Basic credit card principles to live by

Your credit card can do more than just cover purchases. With the right strategy, it can earn you rewards, stack up savings, and work harder for you with every swipe.

Credit cards can be powerful financial tools. When used properly, they don't just give you a line of credit, they can actively help you save.

Most credit cards come with reward points that incentivize each purchase or payment you make. Rewards can come in the form of cashback, travel miles, or points redeemable for products, vouchers, and more. Knowing how to redeem credit card points means you're squeezing real value out of every swipe.

For those going through their credit card application in the Philippines for the first time, these tips are a great head start on building smart spending habits.

Optimize your credit card strategy

It’s pretty simple to figure out which credit card to use and when to pay for it when you only have one. However, if you have more than one credit card to your name, you may need to plan how to use them. Understanding the different types of credit cards available can help you decide which ones to add to your wallet and how to use each one strategically. Part of optimizing your strategy is knowing how to use your credit card points, whether that's for travel, shopping, or converting them to cash credits.

For instance, you may designate a credit card for your groceries and home expenses because it offers you discounts on retail establishments. You may assign another card exclusively for your car needs because it gives you discounts at your car dealership.

Pair store discounts with card promos

Check and see which retailers offer promos for specific credit cards. You can stack discounts—like a store’s 30% off promotion—with extra rewards from your credit card issuers. 

Some credit card issuers also offer promos of their own as well as bulk discount buying options. Make the most of these when shopping!

Deposit the extra money into your savings

It may be tempting to use the extra money to buy something else or to splurge on something you’ve always wanted. Resist the urge and instead, put the money into a high-yield savings account.

Make a habit of doing so every time you get cash back or save any money with your credit card. This way, you get a regular stream of money to fund your financial goals, whether that’s building an emergency fund or your child’s education fund.

Pay for your credit card bill on time

Failure to pay for your credit card bill on time incurs penalties for late payments and interest charges. Make sure you’re paying for your credit card bills in full each time so you can avoid these fees.

A credit card can be extremely useful when purchasing necessities and can even give you savings. All you need to do is know how to use it properly so you reap all the benefits.