Published: February 23, 2017 | Updated: November 6, 2019 | Posted by: Carlo Miguel Castañeda | Credit Card
These days, owning a credit card is considered a symbol of being responsible enough with your finances to handle payments on it, or having enough control of your impulses to not misuse it. Owning a credit card doesn’t mean you instantly have money to spend. Your credit card allows you to take out a loan against your next paycheck instantly, and you will have to pay it when your bill comes due.
You can easily max out your card without noticing. You should at least know the dos and don’ts of credit card use to avoid falling into debt.
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When shopping, most people go to malls and stores to buy their loved ones gifts. Instead of using cash, use your credit cards to purchase items. While already prevalent most other times of the year, it’s during the holidays that credit card companies offer additional perks and rewards to their clients. Take advantage of such offers to cut down on prices or receive discounts.
Resist the temptation to splurge the second you’ve got that piece of plastic in your hands. Do you really need it or do you just want it? As with any purchase that could be deemed impulsive, it’s ideal to think about it for at least 24 hours before setting out to buy something, or you could end up with Buyer’s Remorse.
In case you want to apply for a new credit card, choose a card that is affiliated with establishments you frequent. This card offers a lot of great freebies, including free membership fee for the first year and shopping perks from Forever 21.
Shop at any Forever 21 branch in the country and you’ll earn more points. You’ll also get a birthday present: 10% discount on selected items on the day.
Stay within 30% of your credit limit to maintain a healthy credit score. Keep your balance low because your debt is a significant factor in your credit history, and a history of small purchases paid off completely does help to at least ensure that you remain in good standing with your credit card company.
Check and go through your credit card’s transaction records to make sure your bill is accurate. In case you find a dispute in your statement, call your bank immediately. According to the Credit Card Association of the Philippines, most banks will either call or send a message to notify the clients about transactions made.
Always remember to safeguard not just your card, but also the information about it. Don’t perform online transactions in public and securely log out of your account from any websites that may contain your credit card details.
As tempting as it might be to use your credit card for nearly everything you buy, it’s probably better to save it for the big-ticket purchases, or for your online purchases. Binding your credit card to your ride-share app account is also a bad idea, as you’ll end up wanting to take a car just about anywhere without regard for the cost.
Minimum payments on your credit card statement shouldn’t be your go-to pattern. Remember that your remaining balance incurs interest, and the interest piles up for every billing cycle that this amount goes unpaid. It’s also easier to fall in debt because the interest on your purchases is based on the original price, and not the remaining amount on your statement.
Credit cards are great tools that let you buy some of your bigger purchases, but remember that it isn’t a license for you to spend outside your means. Even when you’ve got a credit card, you still need to take a look at your budget for it. Instead of going for the luxury, consider taking on your credit card’s deals and discounts to get ahead.
Remember, owning a credit card doesn’t make you rich. Each swipe is considered a loan. Before you make any purchases, think twice and make sure you have the capacity to repay the amount you will owe. In addition, your credit limit will reflect how much you can charge to the card, so be responsible when using it.