Credit cards have become an indispensable method of transacting for most South Africans. In restaurants, supermarkets and retail stores, this sliver of plastic appears at the point of sale far more frequently than hard cash. And with good reason too. Not only is it more convenient, but flashing your credit card instead of flashing a fat bundle of bank notes, is a great deal safer besides.

But, credit cards can be useful in other ways as well. One of the often overlooked applications of a credit card is that it can be a useful tool to help you get a better handle on your monthly expenses and, while doing that, make a more efficient personal finances manager out of you.

The first is that when you charge all your bills and purchases to your credit card, you will have a permanent record of your expenses in the form of your credit card statement - faithfully kept and faithfully printed by your credit card issuer each and every month. Although you will still end up with a few transactions that cannot be charged to your card, the bulk of your payments will be consolidated into one, single payment - that of you credit card bill.

The second is that by having a complete record of all your spending, you will be in a better position to manage expenses. At the end of a period, say a year, you can analyse your expenses to gain a better understanding of your spending patterns. This will not only help you to address problems, but also to improve on the way you budget going forward. If you incurred any non-credit card expenses, you can easily access the bank account you used to obtain those records.

If the possibility of using your credit card for monthly expenses has piqued your interest, here are a few tips that might be helpful along the way.

Drawing up a monthly budget is essential. By establishing limits for your spending (and having the discipline to stick to these), you will be in a better position to avoid charging more than you can repay in full every month.

• First take care of all your bills - telephone, utilities, mortgage repayments, car payments, etc.;
• Then necessities - food, medicine, etc.; and
• Finally, other variable expenses - entertainment, books, etc.

Add these up and compare the total to your monthly income. Adjust where necessary and set your limits.

Make a point of keeping a close watch on your performance throughout the month. If you use your online banking facility, you will be able to do this quite easily.

Although paying for your day-to-day necessities and variable expenses by using your credit card, requires no extra effort, bill payments are a different kettle of fish. You will need to check whether your credit card supports bill payments and, if it does, which of the bills accommodate credit card payments. The more bills you can pay in this way, the better.

Don’t forget to keep a close watch on interest free grace periods, credit card fees (especially over-limit penalties) and interest rates. Do bear in mind that interest free grace periods sometimes only apply to purchases. Be sure to check what the rules pertaining to your specific credit card are.

If your credit card does not support bill payments, does not offer some sort of a rewards programme, charges high interest rates and levies unreasonable fees, it is probably not suitable.

Identifying a card that meets your requirement is always worthwhile undertaking.

Applying your card to help manage your personal expenses better, has merit. All it requires is having the right card, enforcing strict fiscal discipline, and using your credit card wisely.