Myth Buster 3:  

Using a Credit Card will save a fortune?

Don't be fooled into thinking that a Credit Card is going to save you a fortune in interest. Credit Cards can be great for budgeting as they keep a good record of where you're spending your money.

Generally they are used in conjunction with a "Flexi Loan" or a "Revolving Line Of Credit" (RLC) into which your wages are paid. As for saving interest let's look at a typical spend of say $2,000 over the period of a month. If your mortgage interest rate is 10.50% pa you would save approx $23 per month by making your purchases on the Credit Card and maximising the 55 day payment time. Nice, but probably considerably less than you've been lead to believe.

The Credit Card option requires discipline and needs to be treated with caution. You can only spend money you have for it to work. If you are spending money that is not yet in your Flexi Loan then effectively you are borrowing and there are no savings.

Remember, your Card must be paid off in full every month or all your savings will be lost on harsh Credit Card interest rates.