Are credit cards really evil?


Credit cards often get a bad rap on account of the many pitfalls awaiting those of us who aren’t great at staying in control of debt, but are they really that evil?

Actually, the credit card system can be worked in your favour. If you use your card for all your transactions but ensure you’re able to (and do) pay its full balance every month, you’ll reap the rewards that credit cards can offer while avoiding paying interest or going into debt.

With the aid of a few shrewd ideas, here’s how you can get the most out of your credit card.

Earn points

Loyalty schemes are a popular way for credit card issuers to reward customers who spend with them. Most banks have some form of reward in place, but the basic premise is that the more you put on your credit card, the more rewards you get.

This isn’t a contradiction of our last post or a license to spend, spend, spend but if you’re disciplined enough, rewards points can add up without the burden of incurring debt you can’t manage or high interest charges. We hear plenty of stories from people making the most out their rewards schemes, and we know of one happy punter who manages to take his family on an overseas holiday each year using the Fly Buys points he’s earned. He has the system sorted.

The trick is not to change your spending or shopping habits to suit the loyalty scheme, you just want to be rewarded for the spending you were going to do anyway. After all, there’s not much point in spending $100 more just to get a couple of dollars’ worth of rewards.  

How to hack it:

You can use a credit card to double dip when it comes to rewards points. If your credit card rewards spending via Fly Buys, like BNZ Advantage cards for instance, use your credit card to pay for purchases at Fly Buys retailers, as well as swiping your Fly Buys card at checkout.

Spend the bank’s money

This one sounds enticing, doesn’t it? If you know you can pay off your card in full at the end of the month to avoid paying any interest, then go ahead and use your card to buy stuff during the month. That way your own money can stay in your bank account earning interest for the entire month. Then when the time comes, pay off your card and get ready to do it all over again the following month. You’ll want to double check with your card provider on how many interest free days you get before doing this, but most credit cards will provide you 30 interest free days plus a number of days from then until the due date. This will most likely give you up to 55 interest free days.

If you make your purchases earlier in the credit card billing cycle, you’ll have more interest free days to play with.

How to hack it:

Don’t pay the balance on your card until the date the bank tells you to (it’s called ‘Closing Balance’ on your statement and in your internet banking account). In the meantime you can have that money sitting in a high interest savings account earning interest, and then just pay it out once a month.

Make sure it’s a savings account that lets you do transfers out at no charge. Accounts like Personal OnCall allow you to make online transfers at no extra cost, so use this to avoid paying fees on the transaction.

Stay on top using online and mobile banking

At a basic level, make sure your credit card balance is visible to you whenever you need it by signing up to internet banking and downloading any relevant mobile apps your bank may have.

Even if you have a credit card with one bank and do your main banking with another, make sure you have access to the account information for both via internet or mobile banking.

If you make a purchase and think it may have pushed you over your limit, don’t panic. By making a payment that same day using internet banking and bringing your card back down below your limit straight away, you’ll avoid paying any extra interest or fees. This is where your bank’s mobile app can really help. Having instant access to your account and credit card balances lets you not only keep a close eye on your financial position at any time, but you can also transfer money over on the spot to ensure you don’t incur any extra charges.

How to hack it:

YouMoney shows you how much you have to pay (the closing balance) to not incur interest and you get a little tick to show you’ve done it. If you only pay the minimum payment you’ll be charged interest, so you need to pay the closing balance every month to avoid it.

YouMoney Closing Balance.png

Be proactive with payment

Never forget to pay your credit card bill by setting up a direct debit for your card, that way you can be sure you’re not missing out on any interest free days, but also make sure you’re not charged interest for that month’s purchases by always paying your balance on time.

Along similar lines, make sure you allow enough time for any payments to clear in order to maximise your interest free time. If your bank is the same as your credit card provider, this may be instantaneous; however, if they’re not the same, you may need to allow 2 or 3 working days for the payment to show up on your credit card.

How to hack it:

If you’re a new system-hacker wanting to make the most of rewards programmes and avoid debt, pre pay your credit card. By loading money onto it and using it as a debit card, you can still get the rewards but don’t earn or pay interest.

If you’ve found smart ways to use your credit card, let us know in the comments section below.

BNZ’s lending criteria, terms and conditions, and fees apply. Fly Buys terms and conditions apply. BNZ does not guarantee the redemption of Fly Buys or that Fly Buys will continue to be offered for products or services provided.

Want to start fresh and clear some outstand credit card debt? An interest free balance transfer might be for you. Visit our calculator to see how much you could save with a balance transfer and find more information or apply for one here.

1 Like

Hmmmm, here I was thinking I had my credit card mastered and now I find another way I could be doing better! I keep on top of my credit card at all times, and try to keep the balance at zero. I check my banking every day. It never occured to me to let the card build up each month, and have the money to pay it off building up in another (Rapid Save) account.

I might try that next month; my biggest concern is that if for whatever reason a second withdrawal is made from the account within the same month (an access fee, an incorrect deposit…) then you both lose your bonus interest, and sometimes get charged an additional fee, which is super frustrating. 

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This is brilliant,

Honestly I didnt want to use my credit card at all unless for emergency’s or overseas booking but it seems like you are getting more from using it.


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These are all really good tips Yvonne.

Something else to think about is to also take advantage of the other benefits of credit cards such as free travel insurance, free travel lounge access, free purchase protection etc. Different credit cards offer different “side benefits” so have a look around to find out what benefits are offered that you might like.

A friend of mine has some fancy Amex card that he uses to build up reward points but it also gives him free access to VIP lounges at airports which he loves and can’t stop talking about. My advice is to pick a rewards credit card that offers benefits that would be useful to you personally.

I personally don’t travel much (I hate flying) so he suggested I start by looking up the different rewards credit cards and benefits in New Zealand on this website which I personally found very useful as I managed to find the perfect rewards credit card for me

You have to do your maths though, and make sure the reward points you are likely to accumulate would more than make up for the annual fee that you would have to pay.

Happy savings!

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Yep, credit cards indeed can be a blessing - this guide to how credit cards work is useful if making a decision about whether a credit card is right for you. Personally, I don’t have one - I used to have them but I didn’t like the bills at the end of the month, so now I just Visa Debit card everything I need. Seems to work ok, but I don’t get any points but also buy less stuff.