Thanks to digital-first banks like Maya, online credit card application is now easier than ever. With Maya, all you need to get the ball rolling is the Maya app and a history of using Maya services. With premium cards like the Landers Cashback Everywhere Credit Card, there may be additional requirements like an existing Landers membership. Whichever credit card online application you complete, you can get approvals over your app in minutes, no calls or personal appearances required.
In any case, scoring your first Maya credit card is just the first step. Once you have your card, you want to make sure that your card usage leads to better things, not just in terms of gadgets, fine dining, or overseas travel, but also future access to loans that will make a real difference in your quality of life. This is where your credit utilization strategy matters.
Why Your Credit Utilization Habits Matter
To explain why credit utilization is so important, let’s use a hypothetical example. Let’s say you’re a new cardholder with a PHP 55,000 limit. You’ve been diligently using your credit card for everyday expenses, like groceries and bills, and maybe a few well-deserved splurges. On most months, you owe around PHP 50,000, but you always pay in full before your monthly due dates, so you assume your credit score is in perfect shape. Then you check your credit report, say from the Credit Information Corporation (Philippine government-owned credit reporting agency), and find it’s not as high as expected. The most likely reason is that you’re using too much of your available credit.
In simpler terms, credit utilization or credit usage is the ratio between how much credit you’ve used up and how much is available to you. If, as in the example, you have a PHP 55,000 limit and you regularly owe PHP 50,000 on most months, your credit utilization is going to be more than 90%, which is very high, especially for new cardholders.
There are no hard and fast rules about how much this ratio should be, but financial experts generally recommend keeping it below 30%. Why? Keeping your borrowings to just a small portion of your credit limit can show lenders that you’re managing your available credit responsibly. Let’s unpack why being mindful of your credit utilization can go a long way in keeping your finances steady.
1. Credit Utilization Is a Key Factor in Boosting Your Credit Score
Credit utilization is one of the most significant components of your credit score, second only to your payment history. Even if you pay on time every month, using too much of your available limit can tell lenders that you are, perhaps, a bit too reliant on credit to get by. Keeping your utilization low, on the other hand, demonstrates stability, which boosts your overall creditworthiness. You might not feel the need for a higher credit score today, but it will make a difference when it’s time to plan future big-ticket expenses.
2. It Reflects How You Manage Borrowed Money
Your spending habits speak volumes about your financial behavior. When you keep balances low relative to your total limit, it shows that you know how to manage borrowed funds wisely. This responsible track record can open doors to better offers, including higher credit limits on cards like the Landers Cashback Everywhere Credit Card.
This exclusive Maya credit card rewards you with up to 5% cashback at Landers, 2% on dining, and 1% on other qualified transactions,* giving you more value back from your spending and making it easier to keep your credit utilization low.
3. It Affects Your Chances of Getting Approved for Future Credit
That same habit of keeping your balances under control pays off later, when you’re ready to take on bigger financial commitments. If you’re planning to buy land or send your children to the best schools, chances are that you might need a loan to make your ideal options achievable. How you manage your credit card today can influence your ability to get the high-quality financing you need later.
Sticking with a powerful everyday cashback card like the Landers Cashback Everywhere Credit Card makes responsible credit management easy, as every qualified purchase results in cash savings. When you combine these savings with the bulk discounts and low everyday rates at Landers, you effectively pay less to build your future creditworthiness, even as you enjoy some of the good things in life.
4. Lower Credit Utilization Often Means Better Financial Stability
If you regularly use a large portion of your limit, you risk carrying higher revolving balances from month to month, even if you always pay on time. This risks more interest payments over time, putting you deeper into debt. Using a cashback card that rewards your most common everyday purchases can bring down your credit utilization, giving you a wider margin in your credit limit for real emergencies or other unplanned but necessary expenses.
Effortlessly Manage Your Everyday Credit with Maya
More than just a technical metric, your credit utilization is a direct reflection of how well you control your finances. As you explore the possibilities of your credit card, responsible management should always remain your top priority.
The Maya App makes this easier by giving you full visibility and control over your credit card spending limits, payment schedules, and security settings, right on your phone. Whether you’re using the Landers Cashback Everywhere Credit Card or any other Maya product, you have a powerful tool for reining in your spending and building your financial future. When you’re ready to apply, download the newest version of the Maya App to get started.
*Transactions that don’t qualify include: cash in, cash advance, quasi cash purchases, casinos and gambling, fuel, supermarket, pharmaceuticals, utilities, telco, and government.