We Compare Entry Level Credit Cards Across The Major Banks

If you don’t own a credit card, but it’s something that you’ve been thinking about, listen up for second.

Having a credit card in your back pocket is handy for two reasons:

If you need to get your hands on some quick cash, you can swipe your credit card and not pay a cent back in interest for the first 55 days. That’s cool, and that’s the obvious reason why you should own a credit card.

Here is the not-so-obvious reason why you should have a credit card and something that most South Africans aren’t even aware of – swiping your credit card allows you to build up a credit score with your bank. Credit cards are normally our stepping stone into the credit space and having a well-managed credit card will allow you to build up some important “cred” with your bank, that you can leverage off of in the future.

Why is it important that your bank gets a feel for how you manage a line of credit?

Down the line you might be interested in financing a car or a house, and the way you’ve managed your credit card will go a long way to providing the bank with an insight into how you manage your financial affairs. If you managed your credit card in a responsible fashion, your bank will be more inclined to provide you with additional financing options in the future.

What criteria should you use when picking a credit card?

In this blog post we have a look at the entry level credit card options being offered by the major South African banks, with a comparison table at the end of the blog post that will make it easy to compare the banks based on 5 criteria:

1. What is the minimum salary requirement?
2. Are there any once-off activation fees?
3. Are there any ongoing administration fees?
4. How long is the interest-free period?
5. Do they offer a loyalty programme?

At the time of writing this post (October 2018) this is what we could find out online and by calling an authorised agent at each bank.

• Standard Bank – Gold Card

This is Standard Bank’s entry level credit card, and to qualify you need to earn a minimum of R5,000 a month. The credit limit is capped at R100,000 (but the line of credit offered to you will depend on the strength of your individual application). Your interest rate is personalized (again based on your individual credit score) and the monthly admin fee is R50.44 per month. Standard Bank will give you 55 days before charging any interest on your balance and they also charge a once off activation fee of R166.45.

• ABSA Bank – Gold Card

To qualify for the ABSA Gold Card, you need to earn a minimum of R4,000 a month. The interest rate you will be charged is personalized (again dependent on your application and individual credit score). The monthly fee is R46.04 and you will have 57 days interest free (that’s two more days than the other major banks). They don’t advertise a minimum credit limit on their website but the agent who took our call was kind enough to confirm what we already suspected – your credit limit comes down to your application and your affordability.

• Nedbank – Gold Card

To qualify for the Nedbank Gold Card, you need to earn a minimum of R5,000 a month. You have 55 interest-free days and their monthly fee is R46,30. Nedbank have a once off card activation fee of R189,65 which is the highest out of all the banks that we investigated. No mention of a credit limit which confirms it’s based on each individual application and credit score merit.

Nedbank’s rewards programme is called “Greenback” and it allows you to use a Greenbacks SHOP Card at over 100,000 stores, pay for fuel, shop online or even draw money straight out of an ATM.

• FNB – Gold Card

The minimum amount you need to earn to apply for the FNB Gold Card is R7,000 per month (R84,000 per year). The monthly fee is R48 a month and you get 55 days interest free. If you are into working a rewards programme, then you should consider the eBucks rewards programme. These are the key benefits:

1. Earn up to 1,5% back in eBucks when you use your Gold Credit Card to shop in-store or online
2. Earn up to 15% back in eBucks on your FNB Life, FNB Connect contracts or airtime and Checkers & Shoprite spend
3. Get up to 15% back when you use Uber domestically
4. Earn eBucks to fill up with fuel at Engen

*Terms and conditions apply

• Capitec

The minimum amount you need to earn to apply for a Capitec credit card is R3,000 per month. Their monthly fee is R35 a month with an overall credit limit of R150,000. There is a R100 activation fee with a 55 day interest-free period before you get charged. Interest rates are personalized based on the merit of your individual application and overall credit score.

Here is the quick price comparison table:

Capitec looks like a clear winner. Not only are they offering the lowest once-off activation fee, but their monthly fee and R3,000 salary requirement cap means they are clearly open for business.

We hope that you’ve found this article interesting.

Until next time.

The Wise About Life Team