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How should I manage revolving credit?

The correct set-up is critical.

Follow these simple steps for the easiest and most effective way to manage revolving credit.  It is well worth spending a little time setting things up so you get the full benefit.

 

Income must be paid to revolving credit account

Ensure your earnings are paid directly to your revolving credit account. 

 

Set up direct debits

This is a critical aspect of managing the account effectively. 

  • Direct debt other loan payments from the revolving credit account. 
  • Direct debit your credit card repayments so that the card is repaid in full each month.  Your card must be repaid in full, on its due date, every month otherwise the system fails.

 

Use your credit card

This is also a critical aspect of managing your revolving credit effectively. 

  • Direct debit your utilities (phone, power, gas, television, internet etc etc) from your credit card. 
  • Use your credit card for most, if not all, your purchases each month.  There are no transaction fees and most credit cards offer rewards based on spending.  

 

Minimize your use of EFTPOS and cash

This is not as critical as the other set-up items above. 

  • Money you withdraw from your revolving credit account will incur interest. 
  • Your credit card will not charge you interest if it is repaid in terms of the set-up described. 

 

Set and forget is the simplest approach.

With your account well organized at the start, and direct debits set up so you never miss a payment or get charged interest, you can relax and let the system work for you.  It will save you money by using your income to minimize the interest charged on your mortgage.