4 Things to take note when using Credit Card

Hi guys, 

So the last time I wrote about how to manage credit card, it was like 2 years ago!? The post, here

Today discussion is about 4 things to take note, before using credit card.

Opss before that, DISCLAIMER:  I hope this article will help you in some way. I ain’t no finance expertise or bank officer or something like that, so seriously, these are purely based on my own experience. 

Ok, move on....

Those old years, credit card was like a luxury things. When you had it, you may be considered as rich/ wealthy person. You own something luxury and life style. But now, seems like everybody has more than 2 credit card, agree!?

As a result, many people don’t really understand the importance of having credit card, abuse it, and the worst, snowballing down the hill, called debt.

So to avoid the pitfalls, here’s 4 things to take note to be taken note.

• Know your limits and the way you shopping

If you abuse your credit card so that you can buy your “dream outfit’, “dream gadget”, or “dream anything else”, u better had to stop dreaming. 

Yes there are lots of offers out there with 0% free interest and instalment up to 12 and 24 months. It’s good, no harms to take up this deal but my advice is that, take 1 instalment at a time. Don't be greedy and full of yourself. Example, if you’ve just bought a gigantic DSLR camera and are bound to finish paying up for 12 months instalment. Wait until you finish paying up that camera first before decided buying another gadget (which is 12 months later). The key point is take one step at a time.

• Check how much your bank interest rate is. Find the lowest one.                            

Normal rates are is 24% per annum but if you feel like it’s very troublesome to check those rates thingy, make an effort to always pay your monthly bill without fail. No paying at minimum payment please,  because it will incurred the interest charges/ late penalty fee which unnecessary, to pay.

• Check how much limits and total amount of the card.

My advice is that; take up to 2 X salary so at least if you overspending, you still have a chance to clear your debts easily.  From my experience many banks will give you cash loan up to 5 X salary but what’s the point if the money is bank loan not my money, do you get my point?

Limit your credit card by having 1 credit card per bank. Keep in your wallet 1 or 2, the card that you often use, and the rest, keep it at home. When you're applying credit card and they persuade you to apply more, just politely say no. It's fine. 

Well, it’s good to have 1 Visa and 1 Mastercard especially for travelling purposes, too. Or maybe 1 American Express if you could afford....

The key point is, paying cash is much better than paying by credit card. And owning tons of credit card doesn’t mean that you are rich or something. Nothing to be proud about.

• Promo and reward

One of the advantages of having credit card is of course, promo and rewards. That's one of my favourites. Buying online is such a click away. Buying or dining is very easy coz you don't need to find ATM to withdraw cash first. You can collect rewards point, too, if the merchant has partnership and promo program.

If you like travelling, why don’t sign up for Tiger AIr Standard Chartered CC to earn point and enjoy travel perks? 

If you like to dine in, Manhattan Standard Chartered CC is best suit for you. 

Aunty likes to go NTUC, can sign up NTUC Plus! OCBC CC to earn link points and enjoy 8% off Fairprice purchase.

Likes to shop, ladies? Maybe UOB Lady's Card is the best for you, girls. Lots of promotion such as Charles & Keith, Forever 21, Bysi, and many many more. Not only enjoy the promo but you can earn UNI$, too.

So evaluate your lifestyle and own the credit card which suit best on you :-)

Till next time. Ciao.