Are you on the lookout for plastic? Whether you are interested in a first or new credit card or looking for a debt-safe alternative via a prepaid card, this is the area to find out more.


Credit Cards

What is a Credit Card?

Credit cards are one of the most popular financial products on the market and they are widely used and accepted across the world; it is difficult to imagine a world without them. Often referred to as 'plastic money,' in essence, a credit card allows you to borrow money from the card issuers which you pay back later.

Credit cards are an essential product and as such there are many providers to choose from. We have made it easy for you to compare some of the leading credit card providers in South Africa.

How do Credit Cards work?

A credit card can be used to make payments online, in shops, restaurants and gas stations just to name a few. Each purchase is recorded and the cardholder is billed later by the card issuer. Essentially, if you get a credit card you are given a line of credit which is effectively borrowing money. Once a month you will receive a bill for all the purchases you have made. All credit cards have a credit limit which is the maximum you are able to 'borrow' from the card company. This limit is agreed upon by you and the card provider. It is also subject to change and will depend on your individual circumstance. The better your credit record, the higher the credit limit you are likely to be granted.

Types of Credit Card

Credit Cards are used by thousands across South Africa. There are many types of different credit cards that are aimed at specific types of people. Types of credit cards include:

  • Standard Credit Cards
  • Business Credit Cards
  • Student Credit Cards
  • Reward Credit Cards

Interest Rates

Every credit card carries an interest rate which is the amount that the card issuer charges you for carrying out purchases and cash advances. In South Africa the Annual Percentage Rate (APR) or general interest rate over a year, is determined by your income and credit history.

The Benefits of Credit Cards

Credit cards are easy to get hold of and are accepted worldwide. They offer a very practical way of carrying 'money.' So long as you manage the card correctly they can be a great way to make an initial payment or deposit on significant purchases such as property or vehicles. The credit allows you to make a payment which is perhaps much larger that the amount of money you actually have; they can give you a greater level of financial freedom and can improve your future chances of borrowing.

At some point you will receive an interest free period where you not be charged for making balance transfers or purchases. There are lots of great introductory offers out there but make sure you check what happens once this period is over.

Credit cards are very secure modes of payment. The card is unique and you can have it replaced quickly if it is lost or stolen. You also are better protected on your purchases than with other cards.

Are there any Disadvantages?

With a credit card if you fail to pay your bill you will have to deal with interest charges and could fall into debt - you must be sensible as credit cards are easy to lose control of. Not using the card correctly could negatively affect your credit score, which could affect you in the future when applying for financial products. As you can spend money that you don't actually have credit cards can encourage spending so watch out.

With credit cards you need to watch out for additional fees and charges. You might be charged for withdrawing cash from an ATM with a credit card. You may also find that many credit cards carry an annual fee which will vary according to the card type and provider. With this in mind you should make sure you read all the terms and conditions and be clear about what is really involved. If you have any questions make sure you ask them.

If you are concerned about the debt risk involved with a credit card you might want to consider other forms of payment cards.


Please note that Which Way To Pay South Africa is not authorised to give personal financial advice under the South Africa financial regulations.

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