An asset is something that puts money in my pocket. A liability is something that takes money out of my pocket.
– Robert Kiyosaki
With that definition, you can assess if your credit card is an asset or a liability.
Credit Card as a Liability
Most of us start using a credit card without acquiring enough knowledge how to you use it for our benefit. By default, we use it against us. We swipe it even if we don’t have the money to pay for the expenses incurred. Before we know it, we’re in deep credit card debt.
Credit Card as an Asset
Reading Terms and Conditions may not be appealing to many, but doing so will help us maximize our credit card usage. There are credit cards that will reward us with free flights and cash backs among others. We can know the advantages of the credit card we’re using when we dig deeper (i.e. read the T&C).
My Credit Card is an Asset
My credit card wasn’t always been an asset. Two noteworthy moments that will prove that claim:
- I bought a laptop using my credit card after some rundown of why I should buy it. After I stepped out of the shop, laptop in my hand, I started thinking about selling it.
- I incurred a 6-digit credit card debt when I joined a business I don’t understand.
Brilliant, I know.
But that was in the past.
I already learned to use credit card for me, not against me.
How to use Credit Card as an Asset
You have to know what reward you’re looking for in a credit card. If it’s free airline tickets, go for Air Miles credit card. If it’s cash back, then go for Cash Back credit card. Most credit cards will award you the reward if you are in good credit standing.
Every time you use your credit card, you will earn points which you can redeem. In our example above, you will earn air miles or cash back. That, my friend, is how to use credit card as an asset.
But don’t be quick to apply for any credit cards. Look for the nitty-gritty.
My current primary credit card is an Air Miles credit card. But after searching for the credit card that I believe will give me the maximum benefits I am looking for, I discovered that my current credit card didn’t make the cut.
Citi PremierMiles Card
This is the credit card that I would recommend to anyone who wants an Air Miles credit card. With this credit card, you will earn 1-never expiring mile for every Php30.00 spend. With my current Air Miles credit card, I earn 1 mile for every Php150.00. What’s worse? It expires.
UnionBank Platinum MasterCard
Now this is the credit card that I would recommend to anyone who wants a no-fuss Cash Back credit card. With this credit card, you will earn 1.5% cash back on all purchases, every day. No CAPs. My current credit card offered me a Cash Back credit card, but their T&C are too complicated my head hurts.
- I’ve been with them for nearly a decade.
- They’ve been quite generous in waving my annual fee for almost the entire lifetime of my credit card.
- I never encountered any difficulty in communicating with them.
- I updated my employment status with them (i.e. Not Applicable) and yet I still get an offer for another credit card.
- I have a secondary credit card with Citibank, but I find it difficult to communicate with them (e.g. My name wasn’t still updated from maiden to married after submitting to them all the forms they requested for the nth time.).*
- UnionBank caters to high-end clients, and there’s no high-end in being a housewife. I know because I asked.
By the way, my primary credit card is HSBC in case you’re wondering.
*Update: I am impressed with Citibank’s Live Chat feature. I tried to request an update for my name and status via Live Chat and it was processed within two weeks. Finally!
My current credit card with them is Citi Rewards Card. By reading the T&C and exploring their online banking, I discovered that I can actually redeem their (take note: non-expiring) points for an Air Mile with the Frequent Flyer Program I am enrolled in. 1 Air Mile is equivalent to Php97.50 spent using the Citi Rewards Card. That’s 35% cheaper than my current primary credit card! With that discovery, I’m thinking of making Citibank my primary credit card.
*Another update: It’s official. Citibank is now my primary credit card—husband approved!