Money

Credit card budgeting is difficult

Credit cards can be beneficial when used wisely or can lead to financial woes for some.
Credit cards can be beneficial when used wisely or can lead to financial woes for some. Lee Constable

CREDIT card... friend or foe? The answer can be found in the way they are used.

DGL Financial Solutions financial adviser John Valentine said credit cards were a convenience tool, which should be considered as part of a person's financial assets.

"Only if used properly... they are also a dangerous tool if used incorrectly," he said.

First do a household budget, Mr Valentine said.

"Know what money you've got coming in and what your overhead costs are," he said.

The important thing is to ensure you always have enough money to pay the bill at the end of the month - easy in theory, but it can sometimes be hard in practice.

"If you have money in the bank to pay that bill when it comes, it's not so bad," Mr Valentine said.

"If you are spending money you don't have, you can run up to the limit without realising it."

Credit cards should not be looked on as easy money; in fact, you are borrowing money on a temporary basis and if you don't pay it back on time you will be charged interest.

Mr Valentine said cheap rate cards might be appealing because of the low interest, however, that interest generally starts from day one.

The higher rate cards, on the other hand, usually give you up to 55 days interest free, he said.

"They're the ones to use. Pay the bill by this date... if done so, you don't pay any interest at all," he said.

Despite their convenience, Mr Valentine said people in their early 20s are opting for debit cards and spend their own money rather than apply for a credit card.

So what is an appropriate limit?

It really depends on your circumstances and your income; are you living at home or paying rent? Do you have other debt?

"They are sometimes too convenient," he said.

"You are spending money you may not have."

Mr Valentine said first-timers should go for a low limit.

"Something where you can't get in a lot of trouble with," he said.

"With my sons, I suggested they start with a $1000 limit."

Mr Valentine said it was common for people in their late 20s to have $30,000 on a credit card, as well as a car loan and a finance loan.

"You've got to respect the credit card for what it is," he said.

Topics:  budget, credit card




Demolition of the South Grafton depot site begins today

Clarence Valley Mayor Richie Williamson, Ian Feek, from project manager Ridgemill, Clarence Valley Council general manager Scott Greensill and Shaun Spry and Matt Hunter from Hutchinsons Builders at the South Grafton super depot site on Tuesday.

Demolition work on the council super depot is about to begin.

Overcrowded North Coast schools packed to rafters

NORTH Coast schools bursting at seams with too many students

Totally addicted to bass, and perch

Urunga fisher Sam Taylor with his personal best Australian Bass.

Three-month closure end on Thursday

Latest deals and offers

Taylor Swift dismissed from jury duty

Taylor Swift was dismissed from jury duty in a sexual assault case

Zumbo's Willy Wonka hat trick trips up Queensland brickie

Adriano Zumbo and Rachel Khoo with Zumbo's floating dessert in a scene from Zumbo's Just Desserts.

NOOSA'S Michael Basset asked to recreate floating chocolate dish.

John Lennon's killer denied parole for 9th time

John Lennon

John Lennon's killer has been denied parole for the ninth time.

Mexican band takes aim at Trump

Disguised as unhinged narcotraficantes, the Mexican-American agitators of BRUJERIA captured the mood of the citys minorities with the bands infamous and widely banned 1993 debut, Matando Geros (Killing White People), quickly becoming the Spanish-language counterparts to early grindcore masters TERRORIZER and NAPALM DEATH.  Photo Contributed

'Satanic drug lord' band challenges Trump

Willy Wonka star, Gene Wilder dead at 83

A still of Gene Wilder in the 1971 film Willy Wonka and the Chocolate Factory

Social media has already lit up with tributes to the late actor.

Falls tickets go on sale

Cold War Kids wow audiences at Falls Festival in Byron Bay despite the soaring tempratures and humidity. Photo Marc Stapelberg / The Northern Star

General sale starts at 9am

REVEALED: Pat Rafter's $18m Coast house on the market

Check out the photos of the Coast's most expensive property for sale

The "correction we had to have" in Gladstone's rentals

UPWARD MARCH: The rental vacancy rate in Gladstone has improved for the first time in more than a year, providing a confidence boost in the market.

Vacancy rates improve with signs that things are getting betterF

ISLAND FOR SALE: Cheap Fraser Coast island drops price again

Suna Island in the Great Sandy Strait will be auctioned by Ray White Hervey Bay on Saturday morning.

This is the cheapest island you will find for sale in Australia

How a family home can fit on a 250sq m block

This is what you can build on 250m2.

Here's the floor plan of a home built on 250sq m

Investors eye Gladstone's $4m island with resort approval

UP FOR SALE: Turtle Island is on the market.

CHINESE and Sydney investors flag interest in Gladstone island.

Take a sneak peek at this $19m Whitsunday mansion

Mandalay House features a private helipad.

Mandalay is currently on the market with an asking price of $19m