It pays to shop around for credit: the fees and interest rates charged by different banks on their credit cards can vary considerably.
The average interest rate charged by the banks on unpaid debit balances is 27,42 percent on a regular credit card and 26,67 percent on a gold or prestige card. Either way, you're paying about seven percent more than the prime overdraft rate most card-holders will find it cheaper to run up an overdraft than paying less than the full amount of their credit card bill.
But, if you are disciplined enough to pay in full each month, a credit card offers many advantages. It's convenient, safer than carrying cash in your pocket and you receive up to 55 days of free credit.
You also get a host of supplementary benefits like overseas travel insurance provided you buy your air ticket on your card and special offers.
The latest trend in card benefits is to offer incentive or reward programmes to encourage you to use your card even more.
The more you spend on your card, the more points you get towards SAA air tickets, in the case of Nedbank. Or your can have a "gift" from wine to an overseas holiday from Standard Bank and First National Bank. Absa, which houses Allied, Trust, United and Volkskas banks, is also developing their incentive programme.
But, participation in your bank's incentive programme may cost you: Standard Bank charges you R35 a year to join their Accolades programme and Nedbank's annual charge to join their air miles programme is R49. In both cases, gold and premier card-holders pay more.
A credit card is a useful vehicle for housing a short-term cash deposit.
The average interest rate paid on a regular credit card is about 11,5 percent. But watch out, by depositing your money in your card account, you run the risk of turning your credit card into a debit card, because the bank may set off any purchases you make on your card against the amount deposited.
You can withdraw cash from your card up to the daily withdrawal limit set by the bank but this will cost you interest from the date of withdrawal. The commercial banks differ too on the annual card fee and transaction costs they charge. The average annual fee is R40 for a regular card and R86 on a gold card.
Transaction costs vary widely among the banks some even charge when you deposit a cheque into your card account. The cost of buying goods and services on your credit card went up last month with the government's imposition of stamp duty, which is now levied at 20 cents on each transaction.
Apart from the high cost of credit card debt, plastic money carries another big disadvantage: It's too easy to use, which can lead to overspending in all but the most disciplined of users.