What is the first thing that crosses your mind when someone told you about Credit Card? I’m not sure about you but I hear a lot of painful experiences
“I’m in deep debt because of it”
“I’m so stress up on figuring out how to repay my debts”
“I need to sell my car just to pay my debts!!!”
“I can’t control my expenses when using it”
“I already “cut” all credit cards”
Now if you notice, majority people can’t resist the temptation of having extra credit spending when they have credit cards. Sadly, this often leads them to become a “slave” to credit card whereby they need to work very hard each month just to payback their debts.
When we talk about debts, not necessarily all debts are bad. There are good and bad debts. For e.g. an Education Loan is a good debt, as you are spending money that cant afford presently for a better future. In contrast, if you abuse credit card, you’re actually spending your future money that you can’t afford presently. Now that’s really a bad debt!
So much of the dark side, let’s move on how we can turn the situation around and make credit card as your “slave” :D. I believe not many of us are taught on how to use credit card the right way. If fact if you used it properly, it’s a very powerful wealth tool.
Before I moved forward, there are few things that you must take note when you plan to max out the benefits from the “slave”. There are as follows:
You should not have more than 2 credit cards
Why 2 credit cards only not more than that? The idea here is for you to focus on one single card and an additional as a backup for the case of emergency. You know emergency do happen and you don’t got stuck in a situation when your main card has insufficient credit.
Look for “Free for Life" or "Annual Fees waived" cards
Why need to pay when you can get it for free? If you really can’t find any “Free for Life” cards, just make sure you set a least 2 months reminder in your mobile phone before the credit card expired (Annual fees will be imposed for renewal) so that you can cancel it and re-apply again.
The credit cards company offer online facilities and you can access your accounts anytime, anywhere.
This is to ensure that you have easy access to your account so that you can have a rough estimation of your expenditure.
Now, here is the most crucial part. You need to study your monthly expenses. Look for re-occurring expenses or bills that you can pay by auto deduction from you credit cards. Here are some e.g.
Utilities bills
Cable TV bills
Phone bills
Internet Broadband bills
Insurance
Petrol
The purpose of doing this is to make sure that your monthly fixed expenditure is handled automatically by your “slave”. This also ensures that you didn’t overspend your future money!
Now the beauty part of this after doing all the ground work, each month you will receive your credit card statement that will track down and consolidates all your fixed expenses. You no longer need to hire an accountant to work out those tedious accounting figures which really drive us mad sometime. It’s all done F.O.C for you by your “slave”.
Adding on, most credit card companies offer royalty programs that encourage you to spend. Each dollar you spent you will entitle royalty points and you can redeem for freebies. Now I’m gonna reveal you a secret about these royalty program ;). Most of these programs are design for individual and these individual must be an all time big spender to eligible to redeem those freebies. To counter this, the fixed expenditure of the GF and I are combined in a single “slave”. So by doing this it will definitely boost up the expenses and reduce the time required to redeem the freebies: D. One of the GF’s favorite freebies is to redeem hypermarket’s voucher. She can use those voucher to buy groceries. Isn’t that fantastic!!! :D
Other than that, if you know the trick, you can actually have free interest loan! Often credit card companies will have a cut off date for each individual account. For e.g. your credit card statement will have a cut of date of 15th on each month and any transaction incurred after the 15th will only be transacted the next month. After that you are given 2 weeks to clear the outstanding amount. So if you have any unplanned expenses do it after the cut off date ;). This allows you to have at least 1.5 months interest free loan to prepare the necessary cash for the expenses.
So we got a F.O.C "slave" working for you, freebies, free interest loan and most importantly it saves time! I still remembered when the month ends and its time to pay your bills, so much time was wasted to queue at the counters and sometime even worse..."System is down!” I hate that! Now with all your bills automated you just need to focus on the “slave”. The best part is, now days I can pay my credit card bill online and I just took me less than 5min!
CAUTION: Do ensure that the very first thing that you receive your monthly income is to clear your debts. Don’t procrastinate and always pay the full amount that you owned. The problem will people are when they have excessive cash on hand, they will tend to spent it.
Lastly, isn’t this “slave” wonderful if you know how it works! I hope you can max out the advantages offered by the “slave”.
Cheers!!!
