From Traps to Tips: Avoid Credit Card Traps Through Power Tips

Credit Card Traps Through Power Tips

"Don't get a credit card, it's a trap." You will hear this line from a lot of people. Why? The "shop now, pay later" scheme seems to be too irresistible, right? Before you know it, you'll be knee-deep in debt and you find that there's no more easy way out. 

News Flash: I'm here to tell you that a credit card is not a trap when you know how to use it wisely. In fact, that piece of plastic can be a powerful tool for money management when used with utmost care and discipline. 

I've been a credit card holder for nine years now and I'm writing this because I want to tell you that I was not the most disciplined card holder when I started. Like most people, I've made credit mistakes and yes, I'll be very bold to say that I've once fallen into the "credit card trap" with almost no way out. 

But I've learned my lessons the hard way. So if you're planning to get a credit card or are using a credit card in your life now, remember my mistakes so that you can avoid them. Perhaps I can say, "I've made these mistakes so you won't have to." 

TRAP NUMBER ONE: Let's get a credit card just because we can get one! 

Credit Card Traps Through Power Tips

I first applied for a credit card two years into my call center job. I was waiting for a full promotion as a lead trainer. That time, my salary was relatively lower compared to when I was still taking calls as an agent because agents would always have incentives and bonuses while the support team would rarely get bonuses.

One day, my co-trainer/friend just told me that he's applying for a credit card and that it's easy for that particular bank because the application would be online only.

I immediately checked which credit card I'd like to get. I applied for the one with the most basic features. As mentioned on the bank's website, it was the best card for starters - "young professionals who are enjoying financial independence." Wow, I was excited! Two weeks after, I got approved, and another two weeks after, the card was delivered to my house.

I was surprised because the card they gave me was one level higher from the one I applied for. The credit limit I was given was also bigger than my friend's. I was ecstatic and proud! Yes, I got my first credit card right away!


If there's really no reason for you to get a credit card or if you have no real use for it, then you're better off without it in the first place. In my case, I was a young professional and had just given birth. I had a steady or stable income (although it wasn't very glamorous) but I did not really have a plan of getting a credit card at all.

In other words, I was completely fine without a credit card. I was somehow just tempted to try it because my friend tried it too and there was no hassle with the application.

If you really need or want to have a credit card and you think you can handle it, THINK AGAIN. You don't have to apply right away. It's best to plan ahead how you will manage it or how you will use it. What are the only expenses that you should charge to your card? What are the non-negotiables that you should only spend using cash?

Just because there's an easy online application doesn't mean it's the best credit card for you. Some things to consider - features and benefits, annual fee, interest rates, and the convenience of paying the bill. Do your research and compare the fees and rates to other banks to see which one is the best deal for your lifestyle.

We're living in the internet era so there's no reason to skip Google. Most of the things you really need to know are on the internet, but of course, make sure it's not fake news or fabricated story. Use your best judgment and ask credible people for advice. For starters, check out the bank's website or social media accounts.

TRAP NUMBER TWO: Hurrah it's payday sale. I have bills to pay but no worries, credit card to the rescue!

Credit Card Traps Through Power Tips

I was pretty good at using my card for the first few months of having it until December came, and the festive mood in the mall left me in awe. So I bought two jeans on sale at Reborn - charged to my card. Those were the first card purchases I made that were not really necessities. And then there were more.

I felt really happy and satisfied! I told myself that I deserved to buy things for myself. After all, my credit card bank statements were filled with charges from grocery stores - milk, diapers, wipes, food items, and medicines.

The billing statement came and I was - as millennials nowadays would say - SHOOKT. The reality was that my entire salary for one payday would just be enough to pay my bill. Ouch.


In a recent vlog of Heart Evangelista, her husband Senator Chiz mentioned, "if it's on sale and you don't need it, it's expensive."

For me, it made so much sense. Your credit card is an easy target when things go on sale in malls. And there's always gonna be payday sales so it's definitely a trap.

Train yourself to look away from discounts or promos when you don't need the items at all. I was an "impulse buyer" back then and it truly didn't help with my finances. Now, I have learned to stay home during mall sales and when I do need to be in the mall, I leave my credit cards at home.

Having no credit card while in the mall, I didn't really have a choice because I would only bring enough money so that I could control my spending. It's very effective!

Now, even though I would bring my credit card in the mall, I wouldn't be tempted to buy things I didn't need anymore. As a result, I have managed to drastically decrease my credit card balance ever since.

TRAP NUMBER THREE: Online shopping is now made super easy. Special discounts on your VISA card - TODAY ONLY!

Credit Card Traps Through Power Tips

The temptation of mall sales is strong, but the temptation of online shopping with special discounts is even stronger.

I can't recall anymore how many times I've shopped online impulsively. Sometimes they were purchases that made me happy. Other times, they were just blah that I regretted buying.

Aside from that, there's the ultra strong temptation of airlines' PISO sales. It didn't help that there's a limited time period to book, so of course, it's an amazing race to their websites. So I booked, and booked, and booked some more. #TravelGoals as they say.

But then again, I never really thought of how I'd pay for the things I bought online. It's as if my credit card was as good as cash. But it wasn't. So again, the monthly bill came and my credit card bill skyrocketed. Good luck to me.


Avoid instant gratification. I've been applying it ever since I learned my lesson. I'm already doing pretty well with leaving my credit card home when I go to the mall. I figured I needed to do something about the online shopping that is just a few clicks away.

You see, online shops have a way of convincing us that we need that blush pink pair of stilettos, or that navy blue suit, or that latest cell phone. In our heads we say, "yes we need to travel now while the fares are lowest, otherwise, we'll be left out?!"

ONLY THAT WE DON'T. We don't really need those. You don't need those - especially when you have no cash on hand to spend or when you still have a decent pair of shoes, suit, and cell phone. Of course, when you still have a budget for those items after you've paid everything necessary, and you prefer using your credit card instead of debit card, feel free to spend. But make sure it's because you truly find value in what you are spending.

If you're just trying to keep up with social media and project a fake Instagram life, then it's a trap. I've never reached that point - but I did compare myself to the people who seem to have it all figured out when it comes to finances.

To avoid comparison that leads to using money you don't have, stay away from occasions of temptation. Uninstall all online shopping apps. Unsubscribe from all shopping newsletters. Unfollow all shopping social media pages. Just check them out when you really really really need something and you have money to spend.

It might be sad that you need to reach that point, but you've gotta do what you've gotta do. I did all of those. And yes, I managed to break away from the trap.

TRAP NUMBER FOUR: Need easy cash? Your credit card offers cash advance. Just go to the nearest ATM .

Credit Card Traps Through Power Tips

This was probably the most expensive trap for me. One time, I had to travel and I was still short on cash because I was waiting for my salary. I remembered that I could get a cash advance from my credit card account - aha! So I did.

I knew that cash advances have interest rates and fees. For my card, it was 3% of the amount availed or Php 500 on top of the cash advance amount plus interest at the prevailing rate which would be computed from the date I availed until full payment date.

Although it seemed small at first, it all added up. When I got my monthly bill, I found out that I almost maxed out my card!


First things first. It's really a bad idea to travel when you haven't saved for it or when you don't have a travel budget. Once you have booked your tickets, you feel compelled to pursue your travel plans even though you don't have money for travel allowance, to the point that you're just gonna use your credit card even more.

Important. Never use cash advance when you don't absolutely need it. It's hard to keep up with your balance after that. Try to look for other sources of funds if you need cash, but consider cash advance as the last resort. Or don't even consider it at all if you can forego the "need" for cash. Because really, it's not your cash. You're just borrowing - plus with interest and fees.

To avoid having to use my cash advance again, I never asked for my cash advance PIN anymore after my cards expired and got replaced with new ones. I figured it's better that way.

TRAP NUMBER 5: It's okay. I can always pay the minimum amount before the due date and I should be good, right?

Credit Card Traps Through Power Tips

Nope. You're only good in terms of having paid the minimum amount due on time and you are not considered delinquent. I've done this several times. When my credit card balance skyrocketed, I couldn't pay the full amount due but I also didn't want to be late and be charged an even bigger late payment fee.

So the best option I could think was to pay the minimum -- slowly and painfully. Mind you, in my nine years of having credit cards, I never had a late payment. If any, I'd always pay early. My bank even considered me a valued customer and a good payer just for the fact that I was never late and I'd always pay the minimum.

As a result, my credit limit was increased automatically for my first card. Then they sent me another card and waived the annual fee for life. And then they increased my credit limits again and again to amounts that I never thought I could even use or pay. Still, I almost maxed out.

But I was still paying the minimum most of the time. My bank was obviously okay with it because (if you're not aware yet) they could charge me interest rates for paying only the minimum, and yes, that's exactly how they could earn. A trap.


Again, I've learned the hard way. I could barely keep up with my card balance so I looked for ways to consolidate my balances without paying hefty interest charges. I just wanted to go back to a clean slate and pay my debts.

I called the bank, and thankfully, they offered an installment payment term with fixed interest rates. I took that opportunity, so instead of paying interest rates for my interest rates where the rates can balloon even more, I only had to pay fixed interest rates monthly.

This is now the domino effect of everything. When you keep spending money you don't have, you get trapped in thinking that you actually have money. It's a dangerous game to play.

A lot of the tips I mentioned above are mostly band-aid solutions or "right now" solutions. If those will help, I don't see why you can't try them, right? They might work for you too.

But you wouldn't want to reach those financial troubles anymore; you really need to avoid the trap. You need to get to the root cause to avoid (and solve) your credit card woes. Nip it in the bud!

This leads us to the most important tip here which is to use your credit card only when you have a budget for the item at the moment or when you have the capacity to pay for it in full before the due date. Otherwise, your outstanding balances with the interests and fees will add up slowly and then furiously, and before you know it, you have accumulated a massive debt you can't pay anymore.

In a sense, it kind-of defeats the purpose of having a "credit" card but trust me, you will thank yourself in the long run.


If you are already in that season of your life when the credit card balance is already there waiting for you to pay it off, talk to your bank and see what options they have for payment arrangement.

Also, keep track of your spending. Check your transactions online from time to time so that you will realize how much you've already borrowed, and at least you know how much is left from your budget. I keep a paper record of my transactions. I have an online record too.

Be well-informed. Know what benefits you can get from your credit card. How else can you save money? Check out rewards points, cash-backs or cash rebates, annual fee waivers, points for paying extra early, everything.

Understand how your card's interest rates are computed and when fees are charged. Know your due dates and statement dates cutoff like the back of your hand. Do your best to have a clear understanding of the necessary details and study your monthly statement. Usually, you won't read the fine print that comes with it. But go ahead, spend some time to read it.

Fortunately, I've worked for seven years as a specialist and lead trainer in a bank so I got to learn all these things. But even when you don't work in a bank, you can still self-study so that you are more empowered and also careful in using your card.

If you've been a disciplined credit card holder, then keep it up! Remember to pay the full amount on or before the due date, and NOT the minimum amount only. When you pay the full amount, you won't be charged fees and interests at all.

One last thing - treat your credit card bill just like any other utility bill. For example, what's gonna happen if you don't pay your electricity bill, you won't have power right? And you can't deal with that. Or your internet bill! For sure, most of you won't last a day or even a few hours without internet so you have to pay.

If you skip paying your credit card bill, maybe you will still have electricity or internet. But sooner or later, when your fees and interests add up, you will have a hard time budgeting your funds to even pay for your electricity and internet.

Pay on time and in full.

Credit Card Traps Through Power Tips

Even though I've made my credit card mistakes, I'm happy that I've found ways to manage my credit card spending and pay the outstanding balances. Believe it or not, I haven't given up my credit cards even though at one point, I wanted to just cut them off.

I currently have two cards but I only actively use one now. I paid off the other credit card but it's still active. I actually got rid of my credit card dependence by just paying cash for my regular personal expenses and the family's expenses. When I don't have cash or budget for a certain thing I like, I won't buy it.

I realized that when you have self-discipline, good money management skills, and proper financial education, you can continue to have your credit card as a tool to manage your bills and expenses.

In my case, for example, I can see where my expenses go. They are all accounted for because every single expense is listed on my monthly statement. I also get real-time text messages whenever I use my credit card so I know that I'm the only one using it. I'm always alerted whenever something is charged.

I mostly use my credit card for booking travel tickets as it's more convenient. I always earn rewards points or miles whenever I book using my card. I've already used some of my miles for my previous tickets as well.

From Traps to Tips: Avoid Credit Card Traps Through Power Tips

My work is also online and when I need to buy online courses or ebooks to help me learn more about my online job and business, I use a credit card to purchase because that's usually the accepted mode of payment. I also use my credit card to pay for website fees and hosting.

Lastly, to make good use of my credit card, I had my insurance payment auto-debited from it every month and just make sure I allot a budget for it monthly so I won't forget. You can do the same for other bills.

So do you really need a credit card? Evaluate your reasons first and do your research before getting one. It will save you from being trapped. And when you do get approved for a credit card, remember to manage your spending from the very beginning right away and discipline yourself so you can enjoy a worry-free life.

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