What do you get when you cross the National Credit Act with an uptrend in repo rates?

There will be no witty answers forthcoming from the credit card issuers on this one. As a matter of fact, the answers are more likely to be a gloomy: "The growth percentage on credit card applications is on the decline.", or a "The number of approvals is decreasing." And, with credit cards being big business in this country (R40 billion in credit card debt), the dim expressions on the faces of the issuing banks can certainly come as no surprise.

If you have a sound credit history (or perhaps no credit history at all), you are likely to be high on their Most Wanted lists. Perhaps then there is no better time than the present to capitalise on this temporary weakness. However, regardless of whether you are an old hand at the credit card game or a newbie to the world of plastic, you may want to remind yourself of the pitfalls you are likely to encounter along the way:

Being an informed credit card holder does not hurt – ever. In fact, it will prevent unnecessary injuries along the way.

Misery v Mastery

Fees, charges and interest rates in particular have left many a credit card consumer miserable. As 99% of the credit cards on the market today come with an average of twenty (or more) different rates and fees, you need to become more than just a little credit savvy. Although understanding the rates and fees and knowing how the puzzle fits together may be difficult, it certainly is an achievable goal.

When you start card hunting, be sure to look for the following items:

• Annual fees
• Loyalty programme Fees
• Internet banking fees
• Cash withdrawal fees
• Deposit fees
• Late payment and over-limit fees
• Interest rates – both on positive and negative balances

These beasts can leave their teeth marks on the complacent. To give you an idea: some banks charge more than R200 a year for internet banking fees; others only pay 0.25% interest on positive balances, while others still chalk up in excess of 30% in interest on your negative balances; Then there are those who will gladly stump you with a R400 annual fee and burden you with exorbitant transaction fees, just to be sure. Forewarned is forearmed.

All that glitters is not gold. To put it plainly, that gold credit card being held under your nose, promising to reward you for being such an outstanding and exemplary banking citizen, is more likely an opportunity for you to pay more for being such a terrific customer. There is hardly ever an upside. You pay more everything – full stop. You do not get better anything – exclamation mark. If you do not qualify for platinum, consider sticking to the classic cards.

Regardless of how alluring those air mile rewards or loyalty points may seem, remind yourself that at the end of every fishing line, a piece of bait obscures the barbed hook it carries. An example: You will pay approximately R160 per annum to belong to an air miles club. You will have to spend anything between R 99,000 and R 330,000 to earn yourself one free domestic return ticket. And, don’t think that you will eventually get there… Many of the programmes sport little-publicised mile expiry dates, blackout dates and blocked-out flights.

There is no such thing as a free lunch. Even if no membership fees are involved in the loyalty programme, there will be some means to claw back the expense somewhere along the way.

Once you understand the rules of this game, you can actually turn it to your advantage. You can profit from the interest free grace day period offered by the issuer, making your credit card work for you like an interest free loan; you can settle your balance in full at the end of every month to avoid paying interest; you can dodge unnecessary charges to ensure that the credit card costs you next to nothing.

Not that this game plan will appeal to your credit card issuer, mind. But then, the credit card game is a game of inches. And, considering that the prevailing winds are blowing in your favour, you might as well make use of the few extra inches you have gained.