Once restricted to a handful of elite consumers, credit cards are now being adopted by Filipinos at increasing rates. There are several reasons for this shift, ranging from easing inflation rates to heating competition among card providers. But one of the less-discussed reasons is the changing views of Filipinos on credit. Where credit used to be viewed in a negative light, the attitude towards credit has become significantly more nuanced in recent years.
Indeed, upwardly mobile Filipinos are increasing their credit card usage, not just to travel more easily or finance the finer things in life, but to get more out of their expenses. In other words, Filipinos are waking up to the fact that the right cards (and habits) can be a means to grow rather than spend their wealth.
With Maya credit cards, you get access to practical features that effortlessly work with your financial habits. The Maya credit card annual fee structures are also reasonable, with waived annual fees on both the Landers Cashback Everywhere Credit Card and the Maya Black Credit Card.
But while Maya makes credit cards more rewarding, many Filipinos still hold back out of concern for fees and interest charges. The good news is that you don’t need to be a financial wizard to avoid getting trapped in drawn-out debt payments. Here are some proven psychological tricks to help you avoid those fees and interest charges.
1. Stop Thinking of Credit as “Free Money”
There’s a world of difference between knowing what credit is and understanding what it means for your finances. First-time cardholders sometimes make the mistake of putting everything on their card without being completely sure they can make up for the payments. As a rule, you’ll want to start your credit card journey by only using it to pay for things you can completely pay off within your billing cycle. This will help you avoid any finance fees and, if your card offers it, earn cashback and other rewards.
2. Treat Your Credit Limit as Your Emergency Buffer
Credit cards can be incredibly convenient, and it’s tempting to treat them like cash on hand. If this sounds familiar, you may want to think of your credit card as a reserve rather than an extension of your salary. As you become more comfortable, you can begin using your card on calculated, everyday purchases to earn rewards.
3. Get Rid of the “Minimum Payment” Mentality
In most cases, paying just the minimum is a bad idea. It’s a lot better than not paying at all, but it still extends your debt cycle and causes interest to rack up. As a rule of thumb, you want to settle all your card purchases as soon as possible, even before the billing cut-off. This keeps you from paying interest charges, and if you use a cashback card like the Landers Cashback Everywhere Credit Card, it should allow you to get all your perks with no deductions.
4. Know What Else You’re Missing When You Pay Interest
Speaking of cashback credit cards, interest payments usually cost more than the value of your rewards. In other words, when you end up paying interest, you’re losing more than you might realize.
For example, with the Landers Cashback Everywhere Credit Card, you can enjoy up to 5% cashback on Landers purchases, 2% on dining, and 1% everywhere else.* This effectively saves you cash on all qualified purchases, but only if you pay on time. If you end up paying interest, you might be losing a lot more than just those fees.
Master the ins and outs of your card mechanics by looking them up whenever you have time. Soon, you’ll get a sense of what’s really at stake when you don’t pay off your entire credit card bill on time.
5. Set a “Mental Credit Limit “That’s Lower Than Your Actual Limit
Don’t take your credit limit as an invitation to spend the whole amount. Rather, set a mental limit that’s 30% or lower than the actual limit. For example, if you have a real limit of PHP100,000, get into the habit of hiding or freezing your card when it approaches PHP30,000 in spending. This should not only keep you from spending money you don’t have, but keeping your credit card spending down to just a fraction of your real limit can help with your credit score. Keep at it and, soon, you can enjoy an even higher credit limit as well as a wider range of credit options.
6. Gamify Your Spending
Using your Maya credit card gives you cashback or points that translate into real benefits. Depending on the card you have and the goals you’re aiming for, you can try setting goals around your spending habits.
For example, if you have a Landers Cashback Everywhere Credit Card, you can only unlock the full 5% cashback at Landers if you spend PHP 50,000 on qualified purchases within a month. In this case, you may want to time big-ticket purchases in the same period as a sale in your favorite store so you can fully maximize your spending. Mastering your credit card’s mechanics should make it easier for you to turn daily expenses into fun opportunities to save.
7. Set Payment Reminders about Your Salary and Due Dates
Make sure to set your phone's calendar to give you reminders a few days before your salary date or whenever you expect money to come in, and also a few days before your credit card payments are due. This simple hack guarantees you’re able to set aside money and are never in a rush to pay off your credit card.
Spend More Confidently and Wisely with Maya Credit Cards
Credit cards can be a lot simpler to manage than people realize. The main thing to remember is that you won’t have to pay interest so long as you pay off everything within the billing cycle. With a few smart shifts in your mentality, you’ll safely handle any credit card you qualify for.
At the end of the day, though, you want a credit card that actually works to build your wealth or gives you easier access to the better things in life. Apply now for the Landers Cashback Everywhere Credit Card or the Maya Black Credit Card from Maya Bank to start enjoying more with every tap. Download the latest version of the Maya app to begin your application.
*Transactions that don’t qualify include: cash in, cash advance, quasi cash purchases, casinos and gambling, fuel, supermarket, pharmaceuticals, utilities, telco, and government.
