Credit Card Do’s and Don'ts

Credit Card Do’s and Don'ts

Bottom Line:

A credit card can be convenient to use when you’re facing unexpected costs such as an excess on a private health bill. Make sure to pay off the balance on time, pay higher than the minimum repayment, and not make cash withdrawals. Moreover, make a budget you can stick to and do your research. Lastly, know your credit limits and your spending limits and try to avoid overspending.

Key Takeaways:

  • When you’re looking for a credit card, it is best to have an idea of how you intend to pay off a credit card before getting a new one.
  • Make sure that the card that you’re getting has a low interest rate and includes features that will actually benefit you.
  • Setting up an automatic payment means that you won’t accidentally incur late fees if you forget to pay your credit card.
  • When you use a credit card to withdraw cash at an ATM, this is considered a “cash advance,” which can be costly in the long run because banks treat this differently to making purchases with your card.
  • If you are finding it difficult to keep up with your repayments, contact Debt Fix experts who can help you with a personalised solution for your debt situation.


A credit card can be convenient to use when you’re facing unexpected costs. This could be excess on a private health bill, loss in income or emergency surgery for a pet. For many people experiencing a difficult financial situation, a credit card may be the only option to borrow money. In Australia, there are over 13 million credit cards as of November 2021. For these Aussies that have credit cards, they’re balancing a fine line of managing credit and debt. Some use it as a key part of their day-to-day money habits, while other can make unfortunate mistakes that can leave them paying off a large sum of debt.

Everyone has different reasons for using a credit card but understanding how they work is key to keeping your credit healthy. If you’re thinking about using a credit card, you should know what you should and shouldn’t do to make sure you have a solid payment plan in place. Convenience can often come at a price, but the trick is to use your credit card wisely.

Do: Pay off the balance on time and pay higher than the minimum

Setting up an automatic payment means that you won’t accidentally incur late fees if you forget to pay your credit card. If you can, plan to pay higher than the minimum payments. Paying only the minimum can extend the repayment time and cost a lot more in interest. In the long run, timely repayments on your credit may benefit your credit history.

If you have a large amount of credit debt, here are some other tips to help you lower your debt! If you have any problems paying more than the minimum amount, it may be worth speaking to a financial expert so that this doesn’t snowball into a larger problem later in the year.

Don’t: Make cash withdrawals

When you use a credit card to withdraw cash at an ATM, this is considered a ‘cash advance’. Cash advances can be costly in the long run because banks treat this differently to making purchases with your card. Cash advances have a fee, in addition to the regular interest charges. Not only will the fee be added to your credit balance, but you will also have to pay.

Do: Make a budget you can stick to

When you’re looking for a credit card, it is best to work out what you can repay. You should have an idea of how you intend to pay off a credit card before getting a new one. Your budget should outline your daily spending, debt that you owe and how much you can repay until you’re debt free. Here is our budget tool to help you get started.

Do your research!

Find a card that suits your spending. Cards will often have rewards or extras to entice you to sign up, but make sure they are worth it. You will want to make sure that your card has a low interest rate and includes features that will actually benefit you. Companies will often try to entice you to sign up with a lucrative rewards system. Some rewards cards can have a higher interest rate and a higher annual fee. Money Smart has a resource to help you compare credit cards to make sure you get the best deal. Low interest rate cards can sometimes come with an annual fee, so you will want to take this into account when looking at your budget.

Don’t: Make credit card purchases you can’t afford

Make sure you think through the purchases you put on your credit cards. Think about what you really need and if it is crucial. Recognise the warning signs of debt. This could be only paying the minimum, paying your balance late or struggling to pay your living expenses. Know your credit limits and your spending limits and try to avoid overspending.

Start your journey today with the help of a financial expert

At Debt Fix, we want to help all Aussies keep their credit healthy for the long term and beyond debt. If you are finding it difficult to keep up with your repayments, sometimes contacting a financial expert can help. A financial expert can help you talk through your specific situation and come up with a plan that you can stick to. At Debt Fix, we’re here to help you on your journey to keep your finances healthy with a personalised solution for you.