Using a credit card

Annual fees: Be aware of high annual fees. There are plenty of offers around and you should be able to find a card with either no annual fee or a small one.

Interest rate: If you expect to carry a balance on the card, get the lowest rate you can find. This does not mean just the introductory rate, which is only temporary. Look at the card offer under 'terms and conditions' and search for the true rate after the introductory one is over.

Perks: It is a common tactic these days for credit card companies to introduce perks and rewards to attract customers. Do not sign up for a card just to get medical coverage, frequent-flyer miles or a stereo. However, if you are in need of a card and satisfied with other terms the card is offering, the reward may be a plus.

Card details: Rule number one when using credit cards is do not give out card information to vendors that you do not trust. Protect the information the same way as you would cash and personal assets.

Spend sensibly: Do not treat your credit card as a revenue stream but rather a debt that needs to be paid back with accrued high-interest costs.

Department cards: These cards usually carry very high interest, sometimes higher than 20 per cent annually. If you are a spender, especially when it comes to clothes, it will be easy to rack up charges on these cards.

Type of cards: Choose a card that is widely accepted and also fits your needs and lifestyle most closely. For example, American Express is not as widely accepted locally as Visa or Mastercard but it offers business and travelling-related benefits which can be a plus for those who are on the road a great deal.

Additional benefits: Some cards offer discounts at allied airlines, hotels, shops and restaurants. Check them out and maximise the benefits of your card.

Double charging: Make sure the store only inserts one slip (containing three sheaths) in the credit card machine. Watch for shops that insert a few and use the other slips, complete with your signature, for illegal purposes.

Grace period: A grace period means you don't start accruing interest charges on your purchases for a given time, usually 25 days or a month. It is like a free loan.

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