How to Keep Track of Credit Card Charges

The HSBC hotline 85-800 is practically on the quick-dial of my phone (sure, if it had that function!) I can be pretty OC about my outstanding balance and available balance.

How do I keep track of my credit card spending?

I have a dedicated sheet in my white Project Paper pad (I have 2, yellow and white if you’d like to know. P24.50 each from National Bookstore and they’re ever-present in my always-bulky pink shoulder bag. The bag is unlabeled and was a birthday present on my 21st birthday — roughly 2 years old. Now that I look at it, it does look a bit battered so I guess I should go easier on it since I don’t plan to buy a new bag just yet.

So back to the page on my pad paper. Like today, I’m at Coffee Bean, once again breaking my diet oath. So I make my entry right away:

5,937.28 – 6/15 – P354 – Coffee Bean
Running balance – Date – Transaction amount – Store

Easy enough, right? Since my cutoff date was June 14, I entered this on a new sheet. So this sheet is the one I’ll be comparing to my next next credit card statement. The running balance is just the sum of all previous entries.

Running balance on your cutoff date = full amount due on your next due date. Check any discrepancies with your records then confirm with your credit card’s hotline. Possible causes might be a forex difference, hidden charges, or fraudulent transactions.

Effect on your running balance:

• Every time you sign on that charge slip (+)
• Every time you buy online (+)
• Pledges/donations to UNICEF (+)
• Annual fee (+)
• Waived annual fee (-)
• Payments (-)
• Refund (-)

Other Monitoring Tools

Is the pad a little impractical for you? You can also use an index card that you just fold up in your wallet. The BDJ planner also has a credit card sheet in its monthly view. I guess you can use a spreadsheet, I tried that for ah while but it’s hard to be consistent when, of course, you spend while you’re away from the spreadsheet software.

Pay the Full Amount Due

I know a lot of people don’t even bother to monitor their credit card expenses and/or only pay the minimum amount due.

Why do you have to pay the full amount due?

To illustrate:

Total Amount Due P6,825.34
Minimum Amount Due P500 — P500 or 5% of the total amount due, whichever is higher

A lot of newbie credit cardholders pay only either the minimum P500 or say only P3,000 as partial payment by the deadline. If you pay any amount less than the total amount due, which is your principal, you start incurring interest. That’s the 2.5-3.8% every month! That’s called revolving or borrowing; you’ll incur interest.

Check your monthly interest rate. BPI Classic has 2.75%, BPI credit cards have 3.4%, HSBC credit cards have 3.5% finance charge/interest per month.

Let’s say you have a credit card with:
Monthly interest rate: 3.5% (usually the only number highlighted on flyers)
Annual percentage rate (APR): 3.5×12 mos = 42% per annum

On Month 1 you charged P10,000, that’s your principal.
The due date flies by and you only paid P5k. Next bill, you’ll likely owe:

P350 interest charge (P10,000×3.5%)
P5,350 balance from your principal
= P5700 total amount due (Month 2)

Then you paid P2k. Next bill, you’ll likely owe:
P187.25 interest charge (P5,350×3.5%)
P3,537.25 balance from your principal (5350-(2000-187.25))
= P3,724.50 total amount due (Month 3)

So far, you’ve paid P7,000 and paid about P500 in interest. It doesn’t seem so bad when the amounts are smaller but if that were P100,000 instead of P10,000. Move everything up a decimal place and the picture won’t be so pretty.

Read thoroughly your credit card terms and conditions. Bank websites will usually have the application form online; you’ll find the terms there.