Make your credit card work for not against you
November 25, 2006
A credit card is a great convenience. With just one thin square of plastic, purchases can be made wherever we are without having to bring cash. Yet some people view credit cards with suspicion, thinking it may lead their finances astray.
The truth is, your credit card can work for you or against you depending on your spending habits. If you are in control of your purchases, your credit card can be a most convenient tool.
Here’s how to make your credit card your friend.
1. Use your credit card wisely. A credit card gives you spending power, not more money to spend. When you make a purchase using your credit card, make sure you can settle the bill when it arrives.
2. Pay your bill on time every month. When you receive your bill, try to schedule payment on or even before the due date. This will help you establish a good credit history, which will be useful when you apply for a higher credit limit or a loan.
3. Choose a credit card that best fit your needs. Some credit cards offer airline mileage points for every purchase you make — this may be good for you if you’re a frequent traveler. Other credit cards have tie-ups with drugstores, gas stations and department stores, offering rebates to card members. Choose the credit card that gives you the most benefit.
4. Play your (credit) cards right. From no interest installment programs to freebies that come with select purchases, stay informed of your credit card’s marketing promotions and take advantage. You may even find paying with credit cards more rewarding than paying with cash.
5. Rack up rewards. Most credit cards today give cardholders rewards points to encourage loyal spending. Accumulated points can be exchanged for gift items, air miles, shopping and dining certificates – the list goes on. Some rewards points however may expire so check your earned points regularly and redeem them.
6. Join promotions. Card companies go all out in encouraging members to use their credit cards by cooking up raffles and other promo gimmicks. Joining is easy. Instead of throwing away flyers that come with your monthly bill, get into the habit of checking them or log on to the official website of your credit card company. Great prizes like airline tickets, vacation packages, cool cold cash, and even credit card debt wipe out are usually offered.
7. Payment problems? Talk to your credit card company. If you’re in trouble, call your creditors before they call you. You'll find that most creditors will help – they want to get paid so they will work with people who are truly interested in getting out of debt.
8. Read the fine print. Your credit card comes with terms and conditions. Make sure you have read them so there will be no surprises. You’ll also find that reading more about your credit card may lead to interesting discoveries. One credit card company for instance offers a low-cost insurance product that will protect your family from paying your unpaid balance in the event of your death or accident.
Protect your card
You’ve heard of credit card theft done here and abroad. Take precautions to protect your card as you would your cash. Here are some basic tips:
1. When you receive your card, sign immediately at the back. Your signature is valuable, and will be authenticated by merchant vendors whenever you make a purchase.
2. Keep all your credit card slips and ATM slips and compare them with your monthly billing statement. Call the credit card company hotline immediately if there is a discrepancy or a purchase you did not make.
3. Don’t write down your personal identification number or tell anyone about it. Your PIN is yours alone. Keep it confidential. Memorize it.
4. Don’t use familiar numbers for your PIN, such as your birthday or telephone number or house number. In case of theft, thieves will have a hard time breaking your PIN code.
5. Don’t let anyone use your card. All charges should be made by you.
6. Write down the hotline number of the credit card company. In case of loss, call immediately and report a lost or stolen card. All charges made after this call will be denied credit by merchant vendors and will alert authorities to apprehend the person holding the card.
7. If you are expecting a new card for an expired one, call the company in case of delay in receipt. This is to make sure your new card did not fall into the wrong hands.
8. Shred old monthly billing statements and charge slips – fraudsters would love to get their hands on them. Experts advise keeping financial records up to three years.
- From the "Take Charge of Your Money" series published on http://business.inq7.net/money/.
[tags]credit card philippines, finance guide, financial planning, financial plan, financial freedom, citibank, inquirer, philippine daily inquirer, take charge of your money, personal finance[/tags]
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