I WAS one of the many Filipinos who would rather pay by cash than by credit card. I grew up hearing that this shiny piece of plastic was no good and would only leave anyone drowning in huge debt. And so, I never attempted to apply for one. In the last few years since I started working, cash has been my primary medium for financial transactions.
Until a very unexpected delivery arrived at our doorstep. It was a securely sealed white commercial envelope from the bank. I never thought it was a credit card, but to my surprise, it was.
I didn’t send any formal application for it. According to the confirmatory text message, I was pre-approved for this classic credit card based on the consent I signed with them when I opened a payroll account three years ago. I suppose not paying much attention to the terms and conditions could give you an instant credit card nowadays.
But regardless, I still activated the card out of curiosity. Two months later, I realized it was by far the best decision I had ever made. It took me a while before I got used to the jargon like credit limit and minimum amount due, but on a positive note, incorporating the credit card into my money system helped me become wiser about my finances.
Here are the five important things I’ve learned about credit cards, which I’m happy to share with you:
First, it actually helps in saving money. Saving money becomes less of a priority during emergencies. But with a credit card, you can definitely foot the bill even without touching your hard-earned savings. Of course, you still have to repay what you owe, but at least you have another month to prepare the amount and end the crisis once and for all.
Second, it offers rewards that are almost as good as cash. Credit card points cannot be withdrawn as hard-cold cash. But why do you need cash if these points can actually give you a free airline ticket or a hefty discount on a luxurious restaurant? Yes, it’s true. Credit cards are generous when it comes to perks and benefits, so don’t take them for granted.
Third, it makes budgeting smarter and easier. Using a credit card to cover your monthly expenses is not actually a bad approach to budgeting. In fact, it’s way more convenient to pay your dues anytime and settle everything at the end of the month than to wait for payday and make the payments under the wire. Needless to say, the risk of overspending remains either way, so always keep track of your outgoings and make sure you don’t go beyond your means.
Fourth, it provides a variety of installment plans with zero percent interest. Installment plans with no added fees are another privilege you can enjoy as a credit card holder. It allows you to bring home a big-ticket item and pay the price in small monthly dues. So the next time you upgrade to the latest phone model, you better be practical and make the most of this opportunity.
Finally, it gives everyone an opportunity to become responsible. When talking about credit cards, responsibility means only two things: paying on time and paying in full. It’s easy to manage if you maintain a strong sense of discipline and you keep yourself on top of your spending. So, whatever comes your way, always treat your credit card the same way you treat your cash. Be responsible. Be diligent. Take its power to your advantage, but at the same time, keep your credit line in good standing.
