News : Cheap Credit Cards

Date : Thursday, July 03, 2008

WHEN the going get tough the tough go shopping-and usually armed with a wad of plastic cards. It goes without saying that owning one or more credit cards offer a multitude of benefits, whether it's simply a matter of convenience or as substantial as establishing creditworthiness. (Though having to click your heels and hang about at a supermarket checkout while the shopper in front uses a credit card transaction to pay a grocery bill of P100 can be irritating to say the least!)

But as entrepreneur and reputed financial analyst and advisor Francisco Colayco points out, not many people are aware of how to make the most out of their credit cards, and many actually find the dues piling up sooner than they had imagined.

"Most income earners end up being in debt the moment credit is made available to them. To give you an example, survey after survey shows that as many as 80 percent of most employees in all forms of organizations are neck deep in debt from loans made available by third parties payable through salary deduction," explains Colayco.

He goes on, "Others get tempted to use credit cards to purchase things they really do not need mainly because they happen to have the credit card with them as they simply walk around the malls. Basically, the phenomenon is the result of a mindset that is narrowly focused on living a lifestyle whether or not it is within one's means."

According to Colayco, a common misconception is that a credit line is a ready source to be used for any personal purpose, and that people tend to look at any unused credit as their "own money." To avoid this irresponsible use of credit cards, he says, one must simply accept the actuality that credit is other people's money: it carries high interest cost and must be repaid.

Once a cardholder is aware of these realities, it becomes easier to use credit to his or her advantage. Popular examples are ongoing tie-ups of credit card issuers with established service providers like airlines and retail outlets such as supermarkets and malls. These are generally good promotions that you can use to your advantage such as enjoying rebates or rewards.

But that's just an added bonus, Colayco points out. If a cardholder gets into the good habit of paying on time, he or she establishes what is called good credit-which can lead to many monetary benefits in the future.

Nowadays, all financial institutions, particularly banks conduct credit and background checks on borrowers. Personal credit card records form part of the database available for credit checks. It is crucial to maintain a positive record of your credit card profiles. This way, your credit rating when you apply for other types of credit (e.g. housing, car loans, etc) will be positively high.

Another helpful tip is to be on the look-out for promos that can help you maintain your good credit standing, just like 0 percent balance transfers or lower-interest cards that reduce your minimum monthly payments!

One such promo is Metro-bank Card Corporation's 0 percent Acqui BT, an acquisition program tied up with the Balance Transfer offer at 0 percent interest for 6 months, wherein the applicant can get a Metrobank credit card and at the same time avail of Balance Transfer.

Colayco concludes: "Remember, your credit card can be your best ally or your worst enemy. If you use your card irresponsibly, you can lose opportunities for upgrading your financial life. But if you utilize it conscientiously and pay on time, you will see your financial resources grow."