Before I give you the details of my tips, I want to share how I used my credit card effectively.
- Enroll the bills utilities (such as telephone bills, internet service provider, electricity and water bill)
- Use the credit card only if necessary (There are establishments and transactions that only accept credit card)
- Pay the full amount of the purchases made for each billing cycle.
- Be wise enough not to be persuaded by telemarketers offering “credit card privileges” such as Cash on Hand and other stuff payable in terms
- Use only the amount you have the capability of paying in full in the next billing cycle.
- Pay on or before the due date.
Owning a credit card for years, I should say that I have experienced a lot of difficulties before I truly learned how to use it. I used to be the princess of the malls, appliance centers, and expensive restaurants and would you believe even in Home TV Shopping. Swiping the plastic money became my favourite hobby, I became a shopaholic, not really purchasing items for myself but more on groceries and appliances. We even enjoyed the pleasure of “expensive restaurants” once in a while. As a health freak and a desperate biggest loser I even shopped for gym equipment from the home tv shopping. Oh well I have the plastic money anyway. The easiest way to buy these stuff… as if I can hear Kris Aquino’s ( a well known TV Game Show Hostess) voice saying “Ikaskas na ‘yan” meaning swipe the card.
Yes no problem, I was earning good anyway, I can pay the “minimum amount due”. How did we become enemies? As I pay the “minimum amount due” regularly I noticed that only a minimal amount had been deducted from my total amount due. I mean even if I pay for the month, I only pay more for the finance charges. I also noticed that my cash on hand is getting little and little and I am becoming dependent to that thing, yes that thing, the plastic money. I felt like that I was stuck in the quick sand of debt, and the only thing that I hold onto was my credit card. So, with this realization, I started working double time, SAVE MONEY and NEVER use the card anymore. Pay the grocery in cash and never shop again. Then I payed the biggest amount I can pay monthly until the total balance became ZERO. Cut the card. Finished.
After a persuasion from a friend, I got a credit card again. Learning from the past, I started to think how can I use my credit card effectively.
- I enrolled the bills utilities because I have no choice but to pay them in cash anyway. IN this manner, I am assured that our utilities will not be disrupted from their services. Aside from this I earn from these “regular expenses”. Do you know why? Usually the credit cards have a REBATE or cash back program, a certain amount will be placed as your rebates when you use the card to purchase. Isn’t that a good idea?
- Use the credit card only if necessary. I used to travel from different places so I use my credit card to purchase tickets. The tickets would surely cost a lot, and I can’t pay them in full, in one billing cycle, so what I do is to have it enrolled in the Paylite program. What is Paylite Program? This is a fixed interest rate on the purchases made. The idea of the Paylite Program is to let the creditors to pay a smaller amount payable for 6, 12, 18, 24 months. The shorter the months the bigger the amount payable and lesser interest. The credit is taken by monthly (as if you have purchased to amounting the payable amount in advance so therefore it won’t earn finance charge anymore as long as the amount due (total) has been payed and not only the minimum amount due). I am doing this if I am sure that I can’t pay the total amount in cash for the next billing cycle.
- I always see to it, that I am NOT paying the MINIMUM AMOUNT DUE, hence I will pay for the TOTAL AMOUNT. So no accumulated interest or NO Finance Charge, at all.
- NO TO TELEMARKERTERS: As they always say “I am a client of good standing and my balance is always ZERO” the credit card company is not really earning from me except the interest they get from my Paylite purchases. They will always call and persuade me to get CASH on HAND payable for this number of months , for only this amount because the interest is only this much. I will just say NO thanks and I am not interested. They offer a lot of things like laptop, ipad phone etc. I just refused these offers.
- Purchase only on the amount you are capable of paying. No more than that.
- Pay on or before the due date. I see to it that my card is paid before or on the due date because I don’t like to be penalized with late payment charges which is actually a huge amount.
***What I really, really like in credit card is I can use my money more. I mean, it has 21-day cycle period meaning I can still use my money for 21 days more.
I use the rebates I earned from accumulated purchases and services to pay my next credit card bill or at least deduct the equivalent amount from the total amount I will pay for the month. So I will end up paying a smaller monthly due.
This is how my enemy credit card became my reliable friend. If I need really need something I use it, most of the time it is just resting in my wallet.
A friendly reminder, have the self discipline and don’t allow the credit card to run and ruin your life.
“Life was a lot simpler when what we honored was father and mother rather than all major credit cards”.
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