How smart people use credit

Published on 5th May, 2025 at 10:53 am

Credit can sometimes be a terrifying word for people, but it can be a blessing when used correctly. We spoke to Afua Darko, Business Head at Sanlam Credit Solutions, for tips on how smart people use credit to make the most of the facility.

Reading time: 3 minutes

In this article, you’ll learn:

• How to manage your credit smartly.
• About credit scores.
• How to manage your debt well.
• Make the most of your credit card.
• Things to avoid.
• Get expert advice.

Know your credit score

First things first, get to know your credit score. “Everyone has a credit score, and it is not only important to know what this score is (i.e., the number/percentage), but also to understand what it really means, as it is an indicator for you to understand where you stand in terms of your risk for getting credit.

Your credit score is only one factor that credit providers, like banks and lenders, look at to decide if you are a good risk to take on board as a client. The more positive your credit score is, the more you will be able to qualify for credit should you need it, and negotiate for more favourable interest rates.

Manage your debt well

To ensure you have a healthy credit record, Darko offers a few easy tips. “Pay off existing debt as quickly as possible – where possible, pay slightly more than the instalment amount,” she says. The Sanlam Credit Solutions head recommends paying all your instalments in full each month to avoid late payments.

“Ensure that your debt repayments don’t make up more than 30% of your income (referred to as your take-home salary towards debt ratio),” she adds. Lastly, she advises people to avoid applying for credit too frequently, as this could send a message that you are desperate for funds and living above your means.

Things to avoid

Typically, buying consumables such as food or restaurant eats on your credit card and not being able to pay it off is not a good idea, as it will gain more interest the longer you take to pay it off. Similar to travel packages, where you are still paying long after the excitement of the holiday has worn off.

Repay your credit card like a boss

The best repayment strategy is always to pay off the full amount on your credit card at the end of the month. Balances that are left over incur interest that accumulates.

If your credit card is clean every month when your salary is paid in, you can use it as an easy payment tool. You can also earn interest on a positive balance on your credit card and, with some institutions, get benefits from their rewards programme.

Get expert advice

To get a handle on your finances and better manage your credit, Darko recommends you speak to an expert such as a financial adviser or a credit management coach to support you on your financial journey. In addition, consider using a credible platform for additional day-to-day support to manage your credit better.

The Sanlam Credit Solutions platform is a handy online platform where registered users can receive monthly updates on their credit score, get credit and other financial insights and can speak to a credit management coach for free.
Register at: www.sanlamcreditsolutions.co.za