The credit card creed

MANILA, Philippines – Credit cards can open a world of convenience for its users. Having a credit card means carrying less cash, being able to spend more and enjoying the perks that come along with it.

But like anything that yields great power, having a credit card also comes with a certain amount of responsibility. Misusing your credit card can have dire financial consequences. As such, having one (or many!) requires self-discipline.

Still, using your credit card responsibly doesn’t need to feel like a prison sentence. After all, it’s your hard work that allowed you to get one in the first place. Here are a few self-affirmations to keep in mind before your next monthly billing statement arrives. 

It’s the most-simple yet all-encompassing rule of having a credit card. You’ve worked hard, earned your salary and qualified for a credit card. Use it and enjoy the perks that come with it. Just remember to do so within limits.

Like any legally binding contract, a credit card agreement follows a certain set of rules and regulations. Make it a point to read over the Terms and Conditions of your credit card as well as any policy updates that may come along. This ensures that you’re never caught unaware by any rules or limitations on your credit card, and don’t be afraid to contact the bank’s customer service department for any clarification.

Despite what it may seem like, having a credit card doesn’t mean spending a ridiculous amount of money that you don’t have. Instead, it allows you to spend a reasonable amount that you don’t currently have but that you will ideally obtain before your statement arrives. Sticking to a pre-determined budget allows you to stay on top of your spending and pay off your bills on time.

Entering into a credit card agreement is a legally binding contract. The bank agrees to lend you a certain amount of money and gives you terms and deadlines within which you can repay the amount you borrowed. Honoring your payment deadlines allows you to manage your spending and keeps your credit interest to a minimum. It also goes a long way towards the bank increasing your credit limit.

It’s important to not only pay off your bills on time, but to do so consistently. If left unchecked, a bad credit history can follow you everywhere. It can show up on background checks, affect your future credit card applications and it can even prevent you from taking out a car or home loan. Maintaining your credit rating is a long-term investment that requires regular maintenance.

Managing your credit card takes time and diligence. The trade-off is that you can enjoy all the advantages that come with having one. For one, it means fewer trips to the bank or ATM. More importantly, a credit card allows you to pay for essentials like food and tuition fees, or emergency situations like a sudden hospitalization. It’s not a matter of never using your credit card, but rather knowing when’s the right time to use it and of course, being able to take advantage of perks that you otherwise wouldn’t be entitled to if you pay in cash.

Banks offer deferred payments as part of a promo or a staple program. This means that the charge won’t appear on your bill until a certain amount of time has passed. This is good news for the customer. An installment payment plan (especially the “Absolutely O%” offer) gives you more time to save up the money to pay off your purchase. And for some offers, like the credit card tuition fee installment plan, a lower rate is available as compared to that of the school’s in-house monthly installment plan, making credit card payment the more practical option. Just be sure to take note of when the charge is scheduled to appear on your statement.

Year round, banks will provide promos of which you can regularly avail. This can include discounts like 50% off at select restaurants, getting freebies from certain stores, or even free gift certificates and treats for a minimum spend. These offers can save you a lot of money but don’t often last long so take advantage while you can.

While you try to plan your credit card payments and prepare for any eventuality, there will be instances in your life that availing of staple credit card benefits is of much value. For example, your credit card’s Balance Transfer facility comes in handy when there’s a need to purchase as high ticket item or service. Instead of paying your credit card’s monthly interest rates, you actually have the option to pay your credit card’s balance through your other credit card using Balance Transfer – with a lower interest charge, of course.

Think before you swipe

Managing a credit card involves equal parts discipline and common sense. Like managing your bank account, it’s important to not spend more than what you have lest you leave yourself in a whole lot of debt.

While the cash may stay in your wallet for now, every swipe is an obligation that must be paid off eventually. Remember, using your credit card responsibly can save you a whole lot of money and stress. – Rappler.com

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