The Crazy Credit Costs

We’ve all heard the story about ensuring we get a credit history so we grow our credit status with the banks. It’s the only way to get a loan after all. However, how many of us truly know what kind of expenses we are incurring each and every month while we try to show the credit bureau we are “creditworthy” people?

Interest Rates

Credit card interest rates are simply scary. There’s no way around it – if you’re late then it’s going to cost you. A lot. Most credit cards will give you 30 or even 60 days interest-free on your credit card, but the problem comes when you haven’t paid the money back at the end of that allotted time. The bank can charge you somewhere in the region of 25-30% on any outstanding amount left unpaid. Consider how much your new TV would cost if you added 25% to the cost every month – you could end up paying for the TV twice before you were done!

Bank Costs

When it comes to admin fees, banks are the best in the business. There is almost nothing you can do at a bank without incurring some cost or another. Credit cards are especially handy when it comes to tacking on admin fees. Banks are allowed to charge up to R150 initiation fee just to get you in the door. Shop around before committing to any credit card – you might be able to save yourself a few bucks!


The bank needs some insurance against the unlikely event that you die before you finish paying off your debts. This insurance ends up being covered by the consumer. Always read the fine print when accepting a credit card – make sure you know exactly what you’re paying for each month.


The bank is allowed to charge you a penalty fee if you exceed the limit on your credit card or are late in making payment. Always know what your credit limit is before swiping your card. You could end up paying more than you expected!