The problem with credit cards is that the temptation to use them tends to overpower their owners' best intentions to restrain their spending.
But with banks pushing electronic payment methods as an alternative to cash, it is very important, if you find your credit card is getting the upper hand too often, that you learn a few control techniques.
If you already owe more on your credit card than you can afford to pay in one month, then you should consider taking a break from using it. Put it at the back of a drawer at home and don't carry it around with you until you are back in control of your finances.
Cutting your credit card up would be a bit silly because if you manage it properly your credit card can be cheaper than using cash. Whenever you make a purchase, the retailer pays the costs, as opposed to when you pay with cash and have to pay bank charges every time you withdraw from a teller or an ATM.
Resist the urge to have more than one credit card and if your credit limit is excessive, ask your bank to lower your limit. It may be comforting to know that you have credit available in an emergency, but if your credit limit is always booked up to the hilt, you don't have anything to tap in an emergency anyway.
If you have not already done so, arrange to pay your credit card by way of a direct transfer from an ATM rather than having to post cheques or stand in bank queues, avoiding the hassle and the possibility of the payment being late due to postal delays.
Always keep your credit card slips and check them against your statements. On at least three occasions,restaurants or retailers have double-drawn on my credit card, sometimes for quite substantial amounts. You can save yourself a few hundred rands a year by being vigilant.
Examine your statement carefully to find out exactly when payment is due and how much. If you settle in full what is reflected on the statement by the due date, you will get the best out of your credit card - up to 55 days interest-free use of the money you have spent. This is because there are 30 days between the billing dates of your credit card statements, and you have 25 days in which to settle your account.
But if you are not settling your credit card in full, you are paying punitive rates of interest on the balance owing. Also, if you miss the settlement due date by even one day, you will have to pay interest on the full amount owing for the whole month.
You can use the "Budget" facility on credit cards as an alternative to hire purchase. The Budget facility allows you up to twice your credit limit to buy items costing more than R300 and to pay for them over a longer period - up to 48 months. But you will pay interest on the outstanding amounts.
One of the problems with overspending on your credit card may be that you are not keeping a running total of how much you have spent in your mind.
This is not difficult, if you take time to sit down, look at your statement and add to it all the credit card slips that you have signed since the statement closed. Unfortunately, up-to-date balances are not as easy to procure on a credit card as on a current account.
Instead of running two separate accounts, a cheque or transmission account and a credit card, you might consider having your salary paid directly into your credit card. You will earn interest on the credit balance, which is usually quite good compared to what you would earn on cheque or transmission accounts.