How to Use the Credit Card and Not Go Into Debt

I grew up thinking that credit card was instant money and that all people who have credit cards are rich. For a while, I thought, we, a family of nine were rich because with a simple swipe of a card. But unknown to me growing up were the credit card bills that were taken cared of. I have come into a conclusion that getting a credit card would be a financial burden to me unless I will learn how to use the credit card and not go into debt.

Fast forward to 3 years in to marriage and with a spouse who also is mindful of our finances and how we manage our family finances. We decided to apply for a credit card with large purchases in mind.

We applied for a credit card from a bank where we have two of our stagnant savings funds. We just applied online for Gold card under my husband’s name and was hoping to get at least 50,000PHP minimum credit limit. When the card arrived a week after the application, we were shocked to find a Platinum credit card with a limit a couple of times more than what we expected. At first I was wary and afraid that we would get into debt but we devised a plan on how to use our credit card and maximize it without going into debt.

Know the Use for Credit Card

We decided to get a credit card for large purchases and also our usual monthly groceries. That way we do not have to bring cash or use our bank cards with the possibility our bank card details to get stolen. We also travel a lot, so we wanted a credit card to use for our travels so we don’t get excessively charged using our bank cards.

List All Purchases

Now this might come as an additional work for you and you might say, “what is the use of a billing statement?” Husband and I write every purchase we do in a shared Google Excel Sheet. This allows us to track how much we are spending and make sure we are not spending over our budget. The list also comes in handy to spot check if there are any fraudulent transactions made with the credit card. At one glance you can easily see that the billing statement is not balanced with the credit card purchase list you have.

Don’t Purchase on Installments

One of the selling point for credit cards is the ability to purchase an item and pay for it via installment. And while this is helpful for some people, it is also the quickest way to get into debt with credit cards. Installment payments offers a staggered payment but it has interest on top of the item price. So instead of saving, you are actually paying extra on interest because you bought the item on installment basis.

Never Swipe If You Do Not Have The Money To Pay For It

One of the smartest way to handle and use a credit card is knowing when to use it and when NOT to use it. Only use it when you have the money or funds to pay for the purchase. If you do not have the funds for to pay for it, that would mean your are spending more than what you have. If you miss payments, this will show in your credit standing. Remember a bad credit standing is not good when you have plans to apply for home, car or even emergency loans in other banks or lending institutions in the future.

Pay in Full and on Time

Credit card companies and banks offers a minimum required amount to pay when your billing statement comes through. Much as that is a saving grace, it could also be one step to pulling you into debt. Paying just the required minimum payment means you have some balance left needing to be paid off. But if you continue to swipe and use your card, that balance will increase and increase until you will get overwhelmed by the payment. If you’re paying only the required minimum, you are also adding interest to your balance and thereby spending more than what you have spent on. The interest might not be that big at one glance but if you add all the interest you get every month, you will be shocked to find out that the compounded interest is really high at the end of the year.

Ask for Credit Card Annual Fee Waived

Most banks allow annual credit card fee to be waived when a minimum purchase is made on the credit card. Before applying for a credit card, ask the bank first on their policy on waiving the annual credit card fee. You can all the bank and request the fee to be waived when the billing statement comes out. They usually confirm it over the phone and the next billing statement will show a waived annual fee. This is only applicable if you have a good credit standing. That means you pay your credit card bills on time and never missed a payment.


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