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.

BDO is so consistent with their terrible customer service. They make my life f*&king miserable.

I have to vent. If you’re having a great day so far, don’t read lest you absorb the negative vibes I have now after another horrifying blood-pressure-raising episode at the BDO Bagtikan branch.

What branch???

When I make a deposit, like when I pay my rent, so I fill out the deposit slip right? Then I have to know the branch too? Who keeps track of the ‘branch’ these days?

Don’t open your TREASURER IN TRUST FOR TITF account at BDO

We opened our TITF (treasurer-in-trust-for) account there (BDO Bagtikan) when we were still processing our incorporation in 2007. I had to go back 5 times just to open the account, and another 5 times to close the TITF (which you do when you’re already incorporated). They kept asking for photocopies of this and that, and a new format of the secretary’s certificate of this and that, have to see the originals, they even rub the notarial seal — what are they gonna make me notarize again if it doesn’t pass their subjective muster? They wouldn’t accept JP’s ID cards, they talked in a condescending manner the whole time every time not at all service-y or polite.

Other than over-the-counter transactions at the teller, every BDO experience of mine has been horrible. HORRIBLE. It makes me cry now just thinking about it.

Secured credit card — BDO Say What???

I ask about secured credit cards at different branches — ah, no officer even begins to understand what I’m talking about. I have to explain that you open a deposit and then hold-out on it, have a deed of assignment, and use that as security for a credit card. Oooh, they don’t have that anymore. But BDO Customer Service Hotlines say they do.

Lousiest Xoom / Remittance Partner ever

BDO is the Philippine partner of Xoom, which we sometimes use for remittances from the US. One time, Xoom suddenly deleted our bank from their affiliate banks so our remittance went nowhere. That’s probably Xoom’s fault. But they assigned it by default to Equitable PCI — where we don’t even have an account. Stupid? Mindless? Ah yes.
We had a Xoom remittance for pickup today. Like I did a couple of weeks ago, for which they gave me hard time because my IDs say Lourdes Marie C. Casas… but the remittance indicates Marie C. Casas. But they gave it to me anyway because I had the right ‘secret word’. So the same thing happened today, and they wouldn’t give it to me. Yeah, as if there’s some other Marie C. Casas with the correct password with the correct amount with the correct reference number. I’m usually empathetic, that they’re just doing their jobs, but they just stood there — not giving me any feasible solution that would make the stakeholders happy (me and my sender).

I swear. I had to put my head down and command myself to breathe in, breathe out. My eyes were fluttering, my heart was pounding, my blood was boiling.

I HATE BDO.
I know I am not alone.
You’re growing too fast for your own good.
But yes, it’s nice of you to keep open longer hours and on weekends.
Maybe you should think about investing in showing your people what CUSTOMER DELIGHT means instead of gobbling up all other banks.

Tags: bdocustomer service, bdo feedback, banco de oro

No credit investigation. No income documents required. – Metrobank Value MasterCard application

Good info for freelancers, college students, or newly self-employed who aren’t ready with their income documents yet. You can Share This article through the link at the end of this post.

I will build my own credit and have my own credit card. I only have a supplementary card and debit card now. I could have gotten myself a Gold credit card based on my old salary but I thought that I didn’t have the discipline to control my spending yet (and my mom discouraged – that’s all). I’ll never know now what crazy stuff I would’ve bought before. I probably wouldn’t have quit yet because I probably got “necessities” (like clothes from Zara or an iPod) on installment.

Now, I’m just thinking of the convenience because it’s such a hassle to manually reconcile my cash on hand with the money I spend. My dilemma now is I’m newly self-employed so I can’t produce the financial statements and ITR yet for the application requirements.

The next best solution is getting a secured credit card. I just keep a small amount in the bank and I get to use a part of that amount as my credit limit. After a year or so of good credit behavior, charging a few small items and paying the card bill on time, I’m bound to get an offer for an unsecured card. Get Rich Slowly readers also recommend this for those with no credit history.

Requirements are typically the same as when opening an account, the deposit, deed of assignment on the deposit, and annual and joining fees.

How can I make the best use of a secured card to build my credit rating?

Buy a few things and pay off the card every month. “People should not get these cards to carry any balance,” Sherry says. “It seems you need to make a few purchases and pay for them. It helps to pay in full every month to show you’ve got this excellent credit rating.”
While secured cards make sure you never spend more money than you can afford while they force you to save, it’s not a good idea to keep one any longer than you have to, experts say.
All secured cards have annual fees and higher interest rates than regular, unsecured cards. If you have enough discipline to use a secured card responsibly, you have enough to use an unsecured card and set up a better savings program on your own.
“We recommend to people that it should be a stepping stone,” Sherry says.

I shopped around. I’m not keen on getting BDO because it’s more advantageous if you buy SM, which I rarely do. And I don’t like dealing with the people at the branch near me. I dropped by the BDO Makati Cinema Square branch earlier today. BDO doesn’t offer secured credit cards. No feedback yet from RCBC Bankard if they offer secured credit cards. B

HSBC people are soooo nice. Their phone customer service and personal bankers… I went to the RCBC Plaza branch to inquire and I wanted to open an account right then and there! (No, I haven’t yet) I added a new column in my matrix.
Disclaimer: I inquired with the banks as part of my due diligence. Don’t take what I write as gospel. Please call or visit the banks and conduct your own due diligence if and when you decide to apply for a secured credit card.

I wish someone had told me or shown me back in college that I should have skipped the weekly movie trip to Glorietta and saved and invested that allowance. It turns out, what I planned for straight from college and into my first job here in the Philippines is very limited compared to what’s expected of me and, in effect, my financial goals and my supposed budget.

Into my first job where I received quite a large salary for an entry-level, I was conscious of spending for the following expenses:

• emergency fund (3 months worth)
• Starbucks coffee every day; Nescafe Ice at Mini-Stop when cash on hand runs out P500/week
• My share for some lunch and dinner dates with JP at Greenbelt or Powerplant Mall P1,000 – P2,000/week
• Nice corporate attire from Black Shop and Zara – because it’s an “investment” at least P5,000 per trip
• Snacks at McDonald’s or Goldilocks or the canteen extra P300/week
• My Smart postpaid mobile P800/month
• SkyCable bills at home, prepaid for 6 months P700/month
• PLDT (DSL Internet and Telephone) bills at home P3,000/month

That shouldn’t have been that much but how come my savings weren’t significant?

1. I spent for what I “needed” (wanted) and then saved what was left over.
2. I left the money in a separate BPI account, which I could easily access online. So I used it anyway if I wanted to buy something expensive.
3. Cut down the take-home treats for those at home (because I have a job! Share the blessing!)
4. I should have decided with my parents which bills I’m expected to share with and the maximum amount I can contribute for: utilities at home, groceries at home, parents’ and aunt’s long-term health care fund, medium-term investments (mutual fund or UIT) for my younger sisters’ education
5. And then, after family obligations, that’s when I can think about splurging for myself and investments for my house or car or retirement, etc.

I didn’t even have my own credit card then, that would have just made my money management a total mess. I can’t begin to imagine how other yuppies I see taking lunch at Greenbelt everyday and using credit can sleep sound at night.

Now you should too open your eyes to the REAL medium-term financial goals for yuppies. It’s not just saving for your wedding or your first child’s education. You have to map out also how you’ll provide for the family that raised you.

Tags: financial goals, financial planning, what should i save for, what should i spend for, college finance, young professional, financial advice, my first job

I now only use credit card for gas purchases and debit cards for online purchases. All other expenses are paid in cash.

The simplest way to describe a debit card is that it’s a prepaid credit card. You can use it to pay online or at the mall (the shop has to have a smart terminal – anyway, just ask the store). You can even use it as a remittance account.
Debit cards available in the Philippines are

• EON from Unionbank- VISA Electron with CVV (P300 annual fee)
• MTV Card from Equitable PCIB – MasterCard Electron
• SCB Visa Electron from Standard Chartered – VISA Electron
• Smart Money – Mastercard Electronic

To buy online
I currently have Unionbank EON debit card now and it serves my needs just fine. You deposit into your account over-the-counter and that’s the maximum you can spend!
I don’t know about the others but the EON card from Unionbank certainly allows you to purchase online, same as if you used a credit card.

The CVV is a 3-digit card at the back of your card which is required when making secure online purchases.

Using a debit card helps you curb your spending habit while taking advantage of the convenience of credit cards.

To create an account, you can sign up at the EON website.

To receive remittances
You can use your debit card as a means to receive remittances from your friends, relatives, or customers, and withdraw from that account by opening a Smart MONEY or EON account at YesPinoy.com (Tell them I referred you – my member number is 37849.)

Why not use a secured credit card? 

Well, isn’t a secured credit card… still a credit card? A secured credit card allows you to borrow only up to 80% of your outstanding savings account balance with the same bank.
This requires you to maintain your bank account balance up so you can enjoy your credit limit. This also means you’re money is stuck there and you can’t move it to higher-yielding investments.
You, of course, have to add checking it and paying it to your to-do list (you do check your credit card statement if all the charges are correct — right?).

It’s also better to keep accounting for debt (if any, that includes credit cards, loans) separate from assets (which include your bank account and investments).

The Foundation for Credit Education says:

For individuals who don’t like to work with figures, the “envelope method” provides a simple way to build a savings fund. This convenient system allows you to set aside money each week for various expenses without making frequent trips to the bank or keeping paper and pencil records.

What do you need?

• Discipline and commitment. If that’s so intimidating, fine, discipline and commit yourself for 30 days (just like a trial period!).
• Past utilities and phone bills, credit card statements
• Envelopes
• Calculator/Spreadsheet, budgeting software

Does this even really work?
The envelope budgeting system has been around for a long time. Working on the principles of paying yourself first and spending money only according to your plan gives you a sense of control that you otherwise wouldn’t. It’s right there in the school of KISS.

Is Envelope Budgeting Effective?

Let’s do it manually before you even think of buying or using software so that you know the principles behind the system. This illustration uses 10 actual envelopes.

1. Get your past utilities and phone bills. You will be basing your budget on the amounts from your previous bills so that you’ll be setting realistic expectations.
2. List down the following on a piece of paper or in Excel:
• Monthly income (fixed or average)
• Fixed expenses
• Savings (Pay yourself first –10% of your income)
• Utilities
• Credit card repayment
• Loan/mortgage
• Gym membership
• Variable monthly expenses – use separate actual envelopes
• Meals
• Entertainment (eating out, movies)
• Big-ticket items (one-off)
• Summer vacation
• Furniture
• Down-payment for a house or car
3. ALLOCATE.
• Divide your paycheck by 1, 2, or 4 (depending how many times you get it). That’s MONEY GOING IN.
• Divide your total fixed monthly expenses as well (1,2,or 4). This is the amount you automatically set aside by auto-debit to a separate savings account you use for spending or withdraw this amount and keep it in an actual envelope. That’s part of MONEY GOING OUT (NOW).
• Divide your variable monthly expenses by 2 or 4, depending on whether you like to keep your spending envelopes by week or every 2 weeks. This is part of MONEY GOING OUT (NOW).
• Divide your big-ticket items by how much time you have left. This is part of MONEY GOING OUT (LATER). If you want to buy a TV 4 months from now, set aside a fixed amount every paycheck so that you’ll have enough when it’s time to buy. Just think how relaxed and in control you’ll feel when you walk into that electronics store knowing how much you can and will spend. It’s very gratifying.
• If your money runs out, say for grocery, it’s up to you if you can give up that extra fruit or if you see you still have money left in your Entertainment envelope, you’ll transfer funds from there to your Grocery envelope.
4. TRACK
• Always carry a pen so you can write down how much you spent for what outside your envelope. It’s definitely easier to write it down at the time you buy something than to accumulate receipts which can get so boring or intimidating you’ll just give up on it. So carry those envelopes with you in your planner or in your wallet and mark them with a pen every time you buy.
• When you use your credit card for, say, dinner under Entertainment, transfer the cash from the Entertainment envelope to the Credit card repayment envelope. Don’t spend money you haven’t earned.
• Every month or every 2 weeks, check out your spending envelopes. How much is left? How much did you transfer? If you have money left over, you can transfer it to your Savings envelope rather than “reward yourself”.
5. COMPARE
• As you can see in the illustration, we haven’t been able to set aside money yet for the vacation and furniture since the expenses based on actual still just zero out. In a few months, when expense are brought down by discipline and continuous cutting back, we should be able to set aside P500-1000 to contribute to the Vacation fund.
• Isn’t that what the Savings envelope is for? No. The savings is meant to build up an emergency fund good for 6 months. This is a good rule of thumb for when you get sick, or a family emergency arises, or you get sacked.

But wait!
What’s exciting too is that we planned for only 2 paychecks per month.

(2 paychecks / 1 mo.) x 12 mos. = 24 paychecks

Something’s fishy! Hm. Look again.

(52 wks / 1 yr )x (1 paycheck / 2 wks) = 26 paychecks/year

There are 2 paychecks that will come in that you won’t be spending out. We didn’t even include 13th month pay yet. So you’ll have extra money left over just by spending only what’s in your envelopes.

Resources

If you want to get more into envelope budgeting, you can read a free excerpt (I had fun reading this) of Money for Life: Budgeting Success and Financial Fitness in Just 12 Weeks, which retails at $9.95. It certainly opens your eyes about the practicality of the envelope budgeting system and how retiring comfortably and controlling debt is possible. It has a storybook approach rather than how-to-this how-to-that or motivational Robert Kiyosaki “I promise you riches” sort of book.

Here’s a video presentation that shows pretty well how Envelope budgeting works.

Here’s also a helpful 4-page budget discussion from Snowmint Creative (more technical and shorter reading than the “Money for Life” excerpt.)

Is there software I can use?
The following are based on the envelope budgeting system. For those based in the Philippines, right now I’d say your best bet would be Quicken. The Mvelopes team has yet to expand services and I’m still evaluating the other products.

Free/Open-source

• Budget Lite 2.7 (Mac OS) by Snowmint Creative Solutions LLC – No product support
• My Spending Plan – free and online

Paid Software

• Get Quicken by Intuit and then enhance with your envelope budgeting system.
  Quicken Basic 2007 is $29.99 ++ for add-ons –> Save 17% + Free Shipping
• Very popular is Mvelopes web application software by In2M Corporation. It’s based precisely on the envelope budgeting system and accesses your credit card and online banking accounts.
• Budget (Win/Mac) by Snowmint Creative Solutions LLC
  Free to try / $29.95 digital download
• You Need A Budget
  $39.95 + Bonuses (60-day money-back guarantee)
• The B Word (Win)
  $34.95 (90-day money-back guarantee)
• Make$.Cents 4.1 (Win)
  FREE to try for 30 days; $29.95

I hope you got a practical grasp of envelope budgeting. It’s as simple as your money in equals your money out to different saving/spending envelopes. No overspending.
If you want a more technical method, we’ll take a look at spreadsheet budgeting next.

Overspending? Does it seem as if you never know exactly where you are with your finances? I’m not going to promise you’ll be rich overnight but at least take a look at the budgeting techniques that have worked for many others.

Why is it important to even take a look at your finances? The B Word is a scary, intimidating word. I have tried so many times to allocate my allowance, imposing strict limits in Excel, but not thinking twice about swiping my debit card when I find a great pair of shoes (on sale!). I’m supposed to be a numbers girl but I realize that it’s been hard because I haven’t seen a concrete approach to follow, that’s worked for others, and is easy to do.

I think I’d rather call it Cash Flow Management, since majority of the young people do start out with cash rather than assets and investment.

You can’t really count on your income, your allowance, or your topline to increase – you don’t really have control over that. What you do have control over, believe it or not, is your expenses, the money that goes out of your wallet.

We’ll take a look at concrete approaches to budgeting. Ways that work and aren’t just all principles or all-talk.

We’ll take a look at both envelope budgeting and spreadsheet budgeting.

From a guy who works with a petroleum company

Tips on pumping gas.

I don’t know what you guys are paying for gasoline… but here in California we are also paying higher, up to $4.23 per gallon. But my line of work is in petroleum for about 31 years now, so here are some tricks to get more of your money’s worth for every gallon..

Here at the Kinder Morgan Pipeline where I work in San Jose,CA we deliver about 4 million gallons in a 24-hour period thru the pipeline. One day is diesel the next day is jet fuel, and gasoline, regular and premium grades. We have 34-storage tanks here with a total capacity of 16,800,000 gallons.

Pump in the early AM

Only buy or fill up your car or truck in the early morning when the ground temperature is still cold. Remember that all service stations have their storage tanks buried below ground. The colder the ground the more dense the gasoline, when it gets warmer gasoline expands, so buying in the afternoon or in the evening….your gallon is not exactly a gallon. In the petroleum business, the specific gravity and the temperature of the gasoline, diesel and jet fuel, ethanol and other petroleum products plays an important role.
A 1-degree rise in temperature is a big deal for this business. But the service stations do not have temperature compensation at the pumps.

Ask the Attendant to Pump Slow

When you’re filling up do not squeeze the trigger of the nozzle to a fast mode. If you look you will see that the trigger has three (3)stages: low, middle, and high. In slow mode you should be pumping on low speed, thereby minimizing the vapors that are created while you are pumping. All hoses at the pump have a vapor return. If you are pumping on the fast rate, some other liquid that goes to your tank becomes vapor.
Those vapors are being sucked up and back into the underground storage tank so you’re getting less worth for your money.

Fill up when HALF-FULL (HALF-EMPTY)

One of the most important tips is to fill up when your gas tank is HALF FULL or HALF EMPTY . The reason for this is, the more gas you have in your tank the less air occupying its empty space. Gasoline evaporates faster than you can imagine. Gasoline storage tanks have an internal floating roof. This roof serves as zero clearance between the gas and the atmosphere, so it minimizes the evaporation. Unlike service stations, here where I work, every truck that we load is temperature compensated so that every gallon is actually the exact amount.

Gas Truck? Don’t gas up just yet

Another reminder, if there is a gasoline truck pumping into the storage tanks when you stop to buy gas, DO NOT fill up –most likely the gasoline is being stirred up as the gas is being delivered, and you might pick up some of the dirt that normally settles on the bottom. Hope this will help you get the most value for your money.

DO SHARE THESE TIPS WITH OTHERS!

Thanks to Sheila of ButterNToast Toastmasters for letting us in on these tips.

Tags: tipson how to save gas, savings tips