Adulting 101: Credit Cards
Ah, yes. You get your first taste of plastic. It’s luxurious, it’s like you feel like you’re worthy of being on Forbes’ Billionaire list with Kylie. However, you must also remember with great plastic comes great responsibility. A credit card can offer you the great convenience of having to pay for everything without cash and it’s perfect for emergency buys (an extra round of mojitos is not classified as an emergency). BUT, also it can be a pain in the ass if you don’t know anything about interest rates and other hidden fees.
Ask Your Bank
If you’ve been with a bank for awhile now, they should be offering you a card any minute now. If not, you can let them know that you’re interested in getting one. They’ll review your current bank records to see if you fit the bill. If not, you can always ask the sales reps in the malls. Ask everything you can about the card, hidden fees, annual fees, interest rates, and other practical items. Do not fall into the trap of signing up for a credit card because they offer you a freebie!
Scout for the Right One
Look for a card that has a lifetime of NO annual fees. Annual fees are a bitch. Also, look into cards that have low interest in case of the deadly scenario you couldn’t pay on time. The lower the interest rate, the better. Also, does it come with a globally accredited credit line? You’d want something with a Visa or MasterCard seal as most establishments (locally and internationally) honor this.
Always Pay in Full
Speaking of interest rates and paying your credit card in full every month, don’t fall for the trap of paying the minimum due. Why do banks show you the “minimum” due on the bill? Well, the later you pay in full, the more money they make through interest rates. Banks make zero money if you pay in full every single time, you’ll be called a “deadbeat” by the bank, but that’s fine! That only means you don’t pay any interest rates! If you only may the minimum due every month, you’ll end up paying for what you shopped+more for if you garner more interest; you don’t want that!
Messing up Once Is Dangerous
Say you forgot to pay your bill once and you have 1% interest if you pay late. The bank has every right to increase your interest the next month if you screw up once. Consider it a “the trust is broken” fee. Thus, paying in full and on time is super important!
Never Buy More Than You Can Pay
Credit cards allow you to buy shit you initially can’t, because you’re literally borrowing money from them. This is where a lot of people get in trouble. Just because they gave you a P100,000 credit limit, doesn’t mean you have to spend it all in one go! It’s actually better if you get a credit line you’re sure you can pay in case you go overboard. Everytime an agent sells you a higher credit line, refuse. It’s a trap! It’s also good to keep track of your spending with the card.
Don’t Fall for the “Rewards”
A lot of credit cards will flash you with freebies and trips to your dream destinations. However, don’t fall into it, it’s another trap.
Ready to get some plastic in your life? Let us know in the comments on what you first spend with it!