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Fin24 user and Chartered Financial Analyst candidate Tinashe Guramatunhu continues his tales about entering the working world, his financial ups and downs and the lessons he has learnt. He writes:
Have you ever laid your eyes on that perfect couch? Ever had the responsibility of having to pay for school fees? Remember thinking if only you could have that irresistible pair of shoes or jacket that seemed to be the perfect match to all your outfits?
I have! I just didn’t have the money for it all, but I had a credit card...
If ever I was in a love-hate relationship, it would undoubtedly be with my credit card.
It all started on one fine winter’s day in the middle of August. My exams were coming up and the enrolment fees were soon to follow. I had to find a way to pay my school fees and I took a personal decision not to overburden anyone with those costs. With very little cash in my bank account, I decided the next best thing would be to get a credit card.
This wasn’t an easy decision. In fact, it was one that I procrastinated on for a while until I could wait no longer. I had never taken any debt in my life before. So I strolled into the bank, eyes wide open like a man looking for trouble.
My bank of choice is usually dependent on the services I require and who I think offers that particular service the best.
In this case, I was going to apply for a credit card at the enterprising First National Bank (FNB), the “How can we help you?” guys. So I told them just how much help I needed; school fees coming up, no cash in bank account, need money now situation!
We went through all the charming debt dipping products that they had. I only provisionally qualified for a credit card at the time. One small problem: you need some sort of credit history before they can give you a credit card.
I have always found this to be a strange conundrum of the bank, but once understood it makes sense.
Anyway, I had to open up an account that enabled me to earn a credit score, and off I went to buy work pants and another pair of shoes, this time on credit that I was planning to pay off in a couple of months.
Problem sorted
A couple of months down the line, with a credit score, I walked into FNB again and this time I was able to get a credit card.
Now, I thought my problems were sorted when in actual fact they had just begun! The first thing I did was pay for my school fees and a couple of items. That’s all it took to get into about R10 000 worth of debt.
I now understand, all it takes is one or two crucial events in your life to get there.
Everyone is faced with tough and difficult decisions, often involving some sort of financial impact. One must carefully assess all options and the ramifications of each option.
I often ask myself: did I make the right decision in getting a credit card? Am I going to be able to pay it off? And if so, how?
Lessons learnt
Set a limit on your credit card. Banks often offer more credit than you need or can afford. By setting a limit, you’re protecting yourself from overspending and thinking that you have plenty of cash when in actual fact you don’t.
Discipline. If you are in debt or thinking of getting into debt, one way to get out of debt is to religiously pay back your debt on a month to month basis if needs be. Set an affordable amount that you can repay and stick to it.
If you don’t need it, don’t buy it. Simple as that. Don’t get carried away by the fact that you have some credit lying around; rather save it for a rainy day - we all have one.
Lastly, we all have different ways of getting into and out of debt based on our personalities and behaviour. Do what works for you, and you might just save yourself a world of trouble.
- Fin24
Help us help you by taking our second annual Debt survey and you could win R3 000, or add your voice by sharing your debt experiences, debt-busting tips and insights. Have a question? Ask our experts.
Have you ever laid your eyes on that perfect couch? Ever had the responsibility of having to pay for school fees? Remember thinking if only you could have that irresistible pair of shoes or jacket that seemed to be the perfect match to all your outfits?
I have! I just didn’t have the money for it all, but I had a credit card...
If ever I was in a love-hate relationship, it would undoubtedly be with my credit card.
It all started on one fine winter’s day in the middle of August. My exams were coming up and the enrolment fees were soon to follow. I had to find a way to pay my school fees and I took a personal decision not to overburden anyone with those costs. With very little cash in my bank account, I decided the next best thing would be to get a credit card.
This wasn’t an easy decision. In fact, it was one that I procrastinated on for a while until I could wait no longer. I had never taken any debt in my life before. So I strolled into the bank, eyes wide open like a man looking for trouble.
My bank of choice is usually dependent on the services I require and who I think offers that particular service the best.
In this case, I was going to apply for a credit card at the enterprising First National Bank (FNB), the “How can we help you?” guys. So I told them just how much help I needed; school fees coming up, no cash in bank account, need money now situation!
We went through all the charming debt dipping products that they had. I only provisionally qualified for a credit card at the time. One small problem: you need some sort of credit history before they can give you a credit card.
I have always found this to be a strange conundrum of the bank, but once understood it makes sense.
Anyway, I had to open up an account that enabled me to earn a credit score, and off I went to buy work pants and another pair of shoes, this time on credit that I was planning to pay off in a couple of months.
Problem sorted
A couple of months down the line, with a credit score, I walked into FNB again and this time I was able to get a credit card.
Now, I thought my problems were sorted when in actual fact they had just begun! The first thing I did was pay for my school fees and a couple of items. That’s all it took to get into about R10 000 worth of debt.
I now understand, all it takes is one or two crucial events in your life to get there.
Everyone is faced with tough and difficult decisions, often involving some sort of financial impact. One must carefully assess all options and the ramifications of each option.
I often ask myself: did I make the right decision in getting a credit card? Am I going to be able to pay it off? And if so, how?
Lessons learnt
Set a limit on your credit card. Banks often offer more credit than you need or can afford. By setting a limit, you’re protecting yourself from overspending and thinking that you have plenty of cash when in actual fact you don’t.
Discipline. If you are in debt or thinking of getting into debt, one way to get out of debt is to religiously pay back your debt on a month to month basis if needs be. Set an affordable amount that you can repay and stick to it.
If you don’t need it, don’t buy it. Simple as that. Don’t get carried away by the fact that you have some credit lying around; rather save it for a rainy day - we all have one.
Lastly, we all have different ways of getting into and out of debt based on our personalities and behaviour. Do what works for you, and you might just save yourself a world of trouble.
- Fin24
Help us help you by taking our second annual Debt survey and you could win R3 000, or add your voice by sharing your debt experiences, debt-busting tips and insights. Have a question? Ask our experts.
