I remember when I first got my credit card approved, I had just started working for a major bank as a part time bank teller and the approval letter came in the mail with a $10k limit.
I couldn't believe my luck, not only was I approved but to have access to that kind or limit was incredible... until my Branch Manager Leanne dragged me into her office to lower the limit instantly to a measly $2k.
At the time I didn't really understand why she was shocked and worked up about a $10k limit... the bank had completed the revilement checks and they had decided I could afford it so what was the big deal?
It wasn't long before that $2k limit was maxed out and I was caught in a cycle of paying a chunk off the credit card only to use it again, that $2k limit was pretty much the balance for the first few years of having a credit card.
After learning more about finances and how money works I learnt the 'trick' to credit cards... and that was (drum roll) its not my money, it's the banks money and when I used it, if I didn't pay it back within a certain time, I was paying a lot of interest.
You see I continued to see 'available funds' on my Net banking and thought of it as 'my money I had left to use' rather than seeing it for what it was, the Banks money.
I took the time to learn about how credit cards work and more importantly how the 'up to 55 days interest free' work and fast forward to today, I still have a credit card (discussions with the other half to close it leave him with heart palpitations so it's a work in progress) but I am happy to say it is no longer maxed out and we use it to our advantage not the banks.
Listen to the very end to hear my advice with credit cards...
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