Who does not have a credit card account? More often than not, women are tasked to spearhead shopping errands. That is a fact. Take note that it is not always caused by your love for shopping but more of your responsibility to make sure that your house is well stocked with basic commodities.

Most consumers in Hong Kong have admitted to having at least one credit card account. In 2014, Nielsen conducted research that revealed how 50% of their respondents in Hong Kong admitted that they prefer to use credit cards over other modes of payment.

You cannot really blame them because it is quite convenient to use this card for purchases. You can make financial transactions even if you did not bring any cash. Among the many benefits is how it protects your cash from theft. When you carry cash and it is taken from you, it will be very hard to get it back. If you lose your credit card, you can simply call the issuer to freeze your account so it will not be used for unauthorized transactions.

There are many benefits to owning a credit card. This is why it is natural for you to apply for your first credit card account as soon as you graduate from college or start working.

5 Tips When Applying For A Credit Card Account In Hong Kong

5 tips when applying for a credit card

Using a credit card should not be done lightly. It is tempting to use it and overspend because it feels like an extension of your wallet. Well, it is not. Do not give in to the temptation to overspend. You need to learn how to be a smart credit card user.

If you want to take care of your credit card account, you need to start by learning how to apply for the right card. Here are tips that you can use while filing your application.

Identify your spending preferences.

You need to start by analysing your spending habits. Where will you use your credit cards? This will give you a clue on the type of card that you will use. If you shop in a particular grocery chain and they have store credit cards, you may want to apply for it. You will be shopping here anyway. Why not set yourself up so you can receive loyalty points through your credit card account? In case your business gets you to travel all the time, you may want to get a card that will allow you to use it overseas without worrying about high currency charges.

Get to know the rewards program.

In line with knowing your spending preferences, you should also understand the rewards program of the card. According to InsideRetail.hk, only a few people understand their rewards program. If you do not know what it is, how can you maximize it for your benefit? Once you understand the rewards program, you will know which one you want to have on your card. Will cash back rewards be more beneficial for you? Or do you prefer to have air miles instead? You can also get discounts or loyalty points for your purchases. Your understanding of the rewards program of the credit card account that you will apply to will give you an idea of what you can get in return for using the card wisely.

Make sure you have a good credit score.

Before you apply for a credit card, it is highly encouraged that you have a high credit score first. This is the key to get a low-interest rate. If you want to lower the interest amount that you will pay after every payment, you need to have a good credit history first. This can be done through a good payment behaviour and by keeping your credit balance low. If you do not have a good score because your credit history is thin, that is okay. Just choose the credit card that has the lowest interest rate. Once you have more entries in your credit history, you can always negotiate with the issuer to lower your interest rate.

Scrutinize the fees and read the fine print.

The study discussed in the article of the Inside Retail website revealed that 9 out of 10 card holders do not understand their terms. Apparently, those who understand the terms of their card are more satisfied with their cards. You need to read the fine print because this will help you maximize the benefits of your card and you will save more every time you use it. You get to understand the rewards and avoid the fees and charges that will cost you money unnecessarily.

Compare credit cards.

Finally, you need to compare before you make a decision on the final credit card account that you will get. Do not concentrate on the interest rate. Make sure you understand the fees. As mentioned, read the fine print. One company may have lower interest rates and at the same time, charge you with high annual fees. Compare everything about the card to ensure that you will choose the one that will satisfy your spending preferences.

Rules that will make you a smart credit card holder

The study conducted by JD Power, as published on the Inside Retail website, revealed that Hong Kong card holders are actually very responsible with their payments. This is despite the fact that they are not too keen on understanding the fine print of the card. This is a practice that has to be improved. If you want to be a smart credit card user, you have to follow these rules.

  • Budget your credit card spending. This will keep you from overspending. If you put your spending in your budget plan, you can set a limit as to how much you can purchase through your credit card account.
  • Pay the card in full before the end of the grace period. Do not stick to the minimum because that will cost you a lot in the long run. Pay in full and within the grace period – which is the time between the purchase and the due date of your credit card billing. If you pay within this time frame, you do not have to worry about the finance charges.
  • Avoid using the credit card cash advance – unless it is your last resort. This will really cost you a lot in terms of the interest rate. Not only that, you will not benefit from the grace period – that means the cash advance will accrue interest immediately.

Your credit card account can help you make the most out of every purchase – but at the same time, it can also lead you to accumulate too much debt. The effect of your credit card will depend on how you use it – so make sure you know how to use it wisely.

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