Benefit of having 2 (two) Credit Cards of Similar Value

Two credit card are considered of similar value if both of these credit cards have similar credit limit, similar interest rate, both have reward program  and have similar interest rate period. The credit card can be issued by different bank, or have different brand (i.e: Visa vs Mastercard) but as long as 4 factors above are similar, it still can be consider of the same value. So, why we will have a benefit if we can have 2 credit cards of similar value ?

Although you are already following the credit card best practices, sometimes – it will happen sooner or later, an event out of your control just happen. And as always, you are not to be upset about it (remember, it’s outside your control – nothing you can do about it) – especially since you have prepared yourself and have mitigate this risk. Read more

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.

7 Ways to Maximize The Benefit of Credit Card

Credit card is a great product and extremely useful for day-to-day life activity. Nowadays,  I would not be able to imagine a world without credit card. But yet, I can find some people even in the modern country like Australia or US that try to avoid credit card as if it’s an evil or illegal product. Yes, it’s true that credit card could trap you into debt, but the same thing as knife analogy. Knife could kill, but it’s very useful, then people need to learn how to use and respect knife rightfully not avoiding it. How people can learn how to use credit card properly and squeeze out all the benefit of a credit card ? By financial education… Let’s start with these 7 items Read more