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how to use Credit Cards
A few years ago I heard 2 friends talk about how "not having" a credit card was just weird. They both believed that everyone is supposed to have it and so they both should've owned one too. Well I hope they knew better than that.
I owned 4 credit cards. Here's how I was as a user. If I'd CA 8,000 I'd make sure that before the bill comes I'd be able to pay the whole amount back. I only used my card if I was sure I'd be able to pay it the next payday. I even used MS Excel to track all my purchases, payments, due dates, balances, CA limits. I've kept all pin numbers, passwords and contact numbers in one notebook just so all information were available when I needed them. I've never lost any of my cards. I've made installment purchases when I needed to buy something for the house. During emergency situations they've kept me sane when there was no petty cash. I have used it as much as anyone.
Until I lost control. I've already heard stories about it; I was even warned by friends to NOT have it. But like most of you, I thought I would be able to manage my purchases wisely and I would never ever fall into the debt trap. But I did. And how I wish I had listened. How I wish I didn't own one. Of course most would say one should have wise use of it BUT you know what, it's really easier said than done.
So if I am to advise someone about how to use credit cards, please heed these:
A few years ago I heard 2 friends talk about how "not having" a credit card was just weird. They both believed that everyone is supposed to have it and so they both should've owned one too. Well I hope they knew better than that.
I owned 4 credit cards. Here's how I was as a user. If I'd CA 8,000 I'd make sure that before the bill comes I'd be able to pay the whole amount back. I only used my card if I was sure I'd be able to pay it the next payday. I even used MS Excel to track all my purchases, payments, due dates, balances, CA limits. I've kept all pin numbers, passwords and contact numbers in one notebook just so all information were available when I needed them. I've never lost any of my cards. I've made installment purchases when I needed to buy something for the house. During emergency situations they've kept me sane when there was no petty cash. I have used it as much as anyone.
Until I lost control. I've already heard stories about it; I was even warned by friends to NOT have it. But like most of you, I thought I would be able to manage my purchases wisely and I would never ever fall into the debt trap. But I did. And how I wish I had listened. How I wish I didn't own one. Of course most would say one should have wise use of it BUT you know what, it's really easier said than done.
So if I am to advise someone about how to use credit cards, please heed these:
One credit card is enough and choose to use it to tide VERY difficult or emergency situations.
Once you're approved with one credit card (whether you applied for it or not), dadami ang tatawag na credit card companies sayo. In my case one credit card agent even told me (when I refused another credit card) to accept them all na lang and not use/activate it if I really don't want to. Correct? Wrong. Most cards are already activated and whether you use them or not, annual fees will still be incurred (although of course you can talk it out with them). It's just tempting, attracting even especially the freebies you will ONLY get when you make your first purchase. I should have stood my ground for little did I know that all the agent was thinking of lang pala was their commission.
When it comes to installment purchases, even if your choice of item (furniture, appliances) doesn't display zero installment plans for credit card purchases, you can actually call your bank if they can provide installment payments for you.
At the back of your card, note “please ask for ID” to gently remind cashiers for security reasons. If you notice, all they do is just compare the signatures. It will not protect you if your card is stolen. Save contact numbers of the bank in your phone so the instance you find out it's stolen or gone, you can immediately notify them.
This I read, you should be contented with the credit limit given to you. Do not extend it any further as it will all the more tempt you to use it on a whim. If ever they increase your limit make sure you've approved it first. You can probably base your credit limit to your month's salary or 2month's at the most.
Realize that it's risky when you're carrying say 300k credit limit of a credit card. The higher credit limit you have, the risk of paying it all off when it's stolen.
Do not stash all your cards in one purse. If you lost your wallet, you're screwed especially if all else, like license, health cards and all identification cards are in there. Better yet, bring it only if you've an intention of swiping it that day.
Take a careful note of how much your remaining balance is every time you're about to use it so as not to over limit your spending. Over limit means another added fee next billing.
You can request to waive your annual fee.
Never make late payments. If you can't pay in full, pay the minimum amount instead. But never make that a habit.
So what happens if you can no longer pay for it and you end up just paying the minimum amount every billing comes? That will surely hurt you big time. Interest na lang ang binabayaran mo at hindi yung utang mo so nababaon ka lang sa utang lalo. That was how it got me into trouble. For more than a year, I decided not to use any of my cards any longer and would just pay the minimum every month, I thought doing so would lessen my burden. It did not. Like I said, bayad lang ako ng bayad sa interest. So I'd like to share next post how I think I should have done it had I known better. All will be base on my own experience. I have learned it the hard way just so you know. I was advised the wrong way so I took it the wrong way too.
When it comes to installment purchases, even if your choice of item (furniture, appliances) doesn't display zero installment plans for credit card purchases, you can actually call your bank if they can provide installment payments for you.
At the back of your card, note “please ask for ID” to gently remind cashiers for security reasons. If you notice, all they do is just compare the signatures. It will not protect you if your card is stolen. Save contact numbers of the bank in your phone so the instance you find out it's stolen or gone, you can immediately notify them.
This I read, you should be contented with the credit limit given to you. Do not extend it any further as it will all the more tempt you to use it on a whim. If ever they increase your limit make sure you've approved it first. You can probably base your credit limit to your month's salary or 2month's at the most.
Realize that it's risky when you're carrying say 300k credit limit of a credit card. The higher credit limit you have, the risk of paying it all off when it's stolen.
Do not stash all your cards in one purse. If you lost your wallet, you're screwed especially if all else, like license, health cards and all identification cards are in there. Better yet, bring it only if you've an intention of swiping it that day.
Take a careful note of how much your remaining balance is every time you're about to use it so as not to over limit your spending. Over limit means another added fee next billing.
You can request to waive your annual fee.
Never make late payments. If you can't pay in full, pay the minimum amount instead. But never make that a habit.
So what happens if you can no longer pay for it and you end up just paying the minimum amount every billing comes? That will surely hurt you big time. Interest na lang ang binabayaran mo at hindi yung utang mo so nababaon ka lang sa utang lalo. That was how it got me into trouble. For more than a year, I decided not to use any of my cards any longer and would just pay the minimum every month, I thought doing so would lessen my burden. It did not. Like I said, bayad lang ako ng bayad sa interest. So I'd like to share next post how I think I should have done it had I known better. All will be base on my own experience. I have learned it the hard way just so you know. I was advised the wrong way so I took it the wrong way too.
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