Thursday 9 January 2014

MONEY MATTERS : HAVE YOU TRIED CUTTING YOUR CREDIT CARD IN PIECES?


Credit card is a great money saving tool if you have lots of will power with you. Case in point: You can gather points and use such to buy your groceries and kikay stuff. Like fire, it can bring you warmth and comfort when used under your control. Otherwise, it can burn your whole house when blown out of proportion.

It was 5 years ago when BDO sent me my first pre-approved credit card, and I am a happy client. Until now I use them. That's my one and only credit card. I noticed that they've raised my credit limit to close to a hundred thousand. However, I have this self-imposed rule that my bill should not go beyond one-third of my credit limit.


 Months ago, they sent me another one. A pre-approved card specifically for online purchases. And I did something weird on them. I cut them in pieces. Why? Let us count the ways:
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  • Having another credit card prompts you to use them (at least once).
  • Virtual card (or online credit card) has only one purpose, and that is, for you to spend.
  • Spending online, can be quite addictive. Say, before, you occasionally browse coupon sites, but now - you regularly does so - and buy a handful at a click of a mouse.
  • One doesnt 'feel' money leaving his wallet with credit card purchases. Since it's automated, it's as if the cash outflow has no effect on you.
  • Online purchases are hard to track. When you buy in cash, there's a sense of mental accounting of money leaving your wallet - this is usually not the case in virtual cards.

CONTROL YOUR CREDIT CARD BEFORE IT CONTROLS YOU
Sure, retail therapy works. Sure, that dress looks awesome on you. However, MODERATION is key. I've seen people being ruined financially and their wanton spending habit is the culprit. Master the art of balance, specially on money matters.

CREDIT CARDS: FRIEND OR FOE?
Credit card is a neutral thing. It can either be your friend (with perks and points) or foe (you being charged with sky-high interest rates is NOT fun at all). It's up to you. Use credit cards at your advantage. Pay 100% of your balance the next month and you won't have any problem. Bottom line: If you can't afford it in cash - you can't afford it. Stat!
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NEW YEAR. NEW YOU.
Financial freedom is a great goal to achieve this 2014. Try to find ways to become financially independent. Look for ways so your saved money will work for you. Passive income (like mutual fund, UITF, equity stock market) is one of them. Money can't buy happiness, that's true. But it's inevitable to conclude that money is power (to some extent). May we have a good better spending habit this coming year! -CMK
 

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2 comments

  1. This is a weird and crazy yet a very meaningful saving idea. It is true that money can't buy happiness. Most of the time, the happiest moment in our life is FREE. :)

    ReplyDelete
  2. You just cut the card that's supposed to protect your online purchases. It's not another CC with a separate limit. It's linked to your principal card and its has a lower limit to protect you from hackers. Without it, you are exposing your primary card's limit online.

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