Days ago I submitted an application to raise my credit card limit with my Bank of Guam Visa Card. Luckily they gave me a 150% increase of my current credit limit citing that I have a very high credit score.
Now in the first place why did I requested an increase of my credit limit?
But first let me warn those who are still working on their credit card debts. If you still have credit card debts I don't recommend you to ask your bank or card issuer to increase your credit limit but rather you should cut your credit card and start paying your credit card debts before your interest gets bigger than the principal.
If you know about Unionbank's Eon Cards Cashsense Visa works basically the same. It is also a product of Unionbank that works like a Visa. So you can use such to make purchases online, receive remittance and withdraw the money to affiliated ATM, or better yet use it to get verified in Paypal and use it in your AdSense as your means of receiving your AdSense earnings.
You can go to Cashsense's website and apply for the card by registering as an associate. This means you have to have a blog to promote their services. Since you are an associate you can ask Cashsense to send your commissions or earnings to your Cashsense Visa as well, now that's convenient.
4. Click the "Get me" image and it will open your mail software with a preformatted email. Place the link for your blog where the banner is shown and attached the required scanned ID(for verification) and send email.
Well as a future entrepreneur and as the trend requires you might be opting to received payment through this facility. Also if you are a blogger like me you can use Cashsense to received your other affiliate earnings, verify your Adsense account, or use it to recieve payments if you are selling online.
One thing you need is to keep with the innovation in business and online selling or what we call e-commerce is here to stay. It is highly probable that in the future all transactions will be done cashlessly or via electronic payment thus the early you start familiarizing yourself the better.
If you are in the Philippines and you are employed by one of the top 1000 companies you might get a pre-approved credit card in the mail. I remember when I was working with Orica Philippines I got 7 pre-approved credit cards. I activated 4 or 5 but in the end close them and maintained my BPI Edge card.
The problem today is that most people who get such credit card in the mail don't really know how to use it. They thought that it is cool to go out and treat your group and show of that you have a "plastic" to charge your spending. Not so good idea.
Also many people only pay what the credit card say: Minimum payment. So they swipe their credit card for a flat screen TV, a new android phone, lunch at Burgoo, and a weekend gateaway in Boracay and their credit card statement only says Minimum payment is Php 980.00. They go to their bank or payment centers pay Php 980.00 and life goes on.
That is the very reason why so many are buried in debt. They don't know how credit card works thus they end up buried in credit card debt. And after being harassed by the credit card company they say credit card are bad and they wont get one anymore.
So how can you and me really make well use of credit card?
Let's break it down to advantage and disadvantage and how to work on some ways how to avoid or turn around from its disadvantage:
Advantages of a credit card
1. Good for business by delaying cash outlay thus keeping your money in the bank and earning interest
If you are in business having the means to delay payments is a good means of leveraging. We call this OPM which stands for "Other People's Money". For example you are in the business of cake delivery, you can buy the Red Ribbon cake using your credit card, delivering it and receiving cash payment. You got cash right away, you are able to deliver, you get to hold your money in the bank, earn at a profit, and do another purchase but not worry of where to get the money to fund your business now. With all the on hand money you got from collections upon delivery you can put it on the bank and earn an interest and pay your credit card after a month.
2. Earning other perks
Most people purchase because of the free perks one gets when reaching an amount of purchases. Most credit card company tie up with airlines giving us mileage points like PAL's Mabuhay Mileage Program. So after charging some purchases you get to have a free flight, that is cool.
3. Establishing a credit record
Having a credit card is the easiest way to established a credit record. I remember when I first came here in Guam that they cannot give me a credit card because I don't have a credit record. Good thing my bank, Bank of Guam, allowed me to open a credit card by placing a security by opening another savings account(they required me a deposit of $1,000.00 equivalent to my credit limit) and handing them my passbook. After a year I requested release of my passbook all is well.
4. Good for emergency
It is a fact sometimes it is unavoidable thus having an easy access to pay will help.
5. Proof of identity
Some credit card act as one's proof of identity. Most offices can check your profile or identity through a check of your credit card record.
6. A good way of keeping spending record
Most people are lazy recording their expenditure but when one's spending is charge using credit card one has an instant record. With online access one can check where have one spent such amount thus able to track one's spending.
7. Worry free from carrying cash
If you are traveling having a credit card is a good idea. It eliminates the burden of carrying cash which might get lost, the worry of converting and exchanging money, and easy tracking for your love one's when you get lost.
Disadvantages of a credit card and how to avoid or turn around from it
1. Getting buried on debt
Most people have no control of their spending thus they end up with huge credit card debt. Even worse is when one becomes so depending to the "plastic" when one pays another credit card minimum payment by taking cash advance form another card.
How to solve this?
It is sad to say that one has to impose self-control. Stop purchasing unnecessary stuff especially when it is a consumer goods like gadget, restaurant dining, signature clothing, and other "wants". It will give you withdrawal symptoms in the beginning but unless you discipline yourself you wont be able to get out of debt.(click here to read more about this)
2. Paying more due to interest
This problem is brought about by paying only the "Minimum Payment" . There is a simple truth which most credit card holder ignore about Minimum Payments. Credit card companies show you the "Minimum Payment" so that you only pay a portion of your debt, incur interest on unpaid debt, and pay various charges due to your late payments. Various charges like late payment charges and the likes is where credit card company earns.
How to avoid paying more?
Pay the whole amount in your credit card statement. When you pay the whole amount you are able to avoid incurring interest and other charges at the same time avoiding having a bad record of non-payment. Cant pay the whole amount? Pay more than the minimum payment. Pay at least 50% of the entire statement amount to lessen the interest that credit card company will charged your debt.
3. Having lots of receipts to keep to be able to track spending
In order for one to control spending one has to keep receipts and be able to arrange and organize them but this sometimes become a hassle. Most have an online statement to solve this but you can also use other online programs which can help you track your expenses.
One is Mint.com
It is a free online service that simplifies your expense tracking and other finance stuff to take care of. You can visit their site at www.mint.com to learn more
4. Developing a spending addiction
With such power on hand you might not be able to tell your self when to buy and when not to buy. With the marketing machinery of credit card companies you cant just say no to a free movie ticket on the first screening of an upcoming movie only if you buy the latest clothing line of Levi's . Or maybe there is a raffle and the only way to enter it is to make a 1000.00 peso purchase to get one raffle ticket and so to join in you have to a lot of thousand bucks to get more tickets.
How to tame the green monster in you?
Set priorities. You have to list needs that you really need and only charge such needs to your card. Also always be ware that your credit card has a credit limit. Always spend only 50% of your credit limit never ever max it out or else you will fall to disadvantage number one.
As I remember Bob Procter saying "Make money the work for you not you working for money" we must make the best of credit cards. It is good for business as long as you are able to make timely payments and it could be a friend when you need it most so don't max it out and make sure you have enough funds to pay it when the due date comes not you have expected money to come to pay it on due date.
