Credit Card Best Practices

If you have a credit card or considering have one, these are the summary of the best practices of owning a credit card:

1. You only need to have either Visa or MasterCard.
   Other brands (American Express, JCB, Diners Club, etc) are not widely accepted, have higher cost although give you exclusive sense.
2. Use credit card as transaction tool, not source of money
3. Always have credit card with ‘interest free period’
4. Follow a good ‘Reward Program / Loyalty Program’ and then avoid using cash for all the transaction and only use your credit card for any transaction as much as possible.
5. Aim to pay the membership fee with your reward program.
6. Pay off the monthly statement to avoid paying interest
7. Always remember:  credit card is DEBT. This temporary debt is perfectly okay since it’s interest free and you got benefit of reward program and you will pay it off every month anyway. But it’s a very expensive debt should you forget this.
8. Avoid using ‘advanced cash’ using credit card.
   Not only the interest rate is very high, but also usually you immediately forfeit the interest free period.
9. Check the monthly statement for any invalid transaction. Report and inquire immediately any suspicious entry for your own benefit.
   If you have internet banking access, check it on weekly timeframe
10. Keep the credit card receipt at least until it’s included in the statement.
11. The credit limit of your credit card need to cover at least 2 times your monthly expense.
12. Destroy the receipt before being put in the rubbish bin (A good shredder will do the job otherwise you need to do ‘manual destruction’)
13. If possible, have a saving account in the same bank of your credit card issuer.
    This will make the transaction between saving and credit card seamless. Internet Banking access betwen them would make it perfect !
14. If possible, own 2 credit cards of the same value for your maximum benefit
15. If you have 2 credit cards, make only 1 card actively used at any one time, don’t use the other one. But try to make even the usage maybe every half year.
16. Yes, you may consider a credit card as source of finance ONLY in the event of EMERGENCY.