Money BasicsBorrowing & Credit

Why you should get a credit card

Credit Card: The Keyword is Convenience

Why is a credit card important? Your credit card is a valuable tool, letting you strike the perfect balance between convenience and instant gratification.

Your credit card offers benefits such as:

  • Enrollment of Bills
  • Security
  • Travel Perks
  • Rewards from Points
  • Universal acceptance

A credit card is an important tool to have in your wallet or purse as it serves as an extension of your spending capacities. It can be used for everyday purchases such as groceries, gas, water, coffee, and other daily necessities but it can also be used for big ticket items like gadgets, vacations, your child’s tuition, and jewelry. But a credit card is not just an extension of your spending power. Unlike cash or a debit card, if stolen or hacked, it can easily be replaced. Keep on reading to learn more about the advantages of having a credit card in the Philippines.

Why should I get a credit card?

Credit cards are the most secure way to pay. Your credit card is not linked to your bank account, providing an extra layer of security. If you were to lose your wallet, you will not have to worry about the thief draining your bank account like they could with your debit card. You just need to contact your bank or card issuer to freeze transactions and get a replacement card. Having a credit card instead of wads of cash also prevents you from losing a few thousand pesos in case your wallet gets stolen.

If you spot an unauthorized charge on your account, you can report it immediately to your bank or card issuer to dispute it and prevent further charges. Even if a thief has your card or information, any charges will be declined as long as you report it soon enough.

Most credit card issuers also have fraud alerts set up so that users receive SMS alerts whenever there is any kind of activity done on their credit card. In the event of fraudulent activity, you can easily stop the transaction from happening by replying to the SMS and freezing your credit card.

What are the advantages of a credit card?

The keyword is ‘convenience.’ Apart from being a secure way to pay and offering more buying power, there are many advantages to having a credit card. Here are just some of them.

One-time bonuses

Everybody likes a gift. Most credit card issuers offer a one-time bonus or gift from the credit card issuer’s digital catalog in exchange for spending the minimum amount within the first month of signing up.

Sometimes in lieu of a gift, credit card issuers offer cash or points that can be redeemed for travel, gift cards, or merchandise from their digital catalog.

Universal acceptance

One of the biggest reasons why a credit card is important is they are universally accepted. Unlike debit cards, credit cards are accepted by most vendors, online sellers, and establishments – whether that’s in physical shops, online stores, hotels, or restaurants. And in some cities that have gone completely cashless, the credit card is really the only way to go.

Consolidated Bill Payments

Major credit card issuers have auto-charge programs or payment facilities wherein you can enroll your monthly utility bills and settle them automatically through your credit card. This lets you manage all your bills without having to go to various payment centers, giving you more time for other important things in your life.

When you set certain bills on autopay, you avoid missing due dates and pay them all in one go. It is even better if you're using a rewards credit card to pay those monthly bills, as you earn a lot more cashback, points, and airline miles. As long as you pay your balance in full every month and practice good credit card payment habits, the extra rewards you earn from regular bills can boost your finances.

Earn rewards

Most credit cards offer rewards or cashback, or points as an incentive for every use of your credit card. There are many different types of credit cards to choose from as mentioned earlier – from travel cards, cashback cards, and so on. Credit cards are tailored to suit the different lifestyles and spending habits, so do your research and find one that suits your preferences best.

All you have to do is use your credit card as you normally would, and the credit card issuer will give you a number of points or cashback depending on how much you’ve spent.

Financial Flexibility When Traveling

Credit cards and traveling go hand in hand, especially if you are a frequent flyer. You can use your card to book flights, shuttle services, accommodation reservations, and activities abroad, sometimes months in advance. It is a level of assurance that allows you to plan your trips to the fullest.

Rather than paying in cash, you can save a great deal of money if you use a credit card with low foreign transaction fees. This provides you with better exchange rates than foreign exchange centers, ATMs, or money exchange kiosks at the airport. A travel credit card also gives you greater financial freedom, especially if you have higher credit limits. You'll be able to deal with any unexpected expenses that come up during your trip.

Plus, travel cards such as Metrobank's Travel Platinum Visa feature many credit card benefits for jet setters and business flyers. These include airport lounge access, free travel accident insurance coverage, secure paperless payments anywhere in the world, and many more. With travel cards, you get to earn miles with every purchase you make which can then be redeemed and used just like money when booking flights.

Focus on the Convenience of Credit Cards, not overspending

A big part of owning a credit card is learning how to use it wisely.

It’s easy to think that a credit card is extra income but it isn’t. It’s better to think of a credit card balance as a loan that you need to pay off in full at the end of the month.

The best way to know that you are a responsible credit card user is if having a credit card does not change your spending habits. If you find that you max out your credit limits each month, you may not be ready to have one just yet.

It is easy to convince yourself, even without knowing it, that you are not spending your money when you use your credit card. Technically, that is correct, as you are borrowing money. For instance, if you purchase a laptop in monthly installments, you know you will be charged at the end of each monthly cycle, but the promise of small minimum payments can make even big purchases seem like bargains. At the end of the day, a credit card is like a loan that needs to be paid back.

You will not be burdened when you practice proper credit card management despite the risk of overspending with several enticing promos or offers. Responsible credit card spending is always a good thing, especially with the rewards that credit cards give you for every peso you spend – whether it's cashback that lowers your monthly bill or vouchers at your favorite online stores.

If you fail to pay back your credit card bills on time, these accumulate and incur late fees. The longer you put off paying your credit card bills, the more these late fees compound and pile up, putting you further into debt.

Best practices when it comes to credit card management includes paying your bills on time and in full every single month. Keeping your balance at PHP 0.00 at the end of each month will help your finances tremendously. Other ways to manage your card wisely include reviewing your monthly billing to stay on budget, monitoring your purchasing habits so you can adjust accordingly, and only charging what you can afford. Never charge more than what you currently have in cash.

Credit cards are powerful. But as the proverbial advice found in the Spider-Man comics goes,“With great power comes great responsibility.”

When used responsibly, your credit cards offer you more security and convenience than any other mode of payment, along with valuable rewards and useful benefits.

There are multiple types of credit cards, each with their unique benefits. Do your research and find one that caters to your personal needs and lifestyle. For additional information on how credit cards can work for you instead of against you, learn more credit card management tips. To find the credit card that best suits your lifestyle, Metrobank has an extensive selection of credit cards with plenty of perks and privileges for discerning card owners.