Pay a Loan off with Your Credit Card

According to a FinScopeSA 2013 Consumer Survey, 14.2 million South Africans have some form of credit or loan. People have various reasons for getting loans or credit cards. They may get a student loan for paying their studies off or they may get car finance to buy a car. 

The most important factor that lending institutions consider before granting an individual credit is whether or not they can afford to repay the loan.  While most individuals in South Africa who are granted credit are given the option to pay the loan off in instalments, an increasing number of people are considering their alternatives.

Paying a loan off with your credit card is something that you should only consider if you can afford to make repayments comfortably. Credit cards generally have high interest rates, so this would be a major deterrent for many people.

On the plus side however, you could boost your credit score and get further rewards.

Student fees are quite expensive. More South Africans are being saddled with thousands of rands in student debt after they have completed their studies.

If you’re considering paying this debt off by using your credit card, it’s only a good idea if you can manage to pay you’re your credit card off every month without fail.

While more people are accessing debt, and alarming number of people are struggling to keep up with this debt.

Nonhlanhla Zaba, a financial advisor at Liberty Group advises: “Start by being aware of your financial situation, prioritise your debt repayments and arrange with your creditors to reduce the payments where possible.”

She also advises consumers not to wait until they’re drowning in debt to get a financial advisor.  Contact your credit card company and your lending institution to find out what your options are.