For the longest time, many Filipinos have associated credit cards as financial tools only for the wealthy. However, times have changed as more people are now starting to recognize credit cards as a powerful tool that can help them better manage their personal finances. In fact, credit cards can even be instrumental in building financial discipline and developing good spending habits, so long as they are used responsibly.
Whether you’re still awaiting approval of your credit card online application or you’re already a cardholder, it’s important to know how you can use credit cards strategically to enhance your financial discipline and maintain control over your spending. Knowing as much ensures that once your online credit card application gets approved, you’ll be able to use your new credit card wisely. Here’s how credit cards can guide you on the path toward becoming more financially disciplined.
1. Credit Cards Let You Set Spending Limits
One of the main hurdles in building good financial habits is lack of discipline when spending. Impulse purchases and spending outside one’s budget can often lead to financial troubles or even debt down the line. If you’re having trouble with impulse spending, having a credit card can help curb those habits by letting you set a personal spending limit.
Maya credit card users, for instance, can set a daily spending limit for their Landers Cashback Everywhere Credit Card via the Maya app. They can also toggle on and off transactions such as online purchases, contactless payments, and cash advances. These self-imposed limits can promote careful budgeting and consideration of every purchase, thus encouraging more responsible spending.
2. Credit Cards Reward You for Strategic Spending
Part of being financially responsible is looking for ways to get more value from your day-to-day purchases. You can accomplish as much with your credit card by using it strategically to obtain rewards and cashback, thus saving you money in the long run.
The Landers Cashback Everywhere Credit Card from Maya, for instance, rewards you with up to 5% at Landers, 2% cashback on dining expenses, and 1% cashback on other qualified spends.* This card is perfect if you’re a Landers member and a frequent shopper at the superstore. When you shop at Landers, you’ll start with a base cashback rate of 3% if your total credit card spending is below PHP 20,000. This rate increases to 4% when you spend a minimum of PHP 20,000, and then it increases further to 5% when you accumulate a total qualified credit card spending of at least PHP 50,000 during the month.
By using a cashback credit card for purchases you already plan to make, you’re able to earn back some of what you’ve spent. In the case of the Landers Cashback Everywhere Credit Card, you can then use these cashback rewards when you do your next grocery run at Landers, which lessens the burden on your monthly budget. This strategic spending lets you save money while also forcing you to be more mindful of your spending to ensure you’re able to earn more rewards.
3. Credit Cards Reinforce the Importance of Paying Bills on Time
Paying bills on time is a good financial habit to practice, one that owning a credit card can certainly help reinforce more. Credit cards have a monthly billing cycle that encourages you to be more proactive in keeping track of important billing schedules such as cut-off dates and due dates. Missing your credit card payments also incur interest charges and thus provide a good lesson on the consequences of not making your payments on time. As you diligently pay your credit card bills monthly, you learn to become more disciplined in controlling your spending so you can set aside the needed funds to pay for your financial responsibilities.
Take note that the billing statement for your Landers Cashback Everywhere Credit Card is made available on your Maya app and is sent to your registered email address monthly. You will also receive notifications from Maya via SMS, email, and app to remind you of your upcoming payment date.
4. Credit Cards Make Tracking Your Spending Easier
Keeping track of your purchases is a must in personal finance so you can be aware if you’re starting to go over budget. Owning a credit card makes this easier as your transactions are recorded in real time. In the case of the Landers Cashback Everywhere Credit Card, it’s very easy to view all of your transaction details on the Maya app. Your credit card billing statements also let you review your expenses in detail, which can then help when you’re evaluating which types of expenses to reduce or to cut off entirely should you find the need to cut back on your spending.
Credit card providers also typically allow you to set spending alerts, meaning that you’ll receive an email or SMS if your card is used to pay for a certain amount. Not only is this feature a useful precaution in case someone makes a fraudulent transaction using your card, the alert also helps you become more aware of each transaction you make, thus increasing your own personal accountability.
5. Credit Cards Teach You to Prioritize Expenses
Using your credit card for things that are already part of your monthly budget such as groceries and dining, trains you to prioritize spending for essentials. Rather than seeing your credit card as a ticket to spending more on non-essentials, you will instead be using it as a tool for planned purchases only. This mindset can help you develop better control over impulse buying while making sure you’re also using your credit card responsibly.
6. Credit Cards Help Build a Strong Credit History
As you use your credit card responsibly, you also steadily build a positive credit history. Doing this opens the door to a wide range of financial opportunities—including loans, mortgages, and access to more credit cards—in the future. These could help you better finance your future endeavors and save you from unnecessary financial stress down the road.
Credit cards are excellent tools in building financial discipline, so long as you’re aware of how to use them wisely and responsibly. By recognizing the role of your credit card as an asset in building good financial habits and embracing the strategies discussed above, you can use your credit card to help you stay on track toward reaching your financial goals.
*Transactions that don’t qualify include: cash in, cash advance, quasi cash purchases, casinos and gambling, fuel, supermarket, pharmaceuticals, utilities, telco, and government.