If credit cards were horses, I would be crucified by animal lovers the way I’ve been repeating again and again that credit card bills should be paid in full every month. Banks don’t like me very much when I say this, and in fact a friend who is also a banker told me (very nicely but with a hint of acid hehe) that she would like to turn over my account on a silver platter to a competing bank.
Don’t get me wrong. I love my credit cards. I get free tickets to Butuan and Boracay every other year. I get cash rebates too. I manage my cash flows more easily and I don’t rush to payment centers anymore when Meralco says it’s time to pay up. If I could pay parking fees at the mall with my credit card, I would. But as much as I love those shiny plastic things, I hate paying interest more.
Think of this, if you have a P30,000 balance in your credit card and this has been going on for a year, you could have saved at least P12,600 just by paying interest the balance in full. And just to keep it simple, that computation is on straight interest, not even compounded interest. Imagine how many pairs of shoes you can buy with that! (Greedy laughter)
March 13th, 2008 at 5:10 pm
“The person I wish to get fired is Gloria Arroyo,…Because she don’t deserve to stay into her stolen power a minute longer for all the crimes she have done to the filipino people. But, As we all can see it she don’t want to give up her stolen power even though the filipino people already firing her. Why should she step down when there is plenty of money to be made while squatting in Malacanyang Palace. Hindi siya tanga! Ika nga!!!”
Salina ayan ka na nman…ano naman kinalaman ng credit card sa pagpapatalsik mo kay Gloria?
March 13th, 2008 at 11:29 am
1
Ian Says:
February 29th, 2008 at 3:29 pm
ano po card nila?gusto ko rin ng trip to boracay!
============
Yeah, Me too! I want a trip to borakay without a credit card. (*.*)
March 13th, 2008 at 2:11 am
8
hachiko Says:
March 3rd, 2008 at 10:00 am
Bravo Salve when u said: “credit card bills should be paid in full every month. Banks don’t like me very much when I say this…”
it’s because these card companies are VULTURES preying on society’s weak - the impulse buyers in the malls, and those desperate enough to borrow at 3.5% a month plus penalties. They can’t pick on the strong like you and me and a good number of bloggers here.
We’re all here at MoneySmarts to become financially strong and independent. So Salve, when banks don’t like us much for paying credit cards in full, consider it a badge of honor. That’s because we won’t be vulture meat!
XXXXXXX
Yep! you got it. Otherwise you end-up-giniling! he he he he….
March 12th, 2008 at 5:39 am
2
Peter Says:
February 29th, 2008 at 5:34 pm
Hi Salve-
And your continuous rantings…err..reminders did rub off to me and my wife.
We now pay ALL our credit cards in FULL. We just love using the 0%installment on new appliances we bought for our new condo. [Don’t worry, these are true blue 0% interest (we checked, only 1 price tag, and price is the same on a different store that does not offer 0%.]
Surprisingly, one of the card companies increased our credit limit (for being such good customers) without our request. I can read thru their trick, higher limit, more buying power, higher risk for finance charge (oh how I hate those 2 words). But we’ll gonna prove them wrong.
Cheers!
Peter
xxxxxxxxxxxxxxxxxxxxxx
Peter: I hope you know what you doing,…Bank is very tricky watch your back,…grrrr. I mean your credit card. Don’t blick if you do,…todas ka!
The reason I said that because no bank or company going to give you, Or anybody,…Zero interest rates without them making any money. If all bank’s going to do that they won’t be in BUSINESS! PERIOD! Prove me wrong!
Bank of America. He he he he…
March 12th, 2008 at 5:31 am
jigsdr Says:
March 3rd, 2008 at 11:19 am
I am a banker & I extremely agree with this statement “paying Credit Cards in full on due date.” For rookies in this matter, don’t be misled by the “Minimum Amount Due” as this may not even cover for the Interest Due. Unpaid Interest would only compound on your next billing. Moreover, I don’t really encourage the “Easy Payment Plans” as the Interest rate is way over the other sources of like loans.
And please don’t be swayed by the thought of prestige by owning a wallet full of Credit Cards. This may only merit “Pogi/Ganda Points” from people who wish to exploit you.
xxxxxxxxxxxxxxxx
This is a very good advice. But, My advice is why bother get credit card if you can afford to pay in cash. The only good thing having credit card when you travel just in case you run out of money you’ll have credit card to use for emergency,…And of course, You must have credit card to make reservation in any hotel.
And Yes,…some people just want to show off their credit card because they think that they’re someone special with all these card’s. I know because most of the people I know have plenty of credit card and they’re bragging on how much money they have. Duh…..
March 12th, 2008 at 5:24 am
11
maria Says:
March 3rd, 2008 at 12:50 pm
i did not plan for a c.card. i didn’t even apply for one; the bank actually sent me one. i put off using it for months until, finally, i realized i needed it for big important purchases. that was the only time i had it activated, 6 months after i received it. and i have just that one card.
i think the key word here is really responsibility. be responsible with your use of the card. know your limits. and when you make the mistake of paying late, learn from it and don’t make it again. believe me, it hurts.
by the way, also be wary of credit card companies calling about “promos”. well, maybe mine is an isolated incident. one time, an agent called me up at 10am, and offered me a “deal”–basically, he phrased it by saying that “they’re offering me money to pay off my credit card balance.” his exact words were: “igigisa kami sa sarili naming mantika.” admittedly, i’m not very knowledgeable about how business and finance worked, so i made him explain the process to me again and again and again for more than an hour. i remember even saying: “WHAT’S THE CATCH?” and he said: “NONE WHATSOEVER.” i thought i understood, so i said yes. one month later, i saw my bill and what they basically did was put the amount on installment (so i would pay less now) and gave me interest. so i freaked out. when i showed it to my sis, she explained it to me, and that’s the only time i understood. i called up the guy (i kept his number), chastised him, made him talk to my sister who chastised him some more, and demanded they remove me from that “promo”. it was such a sneaky thing for that company to do! i became wary of any calls from them after that. (which is sad, because this is a very big and respected bank/credit card provider.) it’s probably evil of me, but i hope that guy was fired.
xxxxxxxxxxxxxxxxxxxxxxxxx
Maria: Bank usually do that they’re sending people all their advertising thats the only way they can make money kong mayroon sila ma dingoy! Its up to you to fall for it. I’ve receive junk mail everyday, I read it I keep the one I want I trash the one I don’t need.
About the person you’re wishing to get fired. Don’t hold your breath, Because if this person bring in lots of business for the company chances are he be promoted. Not getting fired.
The person I wish to get fired is Gloria Arroyo,…Because she don’t deserve to stay into her stolen power a minute longer for all the crimes she have done to the filipino people. But, As we all can see it she don’t want to give up her stolen power even though the filipino people already firing her. Why should she step down when there is plenty of money to be made while squatting in Malacanyang Palace. Hindi siya tanga! Ika nga!!!
March 10th, 2008 at 4:54 am
Thanks for the post. Very informative and thought provoking.
March 8th, 2008 at 10:03 am
10
diego Says:
March 3rd, 2008 at 11:33 am
I also always pay in FULL. Problem is they always increase my credit limit to almost 100,000 because they say Im a good customer and I always pay in TIME and in the FULL amount. Now they gave my name to other credit card company enticing me to apply for another card. But Im not gullible and I will not succumb to this scheme and get another card. One card is enough for me, I can always monitor my expenses. I notice that local banks here are ” profit oriented ” than ” customer oriented “.
/////////////////////////////////
Diego: They’re on business to make money regardles! I don’t have credit card so I don’t have nothing to worry about. sasakit lang ang ulo mo sakababayad if you don’t have money. I don’t live on credit’s, I learn to live on what I can afford. If I can’t afford it I don’t buy it. Period!
March 8th, 2008 at 4:28 am
Salve: While most of my friend’s have 5/15 or more credit card’s I can be proudly say, I don’t have none! Why, Not because I’m not qualified I just don’t want it I pay everything cash If I don’t have any money to buy what I want it then I don’t buy it, Period. While some of the people I know having a hard time paying their debt’s I don’t have nothing to worry about. Ika nga walang sakit sa ulo! I don’t care if they call me KURIPOT. Nothing to be ashame being FRUGAL. I save every penny I make so that someday I have money to depend on, On a rainy day!
I’m happy not having credit card, I’m happy not having any debt’s to pay. And I’m free to do whatever I want to do. I’m a happy KURIPOT! (*.*)
March 3rd, 2008 at 12:50 pm
i did not plan for a c.card. i didn’t even apply for one; the bank actually sent me one. i put off using it for months until, finally, i realized i needed it for big important purchases. that was the only time i had it activated, 6 months after i received it. and i have just that one card.
i think the key word here is really responsibility. be responsible with your use of the card. know your limits. and when you make the mistake of paying late, learn from it and don’t make it again. believe me, it hurts.
by the way, also be wary of credit card companies calling about “promos”. well, maybe mine is an isolated incident. one time, an agent called me up at 10am, and offered me a “deal”–basically, he phrased it by saying that “they’re offering me money to pay off my credit card balance.” his exact words were: “igigisa kami sa sarili naming mantika.” admittedly, i’m not very knowledgeable about how business and finance worked, so i made him explain the process to me again and again and again for more than an hour. i remember even saying: “WHAT’S THE CATCH?” and he said: “NONE WHATSOEVER.” i thought i understood, so i said yes. one month later, i saw my bill and what they basically did was put the amount on installment (so i would pay less now) and gave me interest. so i freaked out. when i showed it to my sis, she explained it to me, and that’s the only time i understood. i called up the guy (i kept his number), chastised him, made him talk to my sister who chastised him some more, and demanded they remove me from that “promo”. it was such a sneaky thing for that company to do! i became wary of any calls from them after that. (which is sad, because this is a very big and respected bank/credit card provider.) it’s probably evil of me, but i hope that guy was fired.
March 3rd, 2008 at 11:33 am
I also always pay in FULL. Problem is they always increase my credit limit to almost 100,000 because they say Im a good customer and I always pay in TIME and in the FULL amount. Now they gave my name to other credit card company enticing me to apply for another card. But Im not gullible and I will not succumb to this scheme and get another card. One card is enough for me, I can always monitor my expenses. I notice that local banks here are ” profit oriented ” than ” customer oriented “.
March 3rd, 2008 at 11:19 am
I am a banker & I extremely agree with this statement “paying Credit Cards in full on due date.” For rookies in this matter, don’t be misled by the “Minimum Amount Due” as this may not even cover for the Interest Due. Unpaid Interest would only compound on your next billing. Moreover, I don’t really encourage the “Easy Payment Plans” as the Interest rate is way over the other sources of like loans.
And please don’t be swayed by the thought of prestige by owning a wallet full of Credit Cards. This may only merit “Pogi/Ganda Points” from people who wish to exploit you.
March 3rd, 2008 at 10:00 am
Bravo Salve when u said: “credit card bills should be paid in full every month. Banks don’t like me very much when I say this…”
it’s because these card companies are VULTURES preying on society’s weak - the impulse buyers in the malls, and those desperate enough to borrow at 3.5% a month plus penalties. They can’t pick on the strong like you and me and a good number of bloggers here.
We’re all here at MoneySmarts to become financially strong and independent. So Salve, when banks don’t like us much for paying credit cards in full, consider it a badge of honor. That’s because we won’t be vulture meat!
March 2nd, 2008 at 2:06 am
Last month, I did not receive my credit card statement. I called the customer service and checked my balance online then, I paid my balance in full. This can be tricky. You might miss your due date while waiting for you statement. You should be aware when you should be receiving my statement and when is your payment due date. It can cost you so much money if you missed your due date.
Also, don’t keep a very high credit limit if you don’t need it. In the Philippines, if you lose your card, you are responsible for purchases made in your stolen card. Always be careful of your credit cards, check them always.
March 1st, 2008 at 4:02 pm
i never really wanted to own a c.card from the start. i used to think that owning one will bury me in debt.
but when i started working in a stable company, i realized that c.cards can be acquired for ‘free’. by free, i mean no more filling up of application forms, and submitting pertinent docus. a telemarketer will call you up saying they’re doing a follow up on your c.card application (even if you didn’t submit any). then if you were enticed with the “free” card, he will get your info through the phone and all you have to do is affix your signature in a faxed application form. then in a week or two, the card is right at your desk and is ready for shopping!!
when i first “applied” for a credit card (with a bunch of telemarketers calling the office from morn to noon, it’s impossible to just ignore them–or well, maybe i was gullible), i vowed that i wouldn’t pay any finance charges.
i even checked, double checked, darn it, triple checked with the caller that the monthly billing amount will be equivalent to the amount of purchases i made within the month covered–no more,no less. Well if it’s ever ‘lesser’, then SUPER!
so when my credit limit from 20 taw shoot up to 60 taw, i wasn’t sure it’s the c.card’s company way of saying “thank you”.
one of the benefits of paying in full is a good night sleep. yup, you don’t need to receive calls from “attorneys” demanding that you pay up (coz really they couldn’t do anything more than harass you) or issue them post-dated cheques (and if it bounced,boy, you’re in biggie trouble).
i never really wanted to own a c.card. that is why i try effortlessly to maximize it by claiming every freebie i fancy and/or loading more points so i could choose a spa over a dinner for two…or like Salve, a trip to Bora!
harhar!!
March 1st, 2008 at 1:26 pm
yeah..i agree with you..its necessary to pay our credit card in full to avoid the big interest.. we should take advantage the card offers us…the delayed payment specially for the different services billing we pay through card and the zero interest….one of my card company they dont bill me in my yearly membership fee di ba cool….may local card na may master card pa…..
credited card is advatageous to us… no need to carry a big amount of cash…as long as we used it properly…..
February 29th, 2008 at 11:47 pm
i have the same attitude myself with regards to credit cards… i take full advantage of it in a financially-disciplined manner and pay the balance in full 2-3 days before due date for every billing cycle
one thing i do is take note of my billing cycle and try to spread all necessary (really needed ones as oppose to wants) purchases across different billing periods… e.g. delay needed purchase/payment after the close of a current billing period… i do this as much as possible especially for huge purchase/payments so i don’t get too burdened by time i need to clean it up.
credit card is a really a powerful financial tool if used properly and efficiently…
February 29th, 2008 at 5:35 pm
Ooops, I mean “rub on” and not “rub off”.
February 29th, 2008 at 5:34 pm
Hi Salve-
And your continuous rantings…err..reminders did rub off to me and my wife.
We now pay ALL our credit cards in FULL. We just love using the 0%installment on new appliances we bought for our new condo. [Don't worry, these are true blue 0% interest (we checked, only 1 price tag, and price is the same on a different store that does not offer 0%.]
Surprisingly, one of the card companies increased our credit limit (for being such good customers) without our request. I can read thru their trick, higher limit, more buying power, higher risk for finance charge (oh how I hate those 2 words). But we’ll gonna prove them wrong.
Cheers!
Peter
February 29th, 2008 at 3:29 pm
ano po card nila?gusto ko rin ng trip to boracay!