Credit is borrowed money that you can use to purchase things you need when you need them and then repay the funds back over an agreed period of time.

Overdraft: Your bank temporarily allows you to take extra money out of your current / cheque account. You are usually expected to pay this money back over a set period of time, and the interest charges can be very expensive.

The cost could be even higher if you do this by exceeding the limit set.

You could be charged penalties that may add up to hundreds of Rands.

Credit Cards: This is perhaps the most common type of personal credit. Credit cards allow repeated transactions up to a maximum credit limit, also known as your available credit limit.

Each time you buy something on the card, you are borrowing the money until you pay it back.

If you decide to pay the money back over time, the credit card company adds finance charges to your account. Each month, you will pay a calculated amount until the borrowed amount is repaid.

Before you spend using a credit card, you should be sure you can repay the amount on time, as some credit cards can have very high interest rates. You can either clear all or some of the balance, or make the minimum payment.

Store Cards: Much like to a credit card, you get a store card with a predetermined constant line of credit to pay for goods for which you get a monthly bill.

Before you spend using a store card, you should be sure you can repay the amount on time, as some store cards can have very high interest rates. You can either clear all or some of the balance, or make the minimum payment.

Unsecured Loan: An unsecured loan is a loan that is not backed by collateral It is also known as a personal loan. No need to use your property or assets as a guarantee against the loan.

This is useful if you need to raise a fairly large sum of money. These loans tend to be at higher interest rates as the borrowed money has no security or collateral to protect the money lent.

Store Finance/Hire-purchase: This is a type of credit provided when you purchase a specific item at a set fee per month. They can take a very long time to pay off, and are often poor value for money.

If all the installments are settled during the stipulated term, the goods become the individual's property. You can end up paying much more than the actual purchase price, sometimes offered on furniture or cars.

Secured loan: Your home is the 'security' for this type of loan. As there is security for the credit grantor in the value of the property interest rates are traditionally lower.

A home loan requires you to pledge your home, or the value of the borrowed amount as the lender's security for repayment of your loan.

The lender agrees to hold the title or deed to your property until you have paid back your loan plus interest.

Pay your accounts on time Pay your accounts in full If you have missed payments, get current and stay current.

The longer you pay your bills on time, the better Keep balances low on credit cards and other “revolving credit”

Pay off debt rather than moving it around If you have been managing credit for a short time, don't open a lot of new accounts too rapidly Opening new accounts responsibly and paying them off will create build your status.

Pay up outstanding debt and negotiate with the credit grantor to remove the default if you have one Negotiate with your credit grantor to have a judgment rescinded if you pay it up.