Credit Cards

The credit card is plastic fantastic, a flexible and convenient way to pay online, buy things over the phone and make purchases that can be paid off at a later date. It's essential, though, to manage your credit cards well – New Zealanders currently have a hefty $4.5 billion dollars worth of credit card debt. To avoid high credit card debt, follow our simple guide to using your New Zealand credit card well:

• Pay off your balance in full every month – the longer it takes you to pay off a credit card debt, the more expensive it will be, so make sure you'll be able to pay off your full balance at the end of the month.

• Find a low interest rate – interest rates vary from bank to bank, and from one credit card to another, so pick one that has a low interest rate. That way, if you do have a month in which you can't pay off your credit card, the damage won't be so great.

• Cap your credit limit – don't go for the biggest limit the bank offers you. Instead, form a household budget and place a credit card limit that's in line with what you can realistically afford. This will prevent your debt from spiraling out of control.

• Check your fees and perks – your credit card will have an annual fee and other associated costs, so make sure you know what these are before you sign up. Look for currency conversion fees, late payment fees, over-limit fees and cash advance fees. There are also perks, such as reward schemes and interest-free days. These are great, but be sure to read the small print.

• Don't withdraw cash using your credit card – although you can get cash advances through your credit card, banks will charge high fees for this service. The amount you withdraw will also incur a high interest rate immediately on withdrawal.

• Budget! – to avoid money stresses, make a household budget. If you find that your credit cards are forcing you into temptation, reduce the number of credit cards you have, lower your credit card limit or leave the plastic at home when you shop.

• Get help with debt – your bank may be able to suggest ways for you to get rid of your credit card debt, such as taking out a low interest loan to pay off the amount owing on your credit card.

Looking for more information? Find New Zealand credit cards in the NZS.com directory.

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Business images from Flickr: Sky Tower, New Zealand Flag and Wellington Buildings.