Choosing a credit card for newly-weds can be simple – and yet hard at the same time. This is not something that you should rush into. This is especially true if you will apply for a card that the two of you can use.
While you may still be feeling emotionally high after your recent nuptial celebrations, it is important that you put that euphoria aside. You have to talk to your husband about the type of credit card that that two of you should apply for. This is the start of a great life and you should make a habit of making joint decisions on everything. This is especially true when you are dealing with your finances.
In Hong Kong, it is a common practice to make purchases through credit cards. When you were single, choosing a credit card was simple because you only had to think about yourself. Now, there are two of you in the picture. You need to consider what is best for the both of you – even if it is just in choosing the right card that you will use for your household expenses.
Great credit cards for newly-weds
There are two types of credit cards that you may want to apply for as a couple;
Balance transfer cards
This is a card that can consolidate any debt that you incurred while spending on your wedding and honeymoon. According to a survey done by MasterCard, Hongkongers usually spend an average of HK$12,895 per person on their card. That means it is possible for you to spend HK$25,000 on your honeymoon. A balance transfer card is usually offered at a very low-interest rate. If your current card has an APR of 35%, the low rate will make you save a lot of money. By transferring your other credit card balances, you may be asked to pay 3% of the transferred balance or HK$65 – whichever is higher.
This is nothing compared to the savings you will get when you have 0% interest on the HK$25,000 debt that you incurred during the honeymoon. Just make sure that you will pay down this debt aggressively after transferring it. The Citibank Balance Transfer Program will allow you to enjoy a low annual rate – only around 5.8% for the first 6 months. After that, the rates will be higher.
China Construction Bank is also another bank that offers a specific Balance Transfer Program – giving you as much as 12% off on the current interest rate. It also allows you to loan up to 21x your monthly salary – or up to HK$1.2 million (whatever is lower).
There are other cards that can accept balance transfer – make sure you consider the interest rate and the terms that they will give you.
Another type of credit card for newly-weds is a rewards card. The truth is, all credit cards in Hong Kong offer some form of reward. It can be in the form of Air Miles, a cash reward, discounts, etc. Make sure that you will choose a card that suits the spending lifestyle that the two of you have.
For instance, if you both love to travel, a credit card that converts purchases to Air Miles is the best card for you. The American Express Cathay Pacific Elite Credit Card allows you to enjoy 2,500 Asia Miles. You can also enjoy priority redemption when it comes to discounted flight bookings and travel protection too. They offer 77,500 Asia Miles as a welcome offer and can waive the first year annual fee. This will help you save a lot of money as you travel around the world as a couple.
If you feel like you will benefit from cash rewards, then that is they type of card that you should apply to. For instance, the American Express I.T. Cashback Card offers 1% cashback on all purchases – regardless if done locally or abroad. You can also get as much as HK$400 if you spend HK$48,000 or HK$1,000 with a HK$98,000 and above spending in the previous year. The more you use your card, the better it would be for your cashback rewards.
Choosing a credit card that will be used around the house is a great way to practice and gauge the similarities and differences that you have when it comes to your finances. While you may not agree on everything, having an open mind and respecting your differences will help you choose based on what is best for the both of you.
Credit card rules you need to implement to avoid arguments about money
Once you have chosen the best credit card for newly-weds, it is now the time for you to set the ground rules about its use. Generally, Hongkongers are great at managing their finances – specifically their credit cards. But that does not mean they are not struggling financially. According to the article from Financial Times, young couples are forced to live apart because of financial constraints – specifically when it comes to a house. Buying a property in Hong Kong is not easy because it is quite expensive. They have to live with their parents while they are still saving up to buy their own house.
This is why you need to be careful how you use your credit card. This is a high-interest debt – at least if you let it grow unpaid. You have to talk about how you will use the credit card and pay for it.
Here are some tips that will help you make this happen:
- Make time to talk about it. This is not something that only one person can decide on. It has to be the two of you. Set a date to specifically talk about how you will use your credit card. You can talk about other financial matters too like who gets to save up for the deposit of the house or for the future kids that you will both have. If you are living with your parents like the ones mentioned in the article, take advantage of the savings that you will get.
- Set a limit. If you will both use the credit card, make sure you have a monthly spending limit. For instance, you are only allowed to spend HK$5,000 each month on the card. In case this proves to be too high or too low, discuss a reasonable amount that you can live with. If this card will be used for purchases that will benefit the household, you can discuss the limitations as well. If a purchase must be made that exeeds the limit set on that card, discuss this with the other first.
- Decide on how this will be paid. Will you pay for the billing through a joint bank account regardless of how much each of you spent? Or will you pay according to the amount that was charged on the card?
- Practice honesty. It is important, to be honest about your finances at all times. You need to show the statement from the credit card company when it arrives. If one of you went beyond the limit, discuss this, understand your spouse, and forgive if there was a mistake committed.
A credit card for newly-weds is a great practice ground for more important financial decisions in the future. If you learn how to discuss your finances with an open mind, you can make better decisions when you plan to buy a house or a car. Just remember that the key to any marriage is communication and honesty. If you can implement this in your finances, you will be on the right track in your relationship.Recommend0 recommendationsPublished in