Is owning a credit card expensive? Will it get me into deep debt? Should I use my card less? These questions are probably running through your mind when you think of credit cards.
However, such worries are just based on irrational fears of Pinoys about credit cards. In fact, you can use a credit card to your advantage. When you manage your card properly, you can minimize the costs of owning a plastic card.
Here are some smart credit card hacks in the Philippines that will save you money.
Check Out These Helpful Credit Card Hacks
1. Get an Annual Fee Waiver
Credit card annual fees in the Philippines can go as high as PHP 6,000. Although you pay them only once a year, the amount can still put a dent in your budget.
But know that there’s no need to shell out a certain amount every year for using your credit card. Instead, you can allocate this money for your savings or as an addition to your investments.
Consider taking advantage of waived annual fees. Some banks allow their cardholders to have their annual fee waived, as long as they use their card regularly and are in good credit standing. You may contact your issuing bank to request an annual fee waiver.
Another way to avoid paying annual fees is to use your accumulated rewards points to redeem an annual fee waiver. Or you might want to switch to a credit card with no annual fee.
2. Save on Credit Card Fees
Aside from annual fees, a lot of other credit card fees can be avoided. For instance, you’ll never have to pay the corresponding fees and charges if you don’t make cash advances and gambling transactions on your credit card. Avoiding bad money habits like late payments and exceeding your credit limit will also reduce your monthly credit card bill.
3. Enroll in Auto Debit
Paying your credit card on time is easier said than done, especially if you’re too busy to remember when your next due date is. You can avoid incurring monthly interest and paying a penalty for late payment by making your credit card payments automatic.
One of the most effective credit card hacks that guarantee on-time payments is enrolling in your provider’s automatic debit arrangement (ADA) facility. This enables the bank to automatically debit the payment for your balance from your savings account. You won’t be missing any payment as long as you keep your bank account sufficiently funded.
4. Find a Credit Card with the Lowest Interest Rate
Of course, as much as possible, you should avoid paying interest. If certain instances make late payments unavoidable, like a sudden job loss or any financial emergency, then one of the best cost-saving credit card hacks is to switch to a card with a lower interest rate.
If your credit card has a high interest rate and you’re currently carrying a balance, you can manage it easier through a balance transfer. This involves moving your balance to a new credit card with a lower interest rate.
With the wide range of cards with low interest rate, it can be difficult to choose the best one for your needs. Make things easier for you by using the Moneymax credit card comparison platform, a free online tool that lets users filter and sort credit cards according to monthly interest rates.
Aside from the interest rate, consider other factors when applying for a credit card. Look at cashback offers, payment terms, annual fees, and reward points system, among others.
5. Get a Second (or Third) Card
Having multiple credit cards may seem more expensive than owning just one card, but getting another card can actually help you save more, as long as you use your cards responsibly and manage your payments properly. With two or three credit cards, you can make the most of the next three credit card hacks on this list.
6. Stay Up-to-Date with Credit Card Promos
Filipinos love to celebrate milestones, from birthdays to monthsaries. And what better way to celebrate than to eat, drink, or shop?
Credit card providers usually have partner establishments (usually malls, shops, online shopping sites, restaurants, hotels, travel booking websites, etc.) that offer discounts, freebies, rebates, and other exclusive privileges to certain credit cardholders.
Taking advantage of credit card promos allows you to reduce your expenses, but use them for good reason. Spending your birthday in a partner restaurant makes sense, while shopping for a new phone at 15% off even if you just bought one a few months ago is a no-no for your budget.
To stay updated on the latest credit card promos, follow the Moneymax blog where you can find the best promos for different credit cards in the Philippines.
7. Redeem Your Credit Card Rewards
Have you accumulated a considerable amount of rewards points already? Don’t let your points expire without using them.
Points earned with your credit card can be exchanged for shopping, dining, or travel gift certificates—which you can use to pay for your future purchases or give as presents to your loved ones.
If you travel frequently, you’ll benefit a lot from using your accumulated rewards points to redeem air miles, which saves you money when booking flights.
Read more: Credit Card Rewards: When Do Points Expire?
8. Use Cash Back to Save on Spending
Cash backs are rebates or refunds you get after you make a purchase. The cashback percentage varies depending on your spending category (e.g., groceries, gas, utilities, and dining).
Using your cashback credit card, you’re actually spending less than if you paid in cash because you’ll get rebates on your purchases. Rebates on various cards depend on the type of purchase and can range from 0.2% to 6%, depending on the credit card program you’re in.
One of the best credit card hacks to maximize your cashbacks is to use your credit card to pay for recurring expenses, such as groceries and utility bills. This way, you’re spending less than you usually do while accumulating rebates.
Also, since different credit cards pay a higher cashback rate for certain categories, use the card with the highest rate for the type of purchase you’re paying for.
For example, Citi Cash Back (1) is ideal to use in the supermarket with its 6% cashback rate on groceries, while Security Bank Complete Cashback Mastercard (2) with 4% cashback on fuel purchases is the better card to use each time you gas up.
When dining out, the best cashback card to use is HSBC Gold Visa Cash Back (3) because of its 5% rebate rate on dining bills.
9. Be Strategic When Making a Big Purchase
Buying a high-ticket item like a gadget, appliance, or furniture will have a huge impact on your credit card payments and budget. So be wise in using your card to pay for such a purchase.
If you’ll make a big purchase, do it at the start of the next cut-off period. This may mean you’ll have to wait until the end of the current billing cycle. This way, the transaction will be charged on the next billing cycle rather than the current one, and you’ll have a longer buffer time to pay for that expensive item.
Although not among the money-saving credit card hacks, taking advantage of your provider’s 0% installment plan will make your monthly payments easier on the budget compared to a straight-charge purchase.
This lets you split your payments for a big-ticket item, like an iPhone 11 worth ~PHP 50,000, in 12 monthly installments or longer. So you’ll only have to pay around PHP 4,000 per month compared to paying the entire amount in one go.
10. Avail of Flexible Payment Terms
Having flexible payment terms allows you to pick specific dates on when you want to pay your credit card balance. Instead of banks setting your due date, you can decide when and how often you’ll pay.
For example, with AUB credit cards, you can pick a specific due date and your frequency of payments. You can pay once a month, twice a month, or even on a weekly basis—whichever setup works for you.
If your credit card provider offers flexible payment terms, it’s best to schedule your payments during payday. This way, you have no excuse not to pay your credit card balance in full. You’ll save money because you’ll avoid paying finance charges and late payment fees.
The credit card hacks above are great for any cardholder who wants to minimize the costs of using their card while maximizing its benefits. Keep these hacks in mind to make your credit card work for you—not against you.