Credit cards are life savers. When you run out of cash, with it, you may definitely buy now and pay later. However, there are also some credit card holders who have their own horror stories when it comes to owning one, usually due to misuse and lack of discipline. We at Cebuana Lhuillier value your insight regarding your expenses and financial choices as well. Hence, we created a list of things to consider before applying for a credit card.
1. Spending habits
Everything begins with you. It is your choice and your choice alone that would determines whether you are ready to own a credit card or not. Are you the type of person who would spend for an expensive gadget every time a new model is released? Or are you the type of person who would instead save for future emergencies. It is important to know your ability to self-discipline, especially when it comes to spending, as owning a credit card may also bring temptations to purchase many items without realizing the risk of going over the limit.
2. Credit limit
Payment using a credit card is basically like borrowing money from the bank. Credit limit is set by the bank (depending on the conditions discussed during your application) so that you may only avail within a certain range of amount. If you lose track of your spending, there is a strong possibility that you will go over the limit. Most of the time, this will result in a bad credit history, which may help the bank decide whether they would still let you borrow money in the future or not.
3. Penalties and charges
This is one of the many scary things that may happen when you go over your spending limit. Aside from a bad credit history, you will also get fined for going over the limit. This isn’t just the end of your expense, as other fees would be asked from you. Some of the transactions you had done with your credit card (including buying a new gadget) would include transaction fees in them, the same way that service charge will be asked of you when you dine in expensive restaurants. Think of them as the cost of serving you in your transactions.
Charges aside, there are also good points in using a credit card. Some banks would provide reward points every time you use the said item to avail items or services. Of course, there is a catch in this type of reward system. Sometimes, you may have to use the credit card a certain number of times to acquire a single point. The bank initiated this rewards program to make sure that you use the card. No worries though, as long as you are within your limit, the possibility of attaining your reward is higher than gaining penalty due to overspending.
5. Interest rates
Remember when we said that using a credit card to avail items and services is like borrowing money from the bank? Each time you use your card, there is a certain interest that you’d have to pay for that “borrowed” money. Consider researching on the particular interest rates of a bank before applying for their credit card. If you’re going to pay that “borrowed” money in full every month, then the interest rate wouldn’t matter to you. However, if you plan to carry that certain “debt,” you may want to consider a lower interest rate, as they accumulate each particular time passes that you don’t pay your “debt.”
With all that has been said, owning a credit card requires complete self-control and discipline in spending. If you wouldn’t want to have horror stories of your own, then be sure to pay for the charges of your transactions, and with great ease. Cebuana Lhuillier offers their Bills Payment services in their 1,800 branches nationwide. All transactions are online and are completed quickly and safely. Its current partners (such as Metrobank Credit Card) also include major telecommunication networks, insurance companies, online businesses, and schools. So what are you waiting for? Visit your nearest Cebuana Lhuillier branch now – we assure a fast, easy, and secure transaction.