Credit card usage may have gained unsavory reputation among those who have been ensnared by its lure of extending consumer’s purchasing power over and beyond one’s capacity to pay, but to those who can manage well, a credit card might just be the key to unlock opportunities to improve their economic standing.
Below are some of the ways a credit card may help you achieve your financial goals:
START A BUSINESS THAT WILL EARN PASSIVE INCOME TO SUPPLEMENT YOUR MONTHLY SALARY
If you’re looking for ways to supplement your salary, you can start a business that could generate passive income while you’re doing a regular job. If your finances are in survival mode, or if your savings are barely enough to cover emergencies, you can tap your credit card for the required capital. Credit cards like Citibank and Metrobank offer cash installment loans at fixed monthly rates of .60% to .99% of the principal minus the hassle of applying for regular bank loans (feasibility study, pay slip or audited financial statements, photocopy of bank statements for the past 6 months, identification documents, time constraints, etc.). Not a few cardholders resort to taking out cash advance to fund immediate business opportunity and just have the cash advance amount transferred to other credit card companies at a lower interest rate.
If you or another family member have adequate knowledge about transportation business, your loan proceeds could be used to buy a unit of passenger utility vehicle like a jeepney, tricycle, pedicab, or even a taxi unit. You can then let it out to a responsible and LTO-licensed neighbour or relative for a daily fee or a boundary. Passenger jeepneys could fetch from P400 to P700 daily, depending on the route. Tricycles could earn you P100 to P140 daily. Pedicabs in some villages will bring you a daily fee of P50 to P60. Taxi cabs can earn from P800 to P1,300 daily. The accumulated daily earnings from this business should be enough to pay off your credit card monthly installment due and give you surplus cash for emergency expenses, savings, or business expansion. Don’t forget to allocate for renewal of registration, franchise and/or line, and provision for adequate vehicle insurance. The business you start may pave the way to the financial freedom that your present job could not provide.
Another avenue to explore is setting up a partnership with you as the capitalist and the other partner/partners as the industrial partner, or the one who actively handles the operations. This may work in food businesses like restaurants, fastfood service, dimsum stand, porridge or congee stand, or barbecue stand. You may also choose to engage in rural businesses like backyard piggery or poultry raising with a trusted relative or friend in the province. The possibilities are endless.
FUND A BUSINESS THAT WILL REPLACE YOUR SALARY FROM A REGULAR JOB
You may have lost your job for reasons beyond your control – retrenchment, business reversals and closure, cost-cutting, etc., or you may have decided on leaving your job to start a business that you think will allow you to devote more time to yourself and your family and provide you with better returns than your salary. Instead of using your savings, you may opt to use your credit card to fund the start-up costs for your dream business.
Businesses that you could start by swiping your credit card include purified water/laundry franchise, gaming or internet shop, Xerox, school and office supplies business, mini-grocery business or sari-sari store, t-shirt printing, printing business, product distributorship and dealership.
A purified water business is a lucrative one, hence, expect a stiff competition. Providing the best service at the lowest price is the key to winning customers in this business. Due to completion, price could go as low as P17 per 5-gallon container in some areas. As in any business, keeping your costs in check is very important. Some franchisors offer a dual franchise – purified water business with laundry business. This is to offset the water wastage that goes with their purifying process.
You may also start a gaming or internet shop through your card. Go to stores or shops that sell brand new and customized computer packages. You can find shops that offer computer sets at prices that are much, much lower than better-known computer stores in the mall. Use the internet to find those shops, or get referral from a friend with technical know-how.
If you prefer simpler businesses, you can start mini grocery stores right at your own home using your credit card. You can take advantage of the float from date of purchase to payment due date. If you make your first stocks purchase immediately after a cut-off date, payment date may still be 51 to 53 days after the date of purchase. This will give you time to earn your own capital out of the daily profit margin from sales.
If your preferred supplier does not accept credit cards, you may also choose to avail of instalment loan from your credit card provider. Some sellers offering goods at incredibly lower prices than their competitors may accept credit cards on a straight payment basis, but expect an upfront charge of around 5% of the cash purchase price in spite of DTI’s policy against such business practice.
Using your own funds to start a business is almost always the best option, but you need not despair at the prospect of losing good opportunities that may knock at your door just because your cash position is far from ideal. Make use of what you have worked hard to achieve – a good and unsullied credit reputation.