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WHEN the going get tough the tough go shopping—and usually armed
with a wad of plastic cards. It goes without saying that owning one
or more credit cards offer a multitude of benefits, whether it’s
simply a matter of convenience or as substantial as establishing
creditworthiness. (Though having to click your heels and hang about
at a supermarket checkout while the shopper in front uses a credit
card transaction to pay a grocery bill of P100 can be irritating to
say the least!)
But as entrepreneur and reputed financial
analyst and advisor Francisco Colayco points out, not many people
are aware of how to make the most out of their credit cards, and
many actually find the dues piling up sooner than they had imagined.
“Most income earners end up being in debt the
moment credit is made available to them. To give you an example,
survey after survey shows that as many as 80 percent of most
employees in all forms of organizations are neck deep in debt from
loans made available by third parties payable through salary
deduction,” explains Colayco.
He goes on, “Others get tempted to use credit
cards to purchase things they really do not need mainly because they
happen to have the credit card with them as they simply walk around
the malls. Basically, the phenomenon is the result of a mindset that
is narrowly focused on living a lifestyle whether or not it is
within one’s means.”
According to Colayco, a common misconception is
that a credit line is a ready source to be used for any
personal purpose, and that people tend to look at any unused
credit as their “own money.” To avoid this irresponsible use of
credit cards, he says, one must simply accept the actuality that
credit is other people’s money: it carries high interest cost and
must be repaid.
Once a cardholder is aware of these realities,
it becomes easier to use credit to his or her advantage. Popular
examples are ongoing tie-ups of credit card issuers with established
service providers like airlines and retail outlets such as
supermarkets and malls. These are generally good promotions that you
can use to your advantage such as enjoying rebates or rewards.
But that’s just an added bonus, Colayco points
out. If a cardholder gets into the good habit of paying on time, he
or she establishes what is called good credit—which can lead to
many monetary benefits in the future.
Nowadays, all financial institutions,
particularly banks conduct credit and background checks on
borrowers. Personal credit card records form part of the database
available for credit checks. It is crucial to maintain a
positive record of your credit card profiles. This way, your credit
rating when you apply for other types of credit (e.g. housing, car
loans, etc) will be positively high.
Another helpful tip is to be on the look-out for
promos that can help you maintain your good credit standing, just
like 0 percent balance transfers or lower-interest cards that reduce
your minimum monthly payments!
One such promo is Metro-bank Card
Corporation’s 0 percent Acqui BT, an acquisition program tied up
with the Balance Transfer offer at 0 percent interest for 6 months,
wherein the applicant can get a Metrobank credit card and at
the same time avail of Balance Transfer.
Colayco concludes: “Remember, your credit card
can be your best ally or your worst enemy. If you use your card
irresponsibly, you can lose opportunities for upgrading your
financial life. But if you utilize it conscientiously and pay on
time, you will see your financial resources grow.”
Email:bizzfizz_98@yahoo.com
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