CREDIT CARD FOR BEGINNERS | CREDIT CARD 101 PHILIPPINES | What you need to know

Summary

Charm from Reddit Adult Philippines discusses the ins and outs of credit cards in a comprehensive video. She covers the basics, types, and associated fees, highlighting the pros like convenience and rewards, and cons including overspending and high interest rates. Charm also provides guidance on obtaining a credit card, emphasizing the importance of understanding terms and fees, and securing one's card to prevent fraud.

Takeaways

• 💳 A credit card is a tool that provides a line of credit from a bank, allowing you to spend money and pay it back at the end of the month.
• 🔄 The billing cycle and payment due dates are essential to understand how credit cards operate on a 'buy now, pay later' basis.
• 🏦 Different types of cards include prepaid, debit, and credit cards, each with varying levels of access to funds and spending flexibility.
• 🔑 Credit card brands like Visa, Mastercard, and American Express offer different promos and partnerships with merchants.
• 🛍️ Pros of using a credit card include convenience, flexibility in budgeting, security, rewards, and building credit history.
• ⚠️ Cons include the risk of overspending, high interest rates, penalty fees, and the potential for fraud.
• 📝 Applying for a credit card involves meeting age requirements, providing proof of income, and having a good credit history.
• 💼 Credit card tiers range from basic cards with no annual fees to premium cards with high annual fees and exclusive benefits.
• 💵 Fees and charges include annual fees, late payment fees, interest fees, over-limit fees, cash advance fees, balance transfer fees, and international transaction fees.
• 🔒 Upon receiving a credit card, sign the back, activate it, link it to a bank app, read the terms and conditions, store it securely, and never share sensitive information.
• 📚 The video aims to educate viewers on the comprehensive aspects of credit cards to make informed decisions about personal finance.

Q & A

What is the primary purpose of a credit card according to the video?

A credit card is a financial tool that allows you to spend money via credit, essentially borrowing from the bank with a line of credit that you have to pay back at the end of the month.

How does the billing cycle of a credit card work?

The billing cycle, for example, could be from July 8th to August 7th. All expenses incurred during this period are typically due at the end of the month, which might be August 30th or 31st.

What is the difference between a prepaid card, a debit card, and a credit card?

A prepaid card must be loaded with money before use and isn't linked to a savings account. A debit card is linked to a savings account, allowing you to spend the money in the account. A credit card provides a line of credit from the bank, which you don't have to load or have in savings to use.

What are some of the credit card brands mentioned in the video?

The video mentions Visa, Mastercard, Unionpay, JCB, Diners Club, and American Express (Amex) as some of the credit card brands.

What are some of the advantages of using a credit card?

Advantages include convenience, flexibility in budgeting, security, the ability to dispute unauthorized charges, earning rewards, and building credit history.

What are some of the potential downsides of having a credit card?

Downsides include the risk of overspending, high interest rates if the balance is not paid in full, high penalty fees for exceeding limits or late payments, and the risk of fraud.

How can one apply for a credit card?

One can apply for a credit card by walk-ins at a bank, applying online, or through credit card pop-ups in malls or grocery stores.

What are some requirements for applying for a credit card?

Requirements generally include being at least 21 years old, filling out an application form, providing valid IDs, and proof of income. For employed individuals, this could be a certificate of employment, pay slip, or ITR. For business owners, it could be an ITR or financial statements.

What are the three tiers of credit cards mentioned in the video?

Tier one includes basic credit cards with no annual fees or rewards but smaller credit limits. Tier two comprises mid-tier cards that offer rewards and cashbacks but have annual fees. Tier three consists of premium credit cards that offer higher payouts, exclusive benefits, and the highest annual fees.

What are some of the fees and charges associated with credit cards?

Fees and charges include annual fees, late payment fees, interest fees or finance charges for unpaid balances, over-limit fees, cash advance fees, balance transfer fees, and international transaction fees.

What are some of the important steps to take after receiving a new credit card?

Steps include signing the back of the card, activating it, linking it to a bank app, reading the terms and conditions, storing it securely, and never sharing sensitive card information.