Are you financially ready for a credit card?

Credit cards can provide many benefits, but only if you use them wisely. If you believe you fit the bill, then it’s time to apply for a credit card so you can unlock all of its amazing benefits.

Like savings accounts and debit cards, credit cards are one of the more common bank services Filipinos opt for. There are many benefits to owning a credit card: from reward points, to having an emergency source to spend, to the convenience it provides many Filipinos and their families. When used responsibly, a credit card can be the key that unlocks one’s financial freedom.

But how can you tell if you are truly ready to have a credit card? There are a number of ways to know. A reliable indicator of readiness should be being financially responsible, because those who have unsustainable spending habits might only end up with bills that are difficult to pay off.

Ultimately, your readiness to own a credit card depends on your financial mindset. That being said, a credit card can greatly improve the quality of your life, especially when you’re mature and responsible with your finances. Here are some factors that can help you determine if you’re ready to own your first credit card.

You understand how credit cards work

You know you’re ready for a credit card when you understand how it works. To better understand its basic mechanics, let’s look at the difference between a debit card and a credit card.

When you make a purchase with a debit card, you’re paying for it with money inside your savings or checking account. This means there is no remaining liability on your part, because you’ve already paid for the item. Basically, it’s like invisible cash.

When you pay for an item with a credit card, the bank offers you a line of credit, settles your purchase to the seller and requires you to pay this loaned amount in the future. To the seller, your purchase is as good as paid. It’s the bank that you now owe money to. Again, it’s like invisible cash, but you have to pay it back later.

Paying off your credit card bill on time and in full every month is a sign that you really understand how credit cards work. It’s more than understanding the basics, it’s also understanding how it can help you improve your life with smart decision-making.

This allows you to manage your debt accordingly, so you won’t have to worry about interest rates, late fees, card fees, installments, and the other caveats that come with paying off your credit card bill. Repaying the money that you’ve already spent on a purchase in full and on-time means you won’t be surprised when your credit card statement comes in, because you were already expecting it.

You have a stable job

Many banks do not issue credit cards to those who are still on probation, employed for short-term projects, or have no steady source of income, and for good reason; it’s to protect you from falling into debt. So, if you have a stable job and a steady income stream, that’s another factor that says you’re probably capable of owning a credit card.

Having a steady source of income ensures that you do not depend on your credit card to make day-to-day purchases. Without a job, these purchases can accumulate and gain interest whenever you miss your monthly payments, making it difficult to pay off your credit card bill when it arrives. A stable job simply empowers you to use your credit card and provides you with the capability to make the monthly payments.

You already have savings set aside

A sign of being financially responsible is that you have a savings account or emergency fund already set aside. You are not the type who lives paycheck-to-paycheck, which means you are responsible enough to prepare for the future. Both of these are positive indicators that you know how to handle money wisely and responsibly. They also indicate that you know how to budget the money you have and the value of saving resources for a rainy day.

Having a savings account also means you are ready to have a credit card in case you have to go over your budget. In the unfortunate event that you end up spending more than you planned, use your savings to pay the difference, rather than skip on your credit card payments.

Learn from the experience, manage your budget better, and treat the overspend as money that you owe yourself. Rebuild your savings as soon as possible.

You know what purchases to prioritize

When you’re the type who considers the cost and value of an item, you’re less likely to be tempted to go on shopping sprees you can’t afford.

You know how to control your spending habits and rarely do you go over budget when giving into your wants every now and then. Having this sense of financial and budget discipline may also be a good sign of becoming ready for a credit card.

If your situation requires a tighter hold on your money, consider using cash or applying for a debit card instead. This way, you can clearly see and control your spending. After all, with debit cards, you can’t spend money that isn’t already in your bank account.

So, are you financially ready for a credit card? Which of the factors above will you need to work on, if any? Owning a credit card allows you to enjoy privileges and special perks tailored to your lifestyle. By using credit cards wisely, you can make room for more memorable moments in your life! At Metrobank, our credit cards come with top-of-the-line convenience and benefits such as Cash2Go (converting unused credit limit to cash), Bills2Pay (letting your credit card handle your monthly utility bills payment), ON Virtual Mastercard (a virtual companion to your Metrobank credit card), and more.

To learn more about the Metrobank credit cards, visit https://metrobank.com.ph/upgrade/credit-cards.