Using credit cards in Hong Kong is a common practice – especially among Millennials.

Basic Rules When Using Credit Cards In Hong Kong

According to an article published on, Hong Kong residents between the ages 18 and 28 own at least 2 credit cards. This is considered to be the highest car ownership in the Asia-Pacific region.

The exact ownership is 2.6 – which is more than the 2.1 credit card of Singaporeans – who come in second. This data came from the study conducted by Visa in different countries in Central Europe, Middle East and Asia-Pacific.

According to the study, the main motivator for credit card ownership is the discount that Millennials can get. It is followed by the convenience of being able to shop without cash and through online portals. In Hong Kong, 40% of online purchases are paid through credit cards.

How to use credit cards wisely

There are so many benefits to using credit cards but before you can enjoy them, it is important for you to understand the basic rules that will help you use it wisely.

The thing about credit cards is that it can tempt you to spend more than what you can afford. It feels like an extension of your finances – when in truth, you are using someone else’s money to pay for your purchases.

Credit cards are notorious for their high Apr (Annual Percentage Rate). You can be charged by more than 30% of your balance if you do not know how to pay your card balance properly. To help you enjoy the convenience of credit cards without suffering high debt balances, here are the basic rules that you need to follow.

Plan your credit card use.

Start by including credit card purchases in your budget. This is the best way for you to pay for you to ensure that you will not overspend. When you create your monthly budget, indicate if how much you can spend on it. Is it HK$1,000? If you set a budget, make sure to stick to that limit. And put that amount aside. That way, you can use it to pay your balance when the billing statement comes.

Pay beyond the minimum payment requirement.

The minimum payment requirement is the least amount that you can pay towards your card without falling into default. While it makes your card payments less of a burden, it is actually a trap. It will put you in debt for a very long time – all the while the credit card issuer is adding 30% or more worth of interest into your balance.

The best practice is to pay your credit card balance in full and within the grace period. This is the period between the date of purchase and due date on the billing statement where the transaction is included. If you pay off the balance during this time, you will not feel the effects of the high-interest rate of the card.

Understand the fees and charges.

You should also understand all the fees and charges associated with the card. What are the annual fees? How can the finance charge bloat your balance? What is the late payment penalty?

The more you understand about these fees and charges, the less likely will you incur them. The terms and conditions of the credit card usually indicate these details. If there is anything that you do not understand it, do not hesitate to call the credit card issuer to make clarifications.

Do not go beyond the credit limit.

Going beyond the credit limit has a lot of consequences. It usually means you have reached the highest amount on your credit card balance. It can be quite hard to pay everything off without incurring high finance charges.

You have the high-interest rate to thank for that. Another consequence is the penalty can be charged to you. Some creditors charge the credit card holders who go beyond their card limit. Exercise wise spending habits to ensure that you will not go beyond the limit of your credit cards.

Know the laws.

Finally, you have to know the laws when it comes to credit cards. For instance, you should know that credit card companies can raise your interest rate even if you had been a good and responsible card holder.

This is according to the Hong Kong Monetary Authority. But before they do that, they must let you know of their intention to raise the rates at least 60 days before implementation. This knowledge will make you more conscious and careful of the way you use your credit cards.

How to apply for credit cards

The application process of credit cards will depend on the credit card company. But to get you started, the basic requirements are as follows:

● You should be 18 years old and above.

● You should be a citizen or legal resident of Hong Kong with a Hong Kong Identity Card.

● You should have a proof of residence (e.g. utility bill or a bank statement).

● You should have a source of income and it should be stable. Some banks have income or tenure preferences.

Your credit limit is oftentimes dependent on your income and credit history. You can receive a higher credit limit – and a low-interest rate if you have a good credit score.

The application process is usually very straightforward and you can get the results immediately. It is advised that you ensure your credit history is in good condition so you can get the best terms on your credit card account.

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