10 Things I Wish I Knew Before I Applied for my First Credit Card

I was 22 when I got my first credit card. A colleague from my previous job referred me to a credit card agent. As soon as I got the documents, I filled up the application form and submitted all the requirements to the agent. After a week or two, I received my first ever credit card.

My friend was so excited about telling me that I could buy a lot of things with my first credit card. She told me that I could just pay my purchases on an installment basis.

I was naive, financially illiterate, and very dumb! My younger self didn’t bother reading the fine prints and just swiped to my heart’s content.

And to make matters worst, I also just paid the minimum amount due monthly.

I bought a new TV. And I also booked a couple of flights and treated my friends to nice restaurants until I maxed out my first credit card.

I just continued paying the minimum amount due until I resigned from that job. And since I was unemployed for some time, I started reading about the bills that I received from the bank and shocked by the total amount that I owe them and the interest that I was paying.

It was barely making a dent and it seems that the amount that I owe them was not getting smaller.

Again I was young, naive, financially illiterate, and extremely dumb and lazy to read/research about the things that I was getting myself unto.

Luckily, my credit limit was not that high and I was able to pay that off once I got a new job. Paying everything off was my main priority and I did not purchase anything until it got cleared.

I cut my card and it took me a couple of years before I applied for another credit card.

I got traumatized by my own laziness and stupidity which cost me a huge chunk of money that I could have used for something else or better yet – money that I could have saved.

You don’t have to go thru the same mistakes that I have been through.

Here are the ten things I wish I had known before I applied for my first credit card:

Table of Contents

Read the Terms & Conditions

This would not have happened if I read the attached papers and familiarized myself with the terms and conditions of the credit card. I would have learned the interest rates, penalty rates, etc.

Doing this step alone could have saved me from being embarrassed to myself. And of course, I could have saved all that money that I ended up paying the bank.

This is one of the lessons in my life that I definitely learned in a hard and costly way.

Now, every time I sign up for a new card, investment, etc, I make sure that I read everything given to me.

If there’s something that I do not understand, then I ask someone I know who has more knowledge than me for whatever I was applying for.

And oftentimes, I also check Google.

Interest Fees Can Be Avoided

If only I knew this, then I wouldn’t have swiped for the things that I know I wouldn’t be able to afford to pay on the due date or I could have opted to get the 0% Installment promos available during those times.

The computation for the interest is clearly stated in all documents included in the first letter that you get from the credit card companies. It’s also available on their websites so you could check it before you apply for any credit card.

You Can Pay the Whole Amount

I know now that paying just the minimum due will get me into a huge debt with the credit card companies.

You don’t have to be subjected to the interest fees if you pay the whole amount that you owe every due date. Since I know this now, I don’t use my card to purchase anything that I know I could not afford to pay when the due date comes.

Now, I also don’t subscribe anymore to the idea of purchasing items that I could not pay outright. Even if it’s eligible to the usual o% Interest Installment promos of my card. This way, I keep myself debt-free and worry-free at the same time.

Different Credit Cards Have Different Sets of Fee

Before applying for any credit cards, you should shop around first to see which credit card offers the lowest interest rate.

We all know that sometimes, due to some unforeseen circumstances, we will be swiping our cards and won’t be able to pay it outright especially during personal emergency situations.

Annual Membership Fees Can Be Avoided Too

I used to pay the annual membership fee every time it appears on my monthly bill. I didn’t bother researching ways on how to avoid paying it. Later did I know that the annual membership fee can also be avoided. And all it takes is a quick phone call.

Most of my friends just call their credit card companies and ask to waive their annual membership fees. Although bear in mind that it may or may not always be waived depending on the circumstances.

Some of my cards will waive the membership fee without any questions asked, some cards have a minimum spend requirement before they could waive the fees, and sometimes there are seasonal promotions wherein they waive the annual fee.

And also, know that there are credit cards that offer free annual fees for life.

Credit Cards are not Evil

Credit cards are not evil and they can be your best bud if you use them correctly.

I have amassed points and miles that I was able to convert later on to free flights. There are numerous tips and tricks available online on how you could maximize the benefits of owning a credit card and I’ll be writing a separate post about it soon.

You Can Use Your Credit Card as a Financial Leverage

Citibank has this Click for Cash/Call for Cash (I think now it’s called Citi Speed Cash) service wherein you can loan a particular amount of money for fixed interest and it will be billed to you on a monthly basis.

The interest then was so low. I did use this product to pay for the downpayment of my condo unit. I find the interest back then way lower than what was offered to me by other banks. This product is different from its cash advance facility.

I also recently made another loan to finance another small business project of mine.

Recently, I noticed that other credit card companies are offering similar products. The process is hassle-free and did not require me to submit any additional documents.

And the money was also transferred to my account in just a few days. If you’re interested in availing of this product, be sure to check out your bank’s website.

You can also call their customer services hotline to learn more about the details.

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There are also Freebies and Tons of Discounts

With the increasing competition as years go by, credit cards have been stepping up in improving their service offerings to their customers.

Almost every credit card nowadays could give you discounts for various hotels and restaurants for as much as 50%.

Some credit cards will even give you freebies for every X amount of purchase and so on.

My favorite cards are travel credit cards that give me free access to airport lounges. For someone who loves to travel, this is definitely a great perk that I really enjoy having.

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Credit Card Fraud is a Real Thing

Early last year I received a text message that my credit card was suspended due to an allegedly fraudulent transaction. I immediately checked my account online and saw that there’s a very small amount transferred to a charity overseas.

The charity organization is legit. The amount was really small to be bothered with.

But the problem was, I did not make that transaction.

I immediately requested my card to be canceled and requested a card replacement at the same time.

Thankfully, they caught this fraudulent transaction right away.

After doing some research online, I found out that scams like this exist. Usually, the fraudsters will make a very small donation to a charity. And since it’s too small to bother anyone with, some people didn’t bother checking it anymore. Then, after a given period of time, they will use your card to purchase high-ticket items.

It seems that the fraudsters are using that donation transaction to gauge if your card is active and if the owner frequently checks his/her account.

Since this is a long topic, I will also write a separate post about this.

Stay vigilant in checking your credit card bills and always check if all the transactions were indeed made by you.

If you have any inkling or if your guts tell you that your card information may have been compromised at some point, then do not hesitate to call your bank to replace your card.