I’ve heard a lot
of stories regarding credit cards back in the Philippines as well as here in
the UAE, that people are even being sued because they are unable to pay their credit
card debt. When I asked them how much they owe, I was in shocked and was wondering
how they acquired that huge amount of debt and how they can pay that amount
with their salary.
When I had my own
credit card, I was kind of hesitant to use it because of the negative feedback
I receive from people. But I don’t need to imitate what they did. I was able to
use it wisely. If properly manage, credit card is not as bad as it seems, but
just be cautious on using it.
Below are some of
the tips I could share with you on how I use my credit card to my advantage:
Pay in full. I am paying off my balance every month to avoid
finance charges. Finance charge although it seems small can make your debt
bigger than expected, especially if your outstanding balance is high.
Avoid late payments. If you cannot pay in full, at least pay partial
amount on time to avoid penalty charges for late payments. I am paying on time
to avoid late payments. As much as possible I pay off my debt so I can avoid
finance charges but in case that I cannot pay in full, I will pay more than the
minimum payment before the due date. This will save me from paying the late payments
which is very high.
Get a credit card that don’t have annual
fee. My credit card is free for life, so there is no
annual fee to pay. I am only using my credit card for purchases and being a
standard credit card is no issue for me. I am hearing a lot of other type of
credit card such as titanium or gold with load of benefits, but I don’t think
that I need it as it will entails annual fees, high finance charge and sometimes
hidden charges.
Get a credit card that gives more value. One more thing that I like about my credit card is
that every time I use it I can get points. When I accumulated enough points, I
can exchange them into vouchers redeemable to a variety of choices.
Keep track of your credit card expenses. I also keep track of my credit card expenses using
an Excel sheet, so I would know my balance and make necessary adjustments on my
purchase even if I don’t receive my monthly statements ahead of time. I am only
using my credit card for purchase that I know that I can pay on my due date. I
am also aware of the cutoff date so I could make purchases after that if I have
a big balance in my previous statement.
Determine your needs versus wants. As much as possible I purchase only the things I
need and if I think that I have surplus for that month, I would probably
purchase my wants. As much as possible I avoid unnecessary expenses that
includes going to the mall out of impulse. I also schedule to buy personal
stuff every month.
For me, it really
depends on the person if credit card will be his friend or enemy, in the end, we
are the one using it so we are the sole responsible if we will use it to our
advantage. Having the right attitude and wisdom will save us from going in the
trap of huge credit card debt. Use it wisely and you will reap its advantage.
Let us be a wise
steward of the things that was entrusted to us so that we won’t make ourselves
a servant to the lender.
How about you, is
the credit card a friend or an enemy?
God bless us more...
“The
rich rules over the poor, and the borrower is servant to the lender.” Proverbs 22:7 (NIV)
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