Many Filipinos today want to go cashless. A 2019 survey published in The Manila Times revealed that 75 percent of respondents are looking to pay with cards rather than cash. Cashless payments cover the use of credit cards to pay for goods and services.

If you’re thinking of going cashless and using credit cards to pay for your needs and wants, you’ll need to be responsible when using this financial tool. Irresponsible use could result in financial problems, such as poor credit standing and mounting credit card debt.

First-time cardholders should take note of these suggestions when using their credit cards:

Review Your Credit Card Statements Thoroughly

Once your billing statement arrives in the mail (or your email, if you chose to receive your reports electronically), keep a close eye on each credit card transaction. Make sure that the statement:

  • Has no unauthorized charges or errors
  • Contains the correct amounts, dates, and descriptions for all purchases
  • Has applied your payment in the statement

If you come across any suspicious transactions on your billing statement, get in touch with your issuing bank as soon as possible.

Check Your Credit Score and Report

If you’ll be using your credit card regularly, remember to check your credit score and report with a credit-scoring company. Reviewing these two pieces of information will help you understand your current credit position. If you know where you stand, take steps to improve your credit standing. This way, you’ll be able to qualify for better credit card offers or deals.

Read the Credit Card Terms and Conditions

Before you use your card to make your first purchase, allot time to read the fine print documenting how you should use your credit card. Pay close attention to the following specific details:

  • Interest rates
  • Credit card fees, including annual, late, and overlimit fees
  • Rules on qualifying for credit card rewards and deals
  • Computation of finance charges

Avoid Credit Card Overspending

The saying “Live within your means” applies to credit card usage. When using your card, never spend more than what you can afford.

Take note of these practical suggestions to prevent overspending:

  • Spend below your assigned credit limit. If you go beyond your limit, you’ll have to pay overlimit charges, which add up to your outstanding balance.
  • If you’re going to buy something using your credit card, ask yourself: “Can I pay this amount with cash?” If the answer points to a “no,” walk away and abandon the transaction.
  • Establish a budget on your credit card spending.
  • Use your credit card for everyday purchases, such as fuel, food, and groceries.

Monitor Your Account Regularly

Look at your card activity at least once a week. Report any unauthorized transactions to your issuing bank. You can easily monitor your transactions by reviewing your expenses through your bank’s online or mobile app.

Avoid Withdrawing Cash from Your Credit Card

Cash advances are expensive. You’ll have to pay a cash advance fee whenever you withdraw cash using a credit card. On top of that, interest charges might be higher than regular purchases. If you need to pay for goods and services with cash, withdraw money from your savings account instead.

These suggestions will help you use a credit card wisely. By becoming a smart cardholder, you avoid the stress and costs of credit card debt.

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