Getting Educated about Credit Cards

Credit cards can be a convenient way to make purchases but they can be costly if they are not used with care.

Fees and Interest

Credit cards often attract a foreign transaction or currency conversion fee when used overseas. Interest rates are another factor to be careful with. If the entire amount is not paid off by the interest-free period, the outstanding amount will attract an interest payment, which can be more than 20% a year.


Surcharges often apply to credit card payments, such as those for flight bookings or taxi rides. Rewards programs may seem attractive but these cards tend to be more expensive.

Understanding the Minimum Payment Amount

Some credit card users do not understand that paying the minimum amount on the card does not cancel out interest charges on the outstanding amount. Additionally, penalties can be payable if the minimum amount is not paid by the monthly due date.

As such, students and those with smaller incomes should probably opt for debit cards instead of credit cards. Before signing up for a credit card, always compare products and understand the associated annual fees.


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