To Charge or not to Charge, That is the Question

(image of credit card from Citibank/Think-man from Google)

Most of the personal-finance literature endorses the non-patronage of credit cards, this is due to the propensity of cardholders to over-charge or spend beyond their means.

Credit cards have the effect of confusing your financial capacity due to the illusion of mental accounting, this illusion creates a perception of wealth when there is none. This holds true to persons who are not discipline or financially literate and credit cards holds power, and as Uncle Ben says "with great powers, comes great responsibility."

Credit cards are actually a convenient tool if used in a proper manner. This is a readily available credit line, wherein you can purchase an item and pay for it after a month from purchase thru taking advantage of the one-month float.

The one-month float is charging a purchase after the billing date and paying it in full on the due date which is usually a month from the date of purchase. In effect using a one-month float strategy allows you to take an interest-free one month loan.

Credit card also offers a zero-interest (0%) installment promo, some of my purchases are 0% interest which enables to buy big-ticket items on a layaway basis (hulugan) without incurring additional charges as long as I keep with the scheduled payments.

Credit cards also give out regular promo's that you can take advantage such as but not limited, exclusive purchases, discount purchases, rebates, and rewards.

Credit cards also have an auto-charge capability that is useful in paying your regular utility bills such as power, telecommunication, and water.

I am a holder of a Citibank Credit Card and all of the above is being offered by my card. I pay the amount due in full every month, I received rebates and I received rewards which I have converted to cash voucher which I have applied to some of my billing.

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