Got your first credit card? Read this
MANILA, Philippines – Your first month of having a credit card can be a struggle. You feel rich as you can just swipe this card for every purchase. The concept is abstract because you can’t see anything – you feel as if nothing’s deducted from your funds. You don’t feel the impact of your spending until your billing statement comes.
But if you’re a responsible credit card holder, you can save yourself from the trouble of getting into a huge debt, get to enjoy the full benefits of having a credit card and even use it as a tool to manage your finances.
Don’t swipe for things you can’t afford.
Credit cards are supposed to be used for emergency cases such as accidents, sudden illness, house repairs, and other big unexpected expenses. But if you’re always using it, make sure that you only swipe for what you can really afford to pay on a monthly basis, given your means.
Pay in full or more than the minimum.
Don’t be misled into paying only the bold font in your billing statement. As much as possible, pay everything you consumed for the month. This will make sure that it won’t incur interest.
Stay below your credit limit.
It is not a good idea to max out your card. If you are striving for a good credit score, try to stay below 30% of your credit limit. Also, if you stay below your limit, this means less debt, less interest for you.
Pay in cash/debit card.
As much as possible, try to use cash or your debit card instead of relying on your credit cards when making purchases. Use your line of credit only on important purchases, the ones that you cannot afford to pay in full and in cash. As indicated, credit cards are abstract; you will just realize everything when your bill arrives. You don’t like that kind of surprise.
Always check your billing statements.
Always check if your purchases are right against your bill. This means that it is best to always keep receipts. If you were charged for a product or service you did not actually get, verify the transaction with establishment and report it to your credit card provider. Should you come across any doubtful and unauthorized use, report immediately to your issuing bank.
Don’t use your card on unsecured sites.
As much as possible, avoid transacting in websites or mobile applications that are not secure. One way to verify a site is to go through the check-out page and see if the site’s URL starts with “https://,” which signifies that the site you are trying to access is secure and safe to use. Anything you type on unsecured sites can hack your credit card.
Having a credit card demands that you be disciplined spender. You must be in control of your spending habits. You also need to be vigilant not to fall for credit card scams and identity theft, which could lead to serious financial trouble. Take note of the reminders above and share with friends and family who also have credit cards. – Rappler.com
Image of woman holding credit card from Shutterstock
MoneyMax.ph is an online platform for comparing financial and telecom products and services. It aims to give the power of smart purchase decisions back to Filipino consumers by providing everything they need to become financially savvy.