In most cases, I prefer to pay for my purchases in cash. This is mainly because I derive great peace of mind from knowing exactly how much money I have left, net of any liabilities like credit card debt, and the thought of not-so-accidentally racking up a huge bill (even if it’s rather far-fetched) makes me palpitate. Yikes.
That being said, I do keep a couple of credit cards because they do come in handy. In some cases, they can even be preferable to cash! *gasp!*
1. Online Shopping.
Local online sellers do accept bank deposits or even electronic fund transfers (my personal favorite) as payment, but credit cards allow you to purchase from international websites. Yep, legitimate online shopping platforms like Amazon, Sephora, and eBay all accept payments from reputable credit card issuers regardless of how much your total purchase is, giving you access to a wider variety of goods that might not be available in the Philippines.
They make refunds easier too. I once ordered a package from a US retailer, only to find out that my forwarding service can’t exactly ship it to the Philippines. When I notified the seller, the company simply canceled the charge to my card, sparing me the hassle of having to wait for them to refund any cash or debit payments.
As for security, most reputable international online retailers employ features such as data encryption to make your Internet shopping experience as worry-free as possible, while major credit card companies also equip their users with safety features like daily activity updates and one-time passwords (OTP’s).
2. Keeping Track of Your Spending.
Credit card bills itemize your expenses within the cut-off period, allowing you to review where you spend a significant amount of your income. For instance, your monthly statement could draw attention to a coffee shop habit that is costing you more than you budget for, or weekly trips to the salon that might be getting out of hand, allowing you to cut back as needed.
3. Bills Payment.
Are you the type who constantly has to pay penalties for forgetting to settle your electricity and water bills? Do you find yourself too busy to drop by the bank for other monthly payables? No worries, your credit card has got you covered.
Practically all the utility providers in the country allow their customers to enroll their credit cards in an auto-payment program, where your bills are automatically charged to your card as they come due. This thus enables you to settle all of them with a lump-sum payment once a month, giving you one less thing to worry about.
4. Special Promotions.
I was once able to treat my family to a nice lunch at a popular hotel buffet in the city without blowing my entire monthly paycheck, thanks to my credit card’s 50% promo at the time. Nice.
Due to some rather stiff competition, a lot of credit-card issuing banks have been outdoing each other in offering their cardholders some pretty sweet deals. I know of a colleague who manages to frequent Japan, for instance, since the points he accumulates on his credit card practically merits him free plane tickets.
Not fond of either fine dining or air travel? Some credit cards also offer to convert your points into gift certificates or virtual cash that you can use to purchase essentials at a department store.
5. Installment Plans.
Used wisely, credit cards allow you to make large purchases that are divided up into lighter payments.
For example, if your trusty work laptop suddenly needs to be replaced, you can easily get a new one without having to shell out, say Php30,000 or Php40,000 at once. That way, you don’t lose your livelihood and aren’t forced to live on crackers and water for a month just to pay for the replacement.
Best of all, these installment plans are zero-percent interest deals, so you don’t have to worry about paying more than you should for your big-ticket buys.
6. Going Abroad.
Running out of cash and having no ATM in sight is bad enough in your home country, but it can be downright heart attack-inducing when you’re abroad.
Active credit cards not only greatly reduce your worries and anxieties in such cases, but they also remove the need for scrambling around for a decent money changer since you can just pay directly with plastic anywhere in the world. As a bonus, a lot of credit cards offer some pretty competitive exchange rates too, potentially netting you additional savings.
Okay, so we’ve established that credit cards are alright and that they can even be great in some cases. However, do note that they still require a degree of financial responsibility. If you’re currently already drowning in debt, for instance, it would be wiser for you to keep your cards away for the time being. Furthermore, no amount of 0% installment plans will matter if you keep swiping away like a rap star in a cheesy music video and end up charging more than you can afford to pay.
But if you can keep a cool head, have pretty good self-control, and happen to have extra money earmarked for your discretionary expenses, then go ahead and take full advantage of all the benefits that comes with your plastic.