Friday, May 30, 2014

Finally: Financial Freedom

It took me 3 years to get out of credit card hell and another 6 months to finally find the will to cut it. I wanted to keep it for emergency purposes because it had been handy when I traveled abroad but something broke the camel's back and I was very vocal about it when I was asked.

My Story
I usually don't want to mention the name of an establishment or don't blog anything about an establishment at all if what I will be writing is full of negativity so I will keep this short before I move on to the lesson.

I picked up the habit of not answering unknown numbers because of them. Last year, they would call right smack in the middle of a production meeting, offering some promo or another. When I said no, two more callers attempted to sway my decision, telling me that I had access to this much money etc. etc. Pissed, I told them, "Check my records. I just paid off all my debts and you want me to go back in there. Bug off."

In the last couple of weeks, they were back. I was probably in the middle of a lecture or consultation when I saw that I had more than 5 missed calls. The next day, I answered a call from the number, thinking that it might be from a colleague and there it was again...them telling me I had access to this much money. I was tired of saying NO or NOT INTERESTED over and over and over and over again. So today, I went to the Makati branch and told them to cancel my card. I was adamant about this and nothing could convince me to change my mind.

Citibank: If you're reading this, I hope you realize that those callers are turning off your cardholders.

Some Tips
This isn't a negative post. If anything, I'd like my readers, especially new credit card owners and those contemplating on getting one, to think very deeply about finances. Here is the harsh reality of what I learned:

  1. If you're paying only for interest every month, you lose. It doesn't matter how high your salary is. Imagine having enough money to pay for anything you want but you can't because it all goes to your debt + interest.
  2. Buy only what you can afford.
  3. Pay in FULL every month. This was my standard practice before the expenses (luxury mostly) started piling up. Before I knew it, I could no longer pay in full.
  4. Watch out for those little things. Like a bunch of P100 purchases. They pile up.
  5. When they ask/tell you that they are increasing your credit limit, SAY NO. This was what got me in trouble.
  6. Pay your credit card bill 5 days before the deadline. Happened to me a couple of times: Even though I paid a day before the deadline, via BPI Express Online, Citibank only registered the payment 2 days AFTER the deadline. I was penalized and it wasn't even my fault. The painful part is that if your debt is at the 6-digit number, the penalty is not going to be a light one.
  7. If a bank does not ask permission to send you pre-approved cards or ask permission before they increase your credit limit, let it go. There was a time when 2 banks sent me 3 pre-approved credit cards and I nearly had a heart attack when I saw that I was being charged for membership fees. I was basically being charged for services I did not ask for. Heck, they weren't even my banks so I still have no idea how they got my information! There should be a law against this because it is very inconvenient to have to go to a bank you never transacted with and tell them personally that you're not interested in their cards.
Don't get me wrong. I still believe in the power of plastic and have one remaining credit card, also pre-approved and has a much smaller credit limit (thank goodness). The difference is that BPI asked me for permission before sending it over. If I wasn't answering calls, they'd text me to identify who they were. Those little things count. If there's something iffy about my statement, they immediately do something about it, not tell me to deal with the merchant myself.

Last and most important: Credit cards are better off used for emergency purposes. It's so easy to spend money that you don't have when you are armed with credit cards, but think about it this way... you know those beggars on the street with nothing but their clothes on their backs? If you are in credit card hell, you are actually more impoverished than they are. They have 0 balance while you are in the negative. I used to look at them with envy, knowing that I had less. 

This was why I was determined to gain financial freedom. Now that I have it, I am never going back. I make more than enough to pay my rent/utilities and other bills, but I also have enough to keep my studio/laboratory running. I am living a semi-retired life and I say "semi" because running your own business is rather far from retirement. It's something I enjoy doing, though, so it doesn't feel like work.



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6 comments :

  1. Love this entry. I got a credit card because the parentals usually ask me to make big-ticket (ish) purchases on their behalf, since I'm the only one working and my siblings are all still in school. The credit limit is a pittance but I find that it's more than enough to do exactly what I wanted it for. Just hope they don't increase my limit without telling me too!

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  2. Yep! This is why I keep my BPI credit card, for purchases that cannot be easily made with cash. I'd hate walking around with more than 5K in my pocket, makes me paranoid.

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  3. I agree with this post... It gives you more control, and makes sure you're still within your limits.

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  4. It's alarming how credit card companies urge people to spend more than what they have.

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  5. Agree with this. My dad taught me the same principles (pay in full every month) and that made me keep a tight watch on buying only what I can afford.

    And yes, BPI is the best. I've had BDO for almost two decades and they never upgraded me. BPI offerred me a Gold on the get-go and later offered me BPI Amore with no annual fees for life. Goodbye BDO.

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  6. Wow 2 decades? I had BDO credit card. The only good thing I can say about them is that when I killed my card, which they gave me without my permission, they lowered the fee I had to pay. TBH, the only reason I had to pay something is still annoying -- there were people telling me a qualified for something and I was stupid enough to say yes and then I saw there were three monthly charges against the card. Aynako.

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