The Bangko Sentral ng Pilipinas has stated that almost 7 million Filipinos use a credit card as emergency funds or rather for groceries. To first-time credit card holders, you must know important terminologies before you use it for traveling, online purchasing, dining out, and shopping.
We understand that some of credit card terms can be so intimidating that you’d rather not to sign up to get one than to understand and get worried about your finances.
For better understanding, here’s a quick run-through to some essential credit card terms.
Usually, banks are providing a minimum of Php10, 000.00 up to Php20, 000.00 of credit limit to every first-time cardholder. This is the total amount you can spend using your credit card.
For example, you will buy an android phone using your card; the retailer store will automatically deduct the item’s total amount to your card. To your advantage, you can get the android phone in an instant as well as you can pay the item on a monthly basis with the minimum account. No need to pay in full to the retail store.
Cash Advance Fee
You need cash at the moment and your friends don’t have extra money to lend you. You can also withdraw money from your credit card but not exceeding your limit. In return, the bank will charge you ranging from 3% up to 5% as interest, whichever is higher.
Over Limit Fee
Impulsive buyers tend to have over limit fee. This is a charge to you whenever you exceed to the approved credit limit during a cut-off date.
Late Payment Fee
The main reason why some of the credit card first-time owners were not able to pay on time is they are working full-time office-based. If you happen to pay the balance after the due date, there will be occurring late payment fee to your next billing statement. The amount of this fee is either fixed or depends on your usage.
Therefore, the next time you have inquiries about credit card terms, you don’t have to wait on queue over the phone with a customer representative, use this as your points to remember.