According to HSBC’s ad, life is a matter of perspectives and I couldn’t agree more. A credit card may be a boon or a bane to every individual. It used to be a bane for me especially when I had difficulty paying the bills but nowadays a credit card is becoming my best friend. I’ve been a credit card user since I was 18 years old when BANKARD gave us free credit cards with a P5,000 credit limit and all you have to do was be a DLSU student and give your ID number. Here are tips coming from an almost 2 decade old credit card user.
1- Non believer. Yes, there is still a good chunk of the (Philippine) population that don’t own a credit card and it is a choice. The practically rule is: don't get one if you don't need one. If you’re a farmer who buys everything in cash then what do you need a credit card for?
2- Stick to one. If you already have one, just maintain one card at a time. If you have two cards, try disposing the other one. The practical arrangement is that you have a credit card and a cash card like Smart Money (http://www.smart.com.ph/SMART/Value+Added+Services/Smart+Money/)
3- Info Load. The most important information that a card holder must know are the following: credit limit, monthly interest rate and cut off dates. Having high credit limit translates to confidence in spending hence request for a limit that is within your means. The monthly interest rate is the ultimate budget killer hence you should know this figure. The cut off date tells you when to pay your bills to avoid paying interests.
4- That’s nice. The nice to have information include: amount to earn loyalty points, target points per item and their hotline number (and if they operate 24 hours a day).
5- Gun-less society. You should be a transactor, not a revolver. A transactor is a card user who pays the whole amount due or a big part of it and a revolver is the one who pays the minimum amount due. The revolver is the money making engines of credit card companies.
6- For me? What’s in it for me? What benefits do the card company give you. If your card company gives one point for every P50 and you use P4000 a week on groceries, would a electric griller worth P2000 be a reasonable remuneration?
7- Promotions. For every $10 spent abroad entitles you an electronic ticket where you get a chance to win a free trip to Hong Kong. Cool! What have you got to lose? You’re going to spend anyway since you’re out of the country so why not use your credit card. It makes sense.
8- The Annual Fee. “Sir/Ma’am, we’ll give you the credit card FOR FREE. And you don’t have to worry about paying the annual fee because it’s eternally free.” Oh, by the way, we charge 3.5% interest every month. Don’t be easily lured by free stuff. You might not like what’s at the end of the line.
9- Then what? You should know about the company’s after sales services like procedures on how to deactivate your card in case of loss, disputed purchase complaints, how to claim loyalty points and where to pay my bills.
10- Link it. The beauty of technology. You can now check your balance inquiry ANYTIME (although not yet real time) using your cellular phone. And eventually (some of the cash card companies are already doing this), credit card companies may offer push text message service for every transaction. That would be a great way to monitor your transactions.
1- Non believer. Yes, there is still a good chunk of the (Philippine) population that don’t own a credit card and it is a choice. The practically rule is: don't get one if you don't need one. If you’re a farmer who buys everything in cash then what do you need a credit card for?
2- Stick to one. If you already have one, just maintain one card at a time. If you have two cards, try disposing the other one. The practical arrangement is that you have a credit card and a cash card like Smart Money (http://www.smart.com.ph/SMART/Value+Added+Services/Smart+Money/)
3- Info Load. The most important information that a card holder must know are the following: credit limit, monthly interest rate and cut off dates. Having high credit limit translates to confidence in spending hence request for a limit that is within your means. The monthly interest rate is the ultimate budget killer hence you should know this figure. The cut off date tells you when to pay your bills to avoid paying interests.
4- That’s nice. The nice to have information include: amount to earn loyalty points, target points per item and their hotline number (and if they operate 24 hours a day).
5- Gun-less society. You should be a transactor, not a revolver. A transactor is a card user who pays the whole amount due or a big part of it and a revolver is the one who pays the minimum amount due. The revolver is the money making engines of credit card companies.
6- For me? What’s in it for me? What benefits do the card company give you. If your card company gives one point for every P50 and you use P4000 a week on groceries, would a electric griller worth P2000 be a reasonable remuneration?
7- Promotions. For every $10 spent abroad entitles you an electronic ticket where you get a chance to win a free trip to Hong Kong. Cool! What have you got to lose? You’re going to spend anyway since you’re out of the country so why not use your credit card. It makes sense.
8- The Annual Fee. “Sir/Ma’am, we’ll give you the credit card FOR FREE. And you don’t have to worry about paying the annual fee because it’s eternally free.” Oh, by the way, we charge 3.5% interest every month. Don’t be easily lured by free stuff. You might not like what’s at the end of the line.
9- Then what? You should know about the company’s after sales services like procedures on how to deactivate your card in case of loss, disputed purchase complaints, how to claim loyalty points and where to pay my bills.
10- Link it. The beauty of technology. You can now check your balance inquiry ANYTIME (although not yet real time) using your cellular phone. And eventually (some of the cash card companies are already doing this), credit card companies may offer push text message service for every transaction. That would be a great way to monitor your transactions.
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