Pros and Cons of a Credit Card

I've been hearing from friends and colleagues how they don't have a credit card until now because they are afraid of having one. The idea of maintaining a credit card is really scary, especially for younger generations. I noticed among my gen Z friends how they prefer to pay cash than credit, without knowing the perks and advantages of using the latter.

I got mine out of necessity at work which I primarily used during unexpected situations or purchases where I don't have enough cash. It made my life easier. I paid urgent office expenses using my card, then processed the reimbursement before it is due. It helped me pay the important transactions without having to shell out money from my own pocket!

My credit card also allowed me to purchase big ticket items for myself. Instead of paying my phone in cash (which used to cost the same amount as my monthly salary), I can use my card to pay it in affordable monthly installments with reasonable interest rates. I also helped my parents buy an expensive appliance and instead of waiting to pool the money to buy for it, they were able to purchase it using a credit card and install the payment for up to two years.

Another perk for me was the points I earned. It was slow at first, considering my credit line was small. But as years went by, with bigger transactions for work, business, and even personal items, my credit line increased along with my usage and points. I have redeemed some of it through vendors and e-wallets every 2-3 years.

Of course, having a credit card is no easy walk in the park. Its privileges come with responsibilities. You should learn to track your expenses and NEVER SPEND more than you earn. Before purchasing pricey items through installment, check first how much that'll affect your monthly cashflow. Some items can be paid through installment interest free for up to six months. But if that amount is still too heavy, you can request a longer period with an interest to fit into your monthly budget.

You should always remember to set aside money for what needs to be paid on the next billing statement. It took me a while but eventually, I got the hang of it. Before long, I knew at the back of my mind how much I can still spend, and how much I should set aside for next month's bill.

Always remember, having a credit card does not equate to having cash. You are simply maximizing your cashflow!