed the credit to pay for what you could not afford. 5. Pay your bills on time: If you cannot afford to pay off the entire outstanding amount on your card, pay more than the minimum requirement every month, which will not only see you paying off your debt quicker, but you will save on interest too. 6. Keep your spending to below half your credit limit 7. Don't use credit cards to help you out of financial difficulties 8. If you are in financial trouble – call your card company and tell them If you are in financial trouble, call your credit provider and work out a repayment plan which is manageable for you and stick to it no matter what happens. Most financial institutions are reasonable and will appreciate an honest request for help far more than having to chase you down for your card payments. Surviving the credit crunch in South Africa is primarily a matter of self control. Your credit rating is a priority for your personal financial health. If you cannot afford something, do not buy it. Remain organised, informed and reliable with your credit account and always ask for help if you are slipping into dangerous territory. About the Author: Plastiq offers information and advice on a selected range of credit cards and allow visitors to compare credit cards from the cards featured on their site. Article Source: ArticlesBase.com – Credit Cards and Surviving the Recession  Related ContentPost a comment
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