The convenience of credit cards must be matched by a level head or you are likely to end up buried in debt, say financial advisors.

With the licensing of at least two credit bureaus locally, it may become increasingly difficult to obtain credit if one has not exercised financial prudence.

Credit cards are one of the most popular convenience banking products but sticking to your repayment plan is strongly advised.

“The minimum payment on your credit card increases every cycle if it is not paid in full by the due date,” said Avril Leonce, manager of Scotiabank’s New Kingston branch. “So adhering to the payment schedule will ensure that your credit rating remains in tact.”

Since most commercial banks do not apply a penalty for making only the minimum payment, the temptation to do just that can be overwhelming.

However, for someone with no fiscal discipline, this could spell trouble. Financial advisors agree that this practice could create a culture of risky financial behaviour since the remaining balance on your card continues to attract interest.

A similar pattern of risky behaviour is created in exceeding your credit limit.

Scotiabank charges an over-the-limit fee of $2,000, which is “automatically generated”.

“We encourage customers to refrain from keeping the outstanding balance close to the limit as interest generated can push the outstanding over the limit and generate a late payment charge,” said Leonce.

So, you made the minimum payment, but how often do you pay off the remaining balance before the next billing cycle?

“The trouble with credit cards is that banks give this line of unsecured credit to its customers and hope that they manage it well,” said Megan Deane, CEO of CreditInfo Jamaica.

The chief executive of Jamaica’s first licensed credit bureau reckons that in the absence of customer credit profiles, banks assume unsecured debts, which may adversely, affect both customers and banks.

In order to maintain a handle of one’s credit, “do not use the credit card unless you know how the amount outstanding will be repaid,” said Leonce.

She added that one should “always set a budget for how much you want to spend on the card in any given month”.

But for those who were not prudent, “a credit card debt can always be converted to a Scotia plan loan”.

The loan, she advised has a “fixed payment schedule with a rate much lower than that of the credit card”.

With a capped principal payment, the loan would work out “much cheaper” and the “interest cost is significantly reduced”.

The benefits of holding a credit card can however be enjoyed if one simply “lives within their means” said BCW Capital’s Joel Gordon.

“Credit cards build your credit history, if managed well,” Deane said, adding that they offer an opportunity to test your skill at debt management in an industry that is fast changing.