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 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!