MANILA, Philippines - Credit cards are becoming essential for individuals in today’s lifestyle, allowing consumers to enjoy perks and deals that come with their use.
And cards have also become an emergency tool when an unexpected expense comes along.
While cards also double as a financial management tools allowing one to keep track of expenses, some cardholders are still unaware on how to best manage and pay down their debts, so as to avoid serious default on their cards.
The Credit Card Association of the Philippines (CCAP) offers advice on how one should use their cards responsibly.
CCAP executive director and spokesperson Alex Ilagan suggests that cardholders maintain their credit in good standing by paying the total outstanding balance – or at the very least, the minimum amount due – on or before the due date.
Ilagan reminds that finance charges are only imposed when balances are not settled in full on due dates, thus underscoring the importance of checking statements of account for transaction details and due dates.
“Always pay your bills on time to avoid penalties. Remember, you will not be charged any interest if you settle your balance in full on or before your due date. When paying by check or through any ATM, you also have to take into consideration the three-day clearing window,†he noted.
If the cardholder ran up a total bill of P1,000 during the month but decides to pay only P999, the cardholder could be charged interest on the whole P1,000 because of the P1 deficit.
CCAP also would like to offer this simple mantra for the rest of the year: “Charge your credit card with things that you can afford and eventually pay for.†Ilagan also adds, “Remember that making a list in advance and setting a budget will save you from payment worries.â€
In settling card bills and to avoid incurring any late payment charges, Ilagan also suggests to pay direct debit from the cardholder’s bank account. In this way, consumers are assured that bills payment will be facilitated in a timely manner.
Also cardholders should spend within their credit limit to avoid additional charges.
“All the above requires a sense of responsibility in its use to reap the full benefits of credit cards,†said the CCAP official.
In the end, cards remain to be a great way to track expenses than cash where individuals just have to rely on their memory.
“What’s more, cards give you rewards plus discounts and perks that may not be available when paying via cash,†he concludes.
CCAP is an association of credit card issuers whose objectives are to foster credit awareness, improve financial literacy while expanding acceptance channels in the country.