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.

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.