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 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!!