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How To Apply For A Credit Card In SA

17 June 2024 | 0 comments | Posted by Che Kohler in Money Talks

Applying for a credit card in South Africa

South African consumers are moving towards digital payments for more of their day-to-day transactions; while debit cards remain a popular option, credit cards are becoming a bigger part of the transaction landscape, especially due to the profiliation of eCommerce through online marketplaces.

According to Afri Fintech, 60% of South Africans own a debit or credit card.

Credit cards offer a convenient way to make purchases, give you quick access to liquidity, have flexible repayment options and can be used to build your credit score and even earn rewards.

Banks also love pushing credit cards because of the fees and interest they can make on these short-duration credit facilities, especially for those who tend to mismanage their credit card.

Like any financial tool, credit cards can be a net positive when used responsibly, but few know how to leverage them properly and are ill-prepared to handle the capital they can access.

Before you apply for a credit card, you'll need to jump through a few hoops, and once you have one, you need to be able to manage this facility, or you will get burned.

So, let's start by asking how we get credit cards in South Africa.

Before you apply for a credit card

Before you walk into the bank or apply online and start the painful admin that's coming your way, you can do some groundwork beforehand to avoid some possible pain points.

  • Check Your Credit Score: Understanding your creditworthiness is crucial. Obtain a free credit report from a reputable bureau to assess your score and identify any potential issues.
  • Know Your Needs: Analyze your spending habits and financial goals. Are you looking for cashback, travel rewards, or building credit? Different cards cater to different needs.
  • Research and Compare: South African banks offer a variety of credit cards. Utilize online comparison tools and bank websites to compare interest rates, fees, rewards programs, and eligibility criteria.

Since your focus will be on an entry-level credit card, this breakdown likely applies to you. As you build up a record with your preferred bank, you can access more perks and better rates.

Bank and accountQualifying incomeInterest rateInterest-free periodCredit limitBenefits
Absa Flexi CoreR4,000Personalised57 daysUp to R90,000R1.5 million travel insurance
Absa Rewards
Tap payments — all digital wallets supported
Lost card protection
Capitec GlobalOne CreditR5,000 (R10,000 for self-employed)Personalised55 daysUp to R500,000Tap payments — support for Apple and Samsung Pay
Easy home loan applications
Capitec Live Better Rewards
Up to 3.5% annual interest back on positive (credit) balance
Free travel insurance up to R5 million
Discovery Bank Gold CreditR8,333Personalised55 daysNot specifiedDiscovery Miles Vitality Money Rewards
Tap payments — all digital wallets supported
Free virtual cards
Up to 2% annual interest on positive (credit) balance
Free travel insurance
Free Vitality Savings Account
Access to real-time forex accounts
FNB Aspire CreditR7,000Personalised55 daysUp to R250,000eBucks rewards
Automatic debt protection up to R5,000
Tap payments — all digital wallets supported
Free virtual cards
Free international travel insurance
Two complimentary Slow Longue visits
Nedbank Gold CreditR5,000Personalised55 daysNot specified50% off Nu Metro movie tickets
R0.25 back for every litre of fuel (requires Greenbacks-linked card)
Earn Greenbacks on eligible purchases (R25 per month)
Restaurant deals and travel discounts
Travel insurance optional
Tap payments
Standard Bank Blue CreditR5,000Personalised55 daysUp to R250,000Emirates flight discounts of up to 20%
Automatic basic travel insurance
10% cash back when using Booking.com
10% off when spending R300 or more on ProGifts
Tap payments — all digital wallets supported
10% off of Showmax subscriptions

Source: My Broadband

Gather your documents

The application process typically requires the following documents:

  • South African ID Book (or Passport for Foreign Residents): Proof of identity and citizenship.
  • Proof of Income: Recent payslips (employed) or bank statements (self-employed) demonstrating your ability to repay.
  • Proof of Residence: Utility bill, bank statement, or lease agreement not older than 3 months.

The application process

  • Choose Your Bank: Select a bank that offers a credit card aligned with your needs and eligibility.
  • Apply Online or In-Branch: Many banks allow online applications, while some might require a branch visit.
  • Provide Accurate Information: Fill out the application form truthfully and accurately.
  • Await Approval: The bank will assess your application based on your creditworthiness and affordability. This can take a few days or weeks.

Tips for success

  • Maintain a Good Credit Score: A healthy credit score significantly improves your approval chances and secures better interest rates.
  • Avoid Multiple Applications: Applying for numerous cards within a short period can negatively impact your credit score.
  • Be Honest About Your Income: Providing accurate financial information ensures the bank offers a credit limit you can manage.

Additional considerations

  1. Annual Fees: Some cards have annual fees that can offset your rewards. Consider if the benefits outweigh the cost.
  2. Reward programme fees: Nowadays, every bank has some rewards program: Discovery Miles, UCount points, eBucks, Absa Rewards, and the list goes on. They will sell you on the incredible rewards offered by their credit cards, but often, you actually pay for this facility, usually in the form of a yearly fee.
  3. International transaction fees: Credit cards can be used overseas and offer an easy cashless option for travel. However, international transaction fees will apply, and these can be quite hefty. Ensure you know what these fees are.
  4. Interest Rates: APR (Annual Percentage Rate) determines the cost of borrowing on your credit card. Choose a card with a competitive interest rate. Credit Limit: Select a credit limit that aligns with your spending habits and ability to repay. Don't get tempted to exceed your limit.
  5. Credit card insurance: Credit card issuers usually include this in the fee, but it can be a separate cost, so check with your provider so you know the total cost of carrying around the plastic.
  6. Minimum payment: A 'minimum payment' refers to the smallest amount due every month on your card based on a percentage (usually 3% to 5%) of the capital. The minimum payment includes interest for the month, applicable fees and potential charges for a defaulted payment.

Congratulations, you've got credit!

Once approved, use your credit card responsibly, use your interest-free repayment window wisely, Make timely repayments, and stay within your credit limit to build a healthy credit score and reap the benefits of plastic power!

Why would you want a credit card?

In South Africa's dynamic financial landscape, choosing the right credit card can feel like navigating a plastic jungle. With various banks offering a plethora of deals, it's crucial to find the card that aligns with your spending habits and financial goals.

Online shopping

Online shopping has become part of our lives now, and these service providers aren't exactly keen on handling cash; the overhead and friction can be costly, while debit cards don't work well with all payment providers.

Online credit is king, and if you want to secure your purchase on that hot new sale item, nothing will be faster than a credit card.

Subscription services

Credit cards are ideal for recurring payments associated with subscription services offered by many eCommerce platforms. This allows for automatic deductions and a more predictable revenue stream for the business.

As we add more SAAS purchases like Netflix to our monthly consumption, the credit card becomes the preferred method, or you're stuck buying vouchers for every service you want to use, should you want to pay cash.

Credit card rewards programs

When banks issue you a credit card, they hope you'll keep using the facility and actively encourage spending by gamifying the use of the card, giving you discounts and points at various retailers, or giving you access to perks like private lounges when you travel.

If you're a sucker for rewards, consider the various programs each card offers before picking one.

Cash Back Champions:

  • Capitec Credit Card: A popular choice for its low minimum income requirement and up to 1.5% cashback on purchases.
  • Standard Bank Blue Credit Card: Personalized interest rates and a lengthy interest-free period make this card ideal for responsible spenders who can pay their balances in full each month.

Travel Mavens:

  • Standard Bank Titanium Credit Card: Travel enthusiasts rejoice! This card offers benefits like up to 20% off on Emirates flights and airport lounge access.
  • Discovery Bank Miles Credit Card: Earn Discovery Miles on your spending, redeemable for flights, accommodation, and other travel experiences.

Rewards Rookies:

  • FNB EasyPay Credit Card: Aimed at first-time credit card users, this card offers a manageable credit limit and rewards for responsible spending.
  • Absa Lite Credit Card: Another beginner-friendly option with a low annual fee and rewards on everyday purchases.

Luxury Seekers:

  • American Express Platinum Card: This card offers personalized annual interest rates and a host of travel and lifestyle benefits, catering to high-end spenders.
  • Investec Private Bank Credit Card: Boasts the most affordable credit card option for private banking clients, often with exclusive rewards programs.

Remember: The "best" credit card is subjective. Before diving in, consider your:

  • Spending Habits: Analyze where your money goes to find a card that rewards your typical purchases.
  • Financial Goals: Are you looking for travel perks, cashback, or building your credit score?
  • Creditworthiness: Your credit score will determine your eligibility for certain cards and interest rates.

The cost to get started with a credit card in South Africa

If cost is a primary concern of yours, consider the following expenses that you will be liable for once you get an entry level credit card.

AccountTransaction fee (local)Transaction fee (international)Transaction notifications (SMS)Initiation feeMonthly fee
Absa Flexi CoreR0.00R0.00R1.25R175.00R57.00
Capitec GlobalOne CreditR0.00R0 – R100: R2.00; R101 – R200: R3.00; R201 – R500: 5.00; R501 or higher: R10.00R0.35R100.00R50.00
Discovery Bank Gold CreditR0.002% of transaction value capped at R500 per transactionR0.00R199 (R150 if the limit is less than R2,000)R100.00
FNB Aspire CreditR0.002% of transaction value capped at R100 per transactionR0.00R175.00R45.00
Nedbank Gold CreditR0.002% of transaction valueR0.50R180.00R50.00
Standard Bank Blue CreditR0.002.75% of transaction valueR1.00R180.00R40.00

Source: My Broadband

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