CREDIT CARD BASICS + PROS AND CONS
I grew up in a family who never trusted banks most especially credit cards because they believe that having a credit card is a way na mabaon sa utang at maraming hidden charges.
With the help of research and some friends working in the bank, I have learned that credit cards are neither good or bad but rather, it is a neutral tool that can either help or give you problems depending on how you use it.
Now if nag-iisip ka kung mag-aaply ka para kumuha ng credit card o hindi, here are some basics pati na pros and cons that can help:
WHAT IS A CREDIT CARD?A piece of plastic na pwede mong gamitin to pay for goods and services. The amount that you swiped is AN AMOUNT THAT YOU OWE THE BANK. In short, utang mo iyan. Pero 'wag matakot sa word na utang as long as you can pay in full and on time.
HOW TO APPLY FOR A CREDIT CARDA. Physical appearance in the bank
B. Apply online in credible and secure websites
C. Mall walk-ins (with freebies)
TIP: The requirements are all the same no matter kung saang channel ang pag-aapplyan mo.
WHAT ARE THE REQUIREMENTS?1. Filled-out application form
2. Government-issued ID (laminated IDs only are not accepted. It should be passport, PRC license, SSS or Driver's License)
3. Proof of income (you may ask the bank or you may check their website).
TIP: Around 15-20k minimum income, you may be approved.
HOW TO GET EASILY APPROVED1. Existing relationship with the bank
- bank/checking account, credit history or loan history.
2. Should not be in the Negative Data Bank
- A pool of names with a history of delinquency sa kahit anong transactions sa bank.
WHAT TYPE OF CARD SHOULD YOU GET- Apply for a card that fits your lifestyle.
1. Points earning - earn points for a certain amount of spend and once accumulated, you may use to avail merchandise or vouchers in their catalogues.
2. Rebates/Discounts - get cashbacks for every certain purchase amounts. Can be in grocery stores or gas stations.
3. Miles - you get miles that you can convert to book flights or hotel stays.
TIP: Cards like BPI Amore cashback will let you earn 4% cashback for every P1,000 purchase in grocery stores.
PROS:
1. Convenience & security - You don't have to bring loads of cash when you purchase. When you're overseas, you don't have to worry if malulugi ka sa foreign exchange if hindi mo naubos lahat ng pinagpalit mong peso to foreign currency. Just make sure na ipaalam mo sa bank if pupunta ka ng ibang bansa.
2. Helps with your cashflow - You may use installment option if it's zero interest para makabili ng gamit without shelling out the full amount in one purchase.
3. Deals and offers - Maraming tie-ups and benefits that you may use in their partner merchants.
4. Build your credit profile and history - Ito ang pinakamadaling way para magkaroon ng magandang relationship with your bank para sa future ay pwede ka nang kumuha ng loans for business and mag-bank financing for your car or house.
5. Helpful during emergencies - You will have a contigency plan in case you would need an aid pagdating sa finances in the future.
CONS:
1. You may overspend - Minsan hindi mo mamamalayan ang pag-gastos ng pera.
2. You can get into debt - If you're not knowledgeable enough how to use your card, pwedeng maibaon ka sa utang. Kaya magresearch muna.
3. Highest interest rate across all products - Malaki ang interest at add-on rate pagdating sa pagkuha ng loans.
4. Maraming scams and frauds involved - There's a risk of phising of information through various channels. Just avoid or report any e-mails or calls requesting for your credit card information without any purchases.
5. You may have your information added in the Negative Data Bank - If you're a delinquent credit card user, you will be marked for life and you will have a very slim chance na mag-avail ng future loans, kahit saang bangko pa yan.
Here are a few of the basic on how a credit card works. It's not a bad tool, it depends on how you use it.
Reference: Moneymax, Thea Sy Bautista Youtube Channel
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