Credit card: Blessing or Curse?

A friend once asked me, “Which bank has the best credit card?” And as a former bank employee handling credit cards/personal loans, I told her, “All credit cards have the same purpose. It depends on how you will use it.” Everyone can apply and have one as long as you have a source of income. All you have to do is fill-up an application form, provide photocopy of your valid ID and latest pay slip/income tax return (ITR) as requirements.

Don't make borrowing a lifestyle
Friends, I am not encouraging you to get one but if you will use it only for emergency cases and pay everything that you purchased, you can do so. And have in mind that the following benefits are the reason why you applied for it:


1.       You don’t need to carry large sum of cash in your wallet;
2.       It is safer to bring than cash;
3.       You can make online purchasing easier and quicker;
4.       Widely accepted by a variety of merchants and businesses worldwide;
5.       For emergency purposes (unexpected visit to the hospital, buy medicines etc.) which I mentioned already;
6.       And you can enjoy bonus points to get free premium items or flights (Mabuhay Miles).

But due to extensive marketing campaigns and advertisements seen everywhere, companies are encouraging you to purchase things impulsively, things that you don’t really need. Swipe your credit card all you can! And not to teach you the proper way to handle those payables that will soon become your nightmare.

This is also the reason why you are living paycheck to paycheck. Buying clothes, gadgets and appliances that depreciate in value. If you choose to pay only the minimum amount at due date, compounded interest becomes your powerful enemy. You will notice that you are only paying for the interest only and not deducting any of your payment to your principal amount.

Unless you pay everything at due date, the total amount purchased for emergency reasons, you won’t be having problems with your credit card. And if you buy something that really gives you value. Something you purchased that grants another source of income.

        Only use your credit card up to the amount you are willing to pay for the next due date. Always remember your cut-off date, the day of every month that your statement of account generates. In that matter, you can easily monitor your purchases and have enough time to set aside your payment. Let’s say your cut-off date is every 5th of the month and due date is twenty-one (21) days after the cut-off. So all your purchases from the 6th day of the previous month up to the 4th day of the current month will be payable on the 26th day. Right? But if you will purchase after the cut-off date, purchases made will be billed next month. 

Spending your money should be a wise decision. Don’t make borrowing a lifestyle. 

Now, is your credit card a blessing or a curse?

You can simply leave a comment below if you feel there's something I can help you about your credit card.

photo: source

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