Credit cards are for the convenience of their holders – the customers. Credit card holders can enjoy shopping even if they don’t have cash as long as the total charges don’t exceed their maximum credit line. Customers may also enjoy rewards and points which can be redeemed for cash, airline tickets, hotel room accommodation, gas, groceries and other products. However, a credit card may also bring troubles to its holder if not used the right way. It can cause debt problems and can give you a bad credit score. Security must also be a priority when using credit cards to avoid fraudulent transactions appearing on your bills to be paid. Whether you are a new credit card holder or one who have been using it for years, it’s still nice to learn more things and tips about how to use credit cards wisely. Let us remember the following Dos and Don’ts of using credit cards.
1. Read and understand the contract between you and the issuer or the “Terms and Conditions” of the credit card before using it.
2. Keep your card number, Card Verification Value (CVV) for VISA, Card Validation Code (CVC) for Mastercard, Card ID (CID) for Discover, and other security code or information confidential. You should only be the one to know these pieces of information.
3. Sign your credit card immediately after receiving it from the issuer. Make sure to use permanent ink.
4. Remember that your credit card is as valuable as cash. Hence, keep it safe like your cash.
5. Keep a list of your credit card numbers and their card company hotline numbers so that you can still know your CC number and call the card company to report a lost or stolen card. The hotline numbers are also important for contacting the CC companies for disputes and questions on your billing statements.
6. Make sure that all the transactions on your credit card is done in your presence.
7. Always check your card when returned by the cashier or sales personnel to ensure it is yours and that is has not been tampered in anyway.
8. Always review and check all the details on the sales slip before signing and confirming your transaction.
9. Always retain receipts or invoices of your transactions and check them against your billing statement. If there are discrepancies, report them immediately to the card issuer.
10. Pay your bills on or before their due dates to avoid penalties and finance charges.
11. Make sure your payment arrives on time. If you are paying by check or through a payment center, find out if there’ a lead time before payment is posted to your credit card. If there is, pay in advance to ensure you have the allowance of the time to transfer the fund or payment.
12. Pay off your highest interest-rate cards first, if you owe money on more that one credit card.
13. Before discarding old statements, even of closed accounts, shred them into small pieces.
14. Notify your issuing bank of any changes in your contact details and address.
15. Inform the credit card company immediately when card is lost or stolen to avoid paying fraudulent transactions.
16. Always check the security of the e-Commerce website before you make any online transactions. The URL address of the website must start with “https” and there should be a padlock icon located at the URL address bar (for Chrome browser) or at the lower right portion of the webpage (for Internet Explorer). For Mozilla Firefox browser, they use the Site Identity button located at the left of the URL address with colored text. Once the Identity button is clicked, the website’s security information pops up.
Example of a verified website (Paypal) on Firefox browser.
1. Don’t give any credit card information (card number, name appearing on the card, expiry date and security code) to anyone as these can be used to make unauthorized purchases.
2. Don’t sign a blank charge slip, as it may lead to misuse and misappropriation of wrong charges or charges exceeding to the amount of your transaction.
3. Don’t let anyone swipe your card twice without giving you a “transaction cancelled” receipt for the first swipe.
4. Don’t fax your credit card number. Your credit card number can lie for hours for others to see at the other end. Anyone passing by can record your number and begin to use your card number fraudulently.
5. Don’t leave an expired card lying around. Cut the card horizontally to ensure that the magnetic stripe at the back is divided.
6. Don’t respond to any scam emails, letters, text messages, or telephone calls seeking credit card or your account information. In case you receive one, call your issuing bank on the number at the back of your credit card for verification. Do not call the numbers given to you by an unknown caller pretending to be an officer/staff of your credit card issuer.
7. Don’t use your credit card to withdraw cash from ATM or for cash advance, as much as possible. This is an expensive form of credit because they usually have higher interest rates than regular credit purchases plus you might also be charged with cash advance fee and ATM fee for withdrawing your cash advance on the ATM.
8. Don’t perform online transactions in public places as in cybercafés, school and public libraries.
9. Don’t use your credit card for regular or ordinary purchases and don’t make it a habit of shopping through credit even if you can bring cash.
10. Don’t make it a habit of paying only the minimum payments. Paying the minimum-only payments can lead you to higher accumulated debt with higher interest to be paid. It will also become more difficult for you to pay off your debt if some of your monthly dues will be forwarded to the next billing.
11. Don’t keep your financial difficulties and inability to pay your debt undisclosed to the credit card company. Call your creditor and explain your situation and ask for assistance or negotiation.
12. Don’t be an impulsive buyer. Don’t use your credit card for buying your wants, instead of your needs.
Reference: Bangko Sental ng Pilipinas (BSP) Primers