5 Tips to Managing Your Credit Card Efficiently

Many Filipinos feel that credit card is a trap. Financial advisers may even advise you not to have one. But having one may actually help you if you are financially savvy.

Credit cards are loans given by banks oftentimes to their account holders. Sometimes, banks do not inform you that a credit card is being made for you. Here are my tips to manage your credit card well:

1. Do not buy what you do not need.

When you see your credit limit, you might be tempted to turn that cash into something tangible. But knowing what you only need to live is a great way to control the impulsive behavior.

2. Do not spend what you do not have.

Although the purpose of a credit card is a loan, you should learn that even if you are waiting for your daily paycheck, you should not spend the money you still do not have in you. It will ruin your budget for the month.

3. Avoid using credit card for purchasing small regular expenses.

Small regular expenses like food should not come from swiping your credit card. You can build a habit of spending too much everyday if you keep on doing that. However, you can use your credit card for groceries and big purchases like furnitures or equipment. Just make sure you need them and you can pay when it’s due.

4. Making use of installments.

Installments are great for big purchases. Just know how much you can set aside per month before purchasing. You can make use of your banks’ loan calculator to know how much you should pay and the payment duration.

5. Pay ahead of time

Paying ahead of time helps the bank know you are responsible with money. Pay early to avoid the compounding interest, and pay higher than your actual due especially if you have an unpaid installment for your next due date. That way, interest and the payment duration is lessen.

Knowing how to manage your credit card will help you control your expenses better, with loans as good debt. Credit card will therefore become an asset, not a burden for you. Take advantage of this because these kind of privileges should not be taken for granted.

Got anymore tips you can share? Comment it below.

Published by Meg Pedro

Meg Pedro was born in the Philippines in 1993. She is a financial adviser and loves to share her learning with many. Aside from financial planning, she also loves land use planning in cities and municipalities.

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