Credit Cards and You

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Warning: This is a long post. If you own a credit card or planning to have and swipe one, then this might be interesting to you.

I have been really meaning to write something about this. If you follow me on instagram, you might have happened to browse these series of photos.

Do you have a credit card? I bet most of us do. Does it feel good to see several cards inside your chic leather wallet? Warning, it can be deadly.

I’m quite surprised that there are really people who refused to own a credit card. For my own convenience, I think it is necessary in case of emergency and you’re out of cold cash. By emergency I mean necessities in life like health & safety, food, water, shelter, air (is it for sale now? haha!), are we clear with that? For people who love to travel like me, it is very quick and easy to book everything on line and by that, you obviously need a credit card. Moreover, it can be quite weary to be in a strange country with no friends and family and the credit card has been source of stability. However, please note that some credit card companies charge a different interest rate when you use your card outside the country of issuance. Better sort that out with your card provider before you swipe it abroad. To sum it up, here are my top 3 reasons for owning at least 1 credit card (I have 4 actually): emergency, travel and …bonus points!

Credit card companies will scout all possible marketing and promotions just to entice you to spend- from free stuff to airline miles etc. Rolex was even shocked to receive a pre-approved credit card – all he needs to do is to call and et viola! Who doesn’t want a freebie? Unfortunately, those freebies do not actually come free. So do not collect freebies with your card and just realize that the loan-shark interest rate you pay later on is much more that a freaking free toy. It’s alright to swipe your card to get bonus points as long as you plan to pay it in full later. It’s quite tacky to go to a lux store, buy an investment piece and bring out cold caching-ching from an envelope, isn’t it? Please do not give the sales associate a hard time counting your money. In this case, using a credit card is more proper. Please note however that, purchase of luxury by credit is another long story. Again, pay in full before the next billing cycle.

Why credit cards are deadly? Because it is operated by loan-sharks and it’s still about business baby! 2 years ago, I was in a spa with my friend. I was enjoying inch by inch of the massage when my phone rang, “Hi, my name is blah blah blah from Standard Charted Bank (SCB).” I want to die when she said that I have not paid almost Php 25,000 ($500) interest!!! What the f***! Lesson learned, always sign up for an online statement of account. See, I moved abroad for work and I just innocently assumed that I have fully paid my obligation with SCB. Unknowingly, there is still a balance that I didn’t pay for a couple of months. I want to scold them for not informing me but also blame myself for negligence. Calculate the interest + finance charges for late payments = I want to spa my own self next time (I ended up not enjoying the massage). To top it all, I wanted to die of heart attack when I went to the bank and fully paid Php 25,000 ($500) one time. I was still hurting that when SCB sent me a platinum card, I cut it into half. Unfortunately, I still have my Standard Chartered credit card until now. I really wanted to discontinue it a long time ago but every time I do, they will appease me by waving off the annual fee. This time I will definitely cut it. I am not even using it. I’m afraid (haha!) even though I have my online monthly statement now.

What’s really my point of having 4 credit cards? If you have a big household, sometimes it helps to have several credit cards. You can segregate the card used for grocery, other family needs, shopping etc in order to account the expenses easily but then again ensure that you are only after for the bonus points and settle the full amount before the next billing cycle. But in a family of me, myself and Rolex…what’s the point of maintaining several credit cards? Honestly, it’s due to sentimental reason. I don’t want to let go of my very first credit card, credit card #1, a HSBC Mabuhay Miles card (haha!). Due to the fact that I am addicted to travel, I signed up for a card that will earn me airline points. I was on my first job after I passed the board exam and isn’t it exciting to feel like an independent, career-oriented woman shopping with your own hard-earned money? Much more swiping it all away with your credit card! Besides, back in the days, it wasn’t that easy to get a credit card. In fact HSBC initially disapproved my credit card application because they couldn’t find my home landline number (it was like, no home landline = no credit card). I am talking about 12 years ago. It’s so different nowadays. My credit card #2 is from Standard Chartered Bank which I definitely plan to stop this year. Both cards actually are not in use for almost a year now. I am a good girl, yay! Credit card #3 is the one that I am actively using. It is a Mastercard issued by Bank Muscat (reminder to self before swiping, think again of the 3 reasons of why I have a credit card in the first place). Credit card #4 is a supplementary card courtesy of Rolex which I have not used ever since the world began. My gosh, my husband is so strict. Well, I want to congratulate him for having me as a wife. I do not abuse hubby funds.

Owning a credit card entails self-regulation. As a way, do not sign up for really ridiculous credit limits. It’s really tempting to swipe and shop. With the proliferation of online shopping, It’s such a breeze to get what you want without actually feeling the money gone in your pocket. That feeling kicks off when you receive the billing statement and when the interest starts to accumulate. I can honestly say that I am shopaholic but I am not an impulsive buyer. It pays to wait for a sale (by the way, there’s a lot of half-year ending sale going on right now). We can forever make an excuse like “gift to self” but how can you reward yourself with something that you can’t afford? Wants and Needs are 2 extremely opposite things. I make it a point that if I purchase a “want”, I should be able to pay it outright. In addition, it also helps to have a partner who spends wisely and who is always in the look out if you are over-spending.

I recommend owning at least 1 credit card which offers bonus points that fits your lifestyle. Always sign up for online statement of account for easy access. As much as possible, settle it in full before the next billing or pay more than the minimum amount due. Check the monthly statement for discrepancies. Self-regulate, if it’s hard ask your partner to help you. You can leave your card at home if you know that you are on your way to a shopping mall where every shop screams “sale”. We work hard and I know it’s fulfilling to reward yourself. On the other hand, don’t you just want to enjoy a sound sleep? Living in debt simply because of unreasonable buying spree is a nightmare. Do not social climb. Cut or tear your credit card if that’s the only way to say no. In the end, you will find out that you do not really need a credit card after all.

Cheers!

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  • http://puddinggirl.wordpress.com/ Cel

    Very well said Elz,  I had the same dilemma of credit card accumulating interests years ago, like you I madea one-time large amount payment and I didn’t feel good after doing it. I made a decision never, never as in never again will I allow my self to have loans and credits. Working in KSA before, Al Rahji bank sent me one because I accidentally answered “aiwa” to a phone call asking my permission for them to issue me a card and I returned it to them before I even get to open the envelope. Bankard RCBC sent me one too when I had my 2nd vacation trip home and like Al-Rahji’s I refuse the card and returned it back to them with a a definite NO even though they offered to wave off annual fees and increased credit limits. Having to travel frequently  with my family’s current set-up today, I applied a new one with my BPI account and they approve without any fuss. I’m allergic to swipes and charges so I don’t bring it with me and hide it somewhere where I don’t get to see it all the time. I only use it for booking flights and accommodations. I have Woody’s supplementary card as my card#2 and I am incharge of his card as well. In short, I have both the principal and supplementary cards from our US Bank joint account. I’m getting good at forgetting I have  cards so all is well regarding owning at least one.  :-)

    • http://thekaloka.com/ kaloka

      haha!so true.its good that there are debit cards now. You lessen the risk of bringing a huge amount of cash + you have a reason not to use your credit card.

      • http://puddinggirl.wordpress.com/ Cel

         Exactly! My original PNB account  ATM card was not a debit card.It is so old and used and the magnetic strip was cracked that I went to ask for a replacement. The lady who accommodated me at the bank told me that I can come back after a month or so to have the new card replaced again with the debit card type as it wasn’t available then. I told her its fine. Even the debit card is tempting to use just like the credit card… at least if the devil urge  to shop will hit me, I have valid reasons not to. First , I don’t have my credit card and second… the ATM is offline or its kapoy to wait  with the long line…or to the extent that there is no ATM around!… Ha!ha!.. kuripot na jud kaayo!  :-)