Credit Card Tips

Frenemies—we all have one. Can't live with 'em, can't live without 'em. Sounds familiar? Most of us can't help but feel the same when we compare credit cards – the features are abundant but are they always good for your needs? They're amazing lifesavers and they can be handy in times of emergency, but they can also bury you deep in debt and make you want to disappear.

FRIEND: Use a credit card on major big-money purchases, and always on 0% instalment basis

If you're planning to buy a new phone, television or laptop, using your credit card to make the purchase and placing it on instalment is better than shelling out a huge sum of money all in one go.

Paying in cash will not only break the bank, but it will also make you feel emotionally drained. Paying on an instalment basis makes you feel like the purchase is more of an investment rather than an indulgence. Paying on an instalment basis at 0% interest rate, should be your only choice if you don't want to end up with interest rates.

So if the HD TV is worth ₱45,000 at 0% interest rate for 12 months, then it means you need to pay the bank ₱3,750 every month, for 12 consecutive months. If you only paid the minimum (as indicated in your billing statement), then the bank will ask you to pay more through interest rates. You don't want to deal with interest rates, trust us. And the only way to avoid that is by not carrying a balance.

FOE: Pay only the minimum amount indicated in your credit card billing statement

Most credit cards only require you to pay around 4% to 6% of the total credit in your billing statement. But the rest of the amount you don't pay from the total monthly bill will accrue a certain percentage of interest.

This means that whenever you're only paying for the minimum amount within a certain period of time, you actually pay more than if you just settle the bill immediately. If you can't pay the full amount, it's recommended to pay the largest amount you can afford so that the interest will be smaller for the rest of the amount you are forgoing to pay. Also, if you continue charging items on your MasterCard even when you still have an amount left to pay, your bill will balloon even further. So if you can't afford to pay up, just take a step back and avoid using your credit card until you've paid the entire amount due.

If you aren't able to pay the minimum amount for three consecutive months, the banks start calling you.

FRIEND: Use credit cards for online shopping

Whenever you feel bummed about anything, just think that we live in a beautiful world in which the Internet exists. It is where you can buy anything, book your flights and hotel accommodations as well as have anything delivered to you with just a few mouse clicks. But if you don't have a credit card, this is a whole entire world you're missing out on. I mean, who has the time to visit the bank and make payment deposits anymore?

Some websites, like, don't even allow any other payment method except with a MasterCard or Visa card. So cardholders, rejoice, with the ease of buying online. But don't get too carried away! Let's be clear: the perk here is the convenience, and not the swipe-all-you-can opportunity.

Some banks offer Visa card variants, which are exclusively for online purchases or bookings.

FOE: Getting suckered into cardholder-exclusive discounts and shopping sprees

We've seen all the gimmicks. And it's so hard to ignore them sometimes, especially the caveats lurking beside those asterisks, hidden in fine print: not valid for sale items, for purchases above ₱5,000 only, for specific (read: high-end) brands only. Is it still worth it? Usually, it's not.

How many times have we found ourselves looking for that one more dress to make our total bill reach ₱5,000 so that we can get free shipping? Or ignored those pretty shoes on sale but not included in the special discount? Or chose a high-end, branded bag just to participate in the exclusive sale, even though a perfectly stylish one lurks in the low-end range? Not all sales are the same, but often, these credit card risks are designed to make you spend more, so learn to discern.

Remember: A credit card is a tool, not an extension of your purchasing power. Oh, and never, ever max it out! Your bank won't like it: they won't give you perks such as regular credit limit increases, and it'll be hard for them to trust you with bigger loans when you apply for one.

Not sure which card to choose? Choose wisely by looking at your spending habits first. Compare credit cards with GoBear today!