Array
Money Matters

Important Things You Need To Know Before Getting A Credit Card

This piece of plastic can be your friend, but if used irresponsibly, it can be your worst nightmare

Shares
Original Article: Tisha Alvarez Angluben Photography: FreeImages.com/Lotus Head

It is so easy to make purchases just by swiping a card on a machine. It can make you feel like you can buy anything you want—after all, you’re not pulling wads of cash out of your wallet. This feeling of euphoria lasts, until your monthly billing statement comes in. If you weren’t careful with your purchases, the amount you’re billed with will shock you. And if you can’t pay the amount in full—or worse, you can’t pay any amount on your due date—the nightmare will start.

Keep yourself from spiraling into debt. Here are important things to keep in mind:

1. A credit card is a convenient tool, as long as you use it responsibly.

When you have a credit card, you don’t have to bring a lot of cash with you. And in times of emergency— like, say, you need to buy medicines or anything of importance pronto—and you don’t have cash on hand, you can use your credit card to buy what you need. However, keep in mind that when you use your credit card, the bank charges you not just with the amount you spent, but also a monthly interest of 3.5 percent and membership fees, to name a few. 

ADVERTISEMENT - CONTINUE READING BELOW

2. As much as possible, pay your balance in full, no matter how tempting it is to pay off just the minimum amount.

When you pay only the minimum amount—or worse, when you don't pay anything at all on your due date—banks charge you compound interest, which is actually equivalent to a 34 percent interest rate a year (which you just don’t pay all at once, so you’re not aware that it’s actually that big). So the best thing to do is always pay the full amount that you owe the bank, or, if it can’t be helped, pay off the minimum amount at the very least. Don’t skip a payment altogether, because if you do, the amount that you would have to pay in the succeeding months will balloon. A retired company officer explains that this amount is “five percent total amount due, or P500, whichever is higher, plus past due amount, if any, plus late charges, if any, plus over limit amount, if any.” 

ADVERTISEMENT - CONTINUE READING BELOW

3. When you fail to settle your credit card bill, you will have to deal with demand letters, constant calls from banks, or members of a collection agency knocking on your door.

This can cause so much stress and might even put a strain on your marriage or your family. Usually, if you’re not able to pay after 90 days past your due date, your account goes to a collection agency (a separate entity from banks). Still, you must stay calm when this happens. Plan your finances so you can settle your debt as soon as possible. 

More on Realliving.com.ph

Shares

Latest Stories

This 28sqm Studio Unit in Bacolod is Perfect for Staycations

The design team created a compact yet inviting small home with a warmth that matches the vibe of the City of Smiles

7 Plants That Can Help You Keep Dengue Away

You need to do more than just plant them outside your home

Make Your Home Smell Like a Fancy Hotel for Less Than P700!

Shop for scented candles, room sprays, and more essentials while maintaining your budget

10 Things You Need to Clean to Avoid a Stinky Home

We tend to overlook how scent contributes to the first impression our house makes on guests �" or on us!

5 Organizing Ideas We Can Learn from this Family Home in San Juan

This home doesn't just have picture-perfect rooms. Let it inspire you to get organized.

Amoy Kulob at Mabaho? Here Are Ways to Keep Your Home Smelling Fresh

Because a beautiful house needs to smell good, too

These Are The Reasons Why You Have a Messy Home

Manage the clutter in your house with these tips from an interior designer

9 Affordable Ways to Give Your Kitchen Cabinets a Makeover

Updating the look of your cabinets can greatly improve the overall ambiance of your kitchen

Is Your House Making You Sick?

Household pollutants may cause respiratory diseases and other health problems

These Cozy Laundromats Offer Good Food and Coffee, Too

These well-thought-out spaces are making us look forward to laundry day!

How to Avoid Bad Luck in the Year of the Pig

They say you shouldn't wear black or white on Chinese New Year. Are you familiar with such taboos?

12 Decluttering Tips We Can Learn from Tidying Up With Marie Kondo

Achieving a clean, organized, and welcoming home can be easy
Load More Stories

Get inspiring design ideas and handy hints.
Subscribe to our newsletter now!