A credit card may sound like the answer to your financial woes as it can give you a bit of wiggle room, especially during lean periods. Additionally, credit cards can help you manage major purchases by providing flexible payment schemes to fit your income availability; they also give a financial boost during emergencies or other situations that require immediate funding. With these benefits, credit cards can indeed be a useful tool for handling your personal finances and helping you live a fuller life.
However, before you assume that having a credit card gives you free rein to spend, remember that the liberties it provides come with certain responsibilities. Whether you have previously used a credit card or are about to apply for your first one, you should keep the following best practices in mind so that you can get the most out of your credit card without falling into bad debt. Here are 5 tips on using your credit card responsibly.
Choose A Card that Fits Your Needs and Lifestyle
Not all credit cards are created equal, and this statement holds truest once you consider the specific features and benefits each type of card offers. Whether you’re looking for travel perks, cashback points, or exclusive rewards, there’s an EastWest credit card for you.
If you travel frequently, whether for work or as a hobby, you can enjoy a variety of benefits such as permanently waived annual membership fees, exclusive airport lounge access, minimal foreign exchange conversion fees, and of course, airline miles. Choose from EastWest Bank’s range of travel credit cards, including the Priority Visa Infinite, Platinum Mastercard, JCB Platinum, Singapore Airlines KrisFlyer World Mastercard, or the Singapore Airlines KrisFlyer Platinum Mastercard for more perks as you explore the world.
However, if you prefer cashback points or rebates that can help you cut costs on shopping and bills, then you can go for an EastWest Bank cashback credit card like the Visa Platinum or the EveryDay Titanium Mastercard.
Finally, you can also earn rewards points that you can use for purchases or discounts and privileges from partner establishments, thanks to EastWest Bank rewards credit cards. These include the Dolce Vita Titanium Mastercard, JCB Gold, Gold Mastercard, Gold Visa, Privilege Mastercard, or Privilege Visa. Also, certain credit cards come with added perks like travel insurance and rewards vouchers that you can exchange for gift certificates; just make sure to do your research so you can choose the card with the benefits that you can actually use and enjoy.
Be Aware of Interest Charges and Other Fees
Credit cards come with a host of advantages and perks that are undoubtedly enticing, but bear in mind, as we’ve said, that being a credit card holder comes with responsibilities. Among these duties is being conscious of interest rates and credit card fees that may not be so obvious to you when you first get your card. The Bangko Sentral ng Pilipinas has set the maximum interest rate on unpaid outstanding credit card balances to 3% per month or 36% annually, but there’s an add-on interest rate when you use your credit card for other services like installment payments. In addition, you should know about other fees like late payment fees, cash advance fees, processing fees, and others that can easily add up to increase your monthly bill.
Pay Bills on Time
Probably the most important piece of advice for any credit card holder, no matter the type of card or credit limit, is to pay your bill on time, and if possible, in full. By paying your credit card bill on time, you avoid having to pay interest, as well as late payment fees, on top of the amount you originally owe. Plus, it makes for a good credit score, which is helpful when you apply for a loan or another credit account. Moreover, paying your bills on time is a good habit that can save you from incurring debt.
Don’t Apply for Several Credits Cards Within a Short Period
Once you’ve started using your credit card and see how easy it is to just swipe whenever you need to buy or pay for something, it might be tempting to get another credit card (perhaps for its unique benefit package or to use for a specific purpose). However, opening too many credit accounts in a short span of time can lead to unwarranted spending and debt. Having too many credit cards can make it difficult for you to track your spending and payment due. Keeping up with the terms for each card might also become confusing, which can cause you to overlook certain fees or penalties. Hence, it’s best to stick to just one card, for the moment, at least until you have mastered using your current credit card.
Spend within Your Means
While a credit card can offer flexibility when it comes to managing your expenses, you should remind yourself that the “money” you’re supposedly spending when you use it is still just borrowed. A credit card can be a great tool for planning major purchases or for helping you accomplish certain goals, but always be aware of whether or not your current income can cover your credit card bill once the due date comes. Whether you’re a credit card holder or not, living within (or even below) your means is practical guidance.
Having a credit card opens several opportunities to improve your life and those of your loved ones with just a few swipes, but as with everything else, moderation and discipline are key. Being a responsible credit card holder allows you to take advantage of buying or paying ahead while enjoying travel, cash back, rebates, and other benefits. More importantly, it helps you maintain a good credit score that can come in handy in critical moments.
Apply for EastWest Credit Card?
With a variety of options to suit different needs, EastWest Bank offers competitive rates, valuable rewards, and excellent customer service.
