Used responsibly, credit cards can be a valuable tool for managing your finances. They offer convenience and flexibility, especially for managing important monthly expenses or making essential large purchases through installment plans. Many cardholders also enjoy perks like cashback rewards, travel discounts, and exclusive promos. On top of that, applying for a credit card has become much more accessible, with many digital banks offering easy credit card application in the Philippines.
However, enjoying the full benefits of a credit card also means using it responsibly. While it's easy to swipe for convenience, spending without thinking ahead can quickly lead to overspending and unmanageable debt. That’s why one of the most practical ways to stay in control of your credit card usage is to assess whether you can genuinely afford a purchase before charging it to your card.
In this article, we’ll explore the key indications that can help you determine whether you can afford something so you can use your credit card more confidently.
It Comes with Tangible Benefits That Work in Your Favor
Some credit card purchases can work to your advantage if they come with practical benefits. For example, using your credit card to buy everyday essentials like groceries can be a smart move if your card offers cashback rewards or points for those categories. These perks are usually outlined during the credit card application process, so it’s important to pay attention to which categories your card rewards.
The Landers Cashback Everywhere Credit Card, for instance, gives you up to 5% cashback at Landers, 2% on dining spends, and 1% on all other qualified transactions.* Each point is equivalent to PHP 1, and the points you accumulate can be used as a discount on your next purchase at Landers.
If you’re using your credit card for purchases you were already planning to make and those expenses qualify for cashback or other benefits, then that spending can be considered purposeful and budget-friendly, especially if you pay the balance in full each month.
It Fits Within Your Regular Spending Budget
Another clear sign that you can afford something is if it comfortably fits within your regular monthly budget. This means you’ve already set aside money for essential expenses like bills, groceries, and savings, and you still have room for this other purchase without having to cut back on your needs or dip into your emergency fund, savings, or investments.
Before charging anything to your credit card, ask yourself whether this spending will disrupt your established financial routine. If paying it off later means you’ll struggle to cover other obligations or need to delay more important payments, then it might not be a wise decision. A good rule of thumb is to treat your credit card like cash that you’ll need to pay off a few weeks later. This means if you wouldn’t be able to afford the item without the card, it may not be worth buying.
It’s a Necessity, Not Just a Want
When using a credit card, it’s crucial to distinguish between needs and wants. Needs are essential to your daily life, such as groceries, medicine, transportation, electricity, water, and internet services. Wants, on the other hand, are non-essential items you can often live without, like the latest phone model, luxury skincare, or that cute kitchen gadget you saw online.
In the Philippines, online sales like 11.11 or payday promos can make it very tempting to buy things impulsively, especially with discounts and free shipping luring you in. Before you swipe or click “order”, ask yourself whether the item or service is urgent and essential. If it’s not something you need to survive, complete your work, or maintain your health or home, it might be worth reconsidering.
It’s Genuinely Useful to You, Even If It’s Not Entirely Necessary
Affordability is also about value. Even if something isn’t strictly necessary, it may still be worth the investment if it contributes meaningfully to your life. For example, purchasing a high-quality office chair that supports your posture , a new vacuum cleaner that saves you hours of cleaning, or a mental health app that helps you manage stress can be justified because they enhance your productivity, efficiency, or well-being.
On the other hand, buying yet another trendy outfit or a novelty item that will be forgotten in a week doesn’t provide the same kind of return. When assessing whether you can afford something, consider if it aligns with your goals, lifestyle, and priorities. Will this make your life easier, better, or more enjoyable in a lasting way? If the answer is yes, and it fits your budget, it’s likely a smart purchase.
It’s the Best Option for Your Needs
Just because you can afford an item doesn’t mean it’s the best use of your money. Before making a purchase, it’s worth comparing prices, looking at reviews, and evaluating whether a more affordable alternative might do the job just as well. This is especially true for big-ticket items like appliances, gadgets, or furniture. Timing can also be a factor. Is there a better deal coming up, or can you wait for the next major sale?
You should also check if your credit card provider offers exclusive discounts or 0% installment deals for the item you want. If you’re making a smart, well-researched choice that fits your needs and financial situation, it’s a much stronger indicator that you can truly afford it.
Credit card ownership requires discipline and intentionality. Instead of viewing your card as an extension of your income, treat it as a tool that complements your financial goals. Make sure to take a moment to assess whether a purchase makes sense for your current situation to help you stay in control and avoid unnecessary debt. With the right mindset, you can enjoy the benefits of credit while keeping your finances healthy and manageable.
*Transactions that don’t qualify include: cash in, cash advance, quasi cash purchases, casinos and gambling, fuel, supermarket, pharmaceuticals, utilities, telco, and government.
