However I know recomend a capitec account instead. You have the great interest rate, and all debit transactions are free so you still have the benefit of low fees that a very disciplined person would have on the credit card.

My salary know goes into my interest earning capitec account instead of my previous non interest earning cheque account.

All my monthly debits are set for the 5th of every month so I now earn interest for about 10 days on these amonts before they are deducted. This interest exceeds my monhtly transaction/banking fees.

Previously my cheque account was costing me between R100 and R200 per month and earning me no interest. My Capitec account now averages around R26 per month in fees but earns more than that in interest. I’ve now also recently started using my Capitec card as my petrol card (except for tolls) to gain further interest on the money I set aside for fuel every month.

Thanks for your insights!

And you’re right, it is possible to “make your credit card work for you”. I also follow this philosophy. Here is an explanation (it’s a bit technical, I apologize!!).

I have a credit card, but I pay the outstanding balance in full at the end of each month. This is the most important point – you have to settle your outstanding balance in full each month.

I also have an investment account (as you call it – my BOE online share trading “cash” account), where I always keep more cash than the money I spend on my credit card, and I earn 10%+ interest on the cash (tip: you don’t need any minimum balance with BOE).

Because the first 55 days are credit free, I’m effectively earning interest on money I’ve already spent (because I owe on my credit card interest free, but have the cash in my “investment account” where I’m earning interest), until the balance is paid in full at the end of the month. This is a small amount (usually less than R50 I’d say), but it’s money for doing nothing.

However, it takes a lot of self-discipline to manage your money this way. I carefully track and record everything I spend with my credit card, and when I buy something I always make sure I know – I am spending my own cash, this is just like buying with real bank notes.

The thing is, psychologically it is difficult for many people to feel like they’re spending their own money when buying with a credit card. I’ve found myself paying more for something that I should have, and realizing it later, even though I try to force myself to think twice about it.

The type of discipline you need to have with using a credit card comes naturally for a few people, but for many people it does not.

If you have this type of discipline, to think carefully about everything you buy with your credit card, track your expenses, and pay the outstanding balance in full at the end of each month, then fine.

But I’m still of the same opinion: For the average person, it is better to not have a credit card at all, thereby removing the temptation.

This is not a get rich quick trick, but if you can manage this cycle, you are not part of the typical debt trap.

Using a credit card in SA has a huge financial benefit over a debit card in that you don’t pay a R2+ fee every time you make a purchase.
Some credit cards also have lower fees for banking overseas (if you plan to travel)

Utter hogwash.

Banks will fall over their feet to get business from you by giving you loans, whether you’ve had a credit card or not.

And to me it’s a ridiculous argument: make debt so you can make more debt.

If you really want to become wealthy and financially free you should avoid debt as much as is possible!!!