Ngarambe was over the moon when his bank approved his credit card application just in time for long Christmas and New Year festive season. There was nothing to stop the 26-year-old from ‘happening’ and giving his girlfriend a real treat now that he had enough cash, he told friends.

The credit card was loaded with Rwf700, 000. With this money plus his salary (of the same amount) and a handsome end-of-year bonus, Ngarambe was ‘the man of the season’. He gave his friends a treat at Car Wash, where they made merry until the wee hours of the morning. He bought expensive Christmas gifts for his girlfriend and a few other people, as well as restocked his beverage and grocery supplies. The young man had been encouraged by peers who had acquired credit cards in the previous months to get one from his bankers.

Ngarambe looked at this facility as a status symbol. The government, however, promotes payment cards and other e-commerce tools to ease transactions and create convenience in its cashless economy drive.

Fast forward, as you read this, Ngarambe is one miserable and broke guy. The total of Rwf1.5 million that he had at the start of the festive period is no more with nothing to show for the expenditure.

Like Ngarambe, many of us think that being ‘classy’ is equal to financial literacy or money discipline. However much money you get or have, it will just ‘evaporate’ if you ignore key money handling habits. Of course this goes with financial literacy, which many of us take for granted.

Having a bank account is not good enough to protect your money or enable you spend responsibly.

Many of us never take time to plan or learn to manage finances.

That’s why one can spend say Rwf500,000 or a Rwf1 million in a few days, not on investment or self-development, but on non-essential stuff; booze, partying, gifts, holidays or trying to keep up appearances. That’s why the government promotes use of cashless facilities like credit and debit cards, but also emphasises financial literacy.

Like any other tool, the cards benefit users of whatever the level of education only if they are financially literate. So, it is important to understand that the cashless tools are meant to ease our lives and are not express tickets to spending sprees. You might need to think twice next time you want to flash the credit card as the action could throw you into more debt and stain your credit rating and chances of acquiring credit, including loans.

Remember, Transunion Rwanda currently provides credit scores that indicate the probability of default of a borrower based on credit repayment history, according to the central bank.

Transunion Rwanda (formerly Credit Reference Bureau Africa) gives the financial sector stakeholders, like banks credit information on clients that facilitates them in risk assessment to boost access to credit facilities. With bad credit history, your chances of getting that loan to kick-start a business or build your dream home are next to zero.

Besides, a 2016 survey on credit card usage conducted in the US indicates that there are many reasons why someone may end up with a negative mark on their credit history, but the biggest one is lack of education.

The Credit Karma survey also indicates that "with targeted education and learning tools for new-to-credit consumers, problems like overspending on credit cards or missing payments can be reduced”.

Though the US financial sector is different from ours, the underlined issue here is on the importance of financial education for card holders and other bank clients to improve money management and discipline.

In Rwanda, there are 685,385 card holders as per June 2016 figures from National Bank of Rwanda. The data indicates that there has been a surge in use of cards as points of sale (POS) as transactions rose by 84 per cent from 146,038 to 269,241 in volume and were up 39 per cent in value terms to Rwf16 billion from Rwf12 billion.

Was all this spent rationally or do we have some Ngarambes counting losses among the lot? Therefore, let’s use the increased internet penetration and newspapers to educate ourselves about money in the New Year to ensure our financial health.

It’s never too late to learn new things, especially if it has to do with our wellbeing.