Credit Card Tactics - Part 2: How To Choose The Right Credit Card For You

Credit Card Tactics - Part 2: How To Choose The Right Credit Card For You. If you really want to be wise about your finances, you should choose the credit card that suits your (responsible) spending habits.
While there are numerous stories of people getting buried in debt due to usurious credit card fees and interests, there are also a lot of people who don't suffer the same fate.

I myself was afraid of getting one at first. But when I did, I eventually learned that if you handle it properly and spend responsibly, it can bring you convenience without suffering penalties and harassment from collection agencies.

But even if you already know how to handle it properly, there's still the matter of choosing the credit card that's right for you.

But a credit card is a credit card right? Well, no...

If you really want to be wise about your finances, you should choose the credit card that suits your (responsible) spending habits.

For example, if you don' have a lot of income and/or don't spend a lot, probably the the best credit card for you is one with no annual fee. Sure you could ask the annual fee to be waived, but sometimes they require you to spend a certain amount. That can be fine if the amount is equal or less to your regular expenses. Bu if it's not, and you are not willing to switch credit cards, you could get stuck paying the annual fee - which is usually around 1000 pesos a year.

So just choose the card with no annual fee, or the one with the lowest annual fee.

A lot of people are happy with the free pizza and movie passes that they get. And if pizza and movies are your thing, then it's not a bad deal. But in my opinion, people usually want more in life than just pizzas and movies.

If you like road trips, the best credit card would be one that gives you fuel rebates. The biggest hurdle for road trips is the constantly rising price of gasoline. A fuel rebate would allow you to better pursue your passion for road trips. And even if you don't like road trips, but use your car a lot, a fuel rebate credit card would still be a good idea.

If you like going to far away places, a credit card that allows you to convert rewards points to air miles might seem like a good idea. However, be sure to do the math first. I've had a credit card like that, and I've taken plane rides as well. However I've never been able to use the miles.

For one, I usually get the plane tickets during promos. And second, the rewards to air miles conversion is usually steep. I usually couldn't accumulate a lot of points without going over my budget. Your experience might be different though. But be sure to do the math first.

For most people though, I would recommend a credit card that gives rebates on your usual purchases or the stores you frequent. Although getting those rewards are nice, they're usually repetitive. For example, getting that free movie pass when you didn't plan on seeing any of the movies currently showing will really just make you spend on transportation and probably popcorn.

In contrast, when you get a rebate every time you buy groceries (as an example), you'll eventually get enough money back to buy movie tickets, pizza, or anything else you want, when you want. And if you don't want anything at the moment, just let the rebates accumulate until the time you do.

Better yet, use the rebates to pay for your usual expenses, and just invest the money you saved.

There are probably other types of credit cards out there. And if you want to be financially smart, choose the card that lets you keep more money for yourself compared to a cash transaction.

In the next part, we'll go over how to maximize your credit card without spending too much.


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photo credit: [s e l v i n] via photopin cc

4 comments:

  1. Thanks a lot! I now have ideas sa mga credit card sa pinas. I might open one when I get home

    ReplyDelete
    Replies
    1. Thanks!

      ...or maybe not. I'm not sure if rebates would extend abroad:)

      unless you meant get home for good, in which case: Welcome Back! :D hehe

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  2. Hi, ask ko lang po ano masasabi nyo sa EPS ng BPI express teller, halos sam lang di po ba sya ng Credit Card?

    ReplyDelete
    Replies
    1. Hi Anonymous. gumagamit dn ako ng EPS. Basta EPS, regardless kung anong bangko, mejo same nga ng credit card. Pinagkaiba lang, sa EPS kung hindi enough yung pera sa account di mo mabibili. Mas ok siya na pang stick sa budget.

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