Credit Card - The 2nd best C
Credit card got to be the 2nd best out of the 5Cs.
Cash is the best C of all. (Obvious right?)
Car, Condo and Country Club are just liabilities.
The reason why I applied for HSBC credit card recently is because more and more places are giving discount when you make payment using HSBC credit card. To me, a credit card is like a discount card and a reward card. If I have to pay for the dinner or the item I'm going to buy, why not earn something in return? I always check if there is any discount for credit card at restaurants. And I always try to make payment using credit card to gain points.
Recently, I used my credit card points to exchange for a bag pack. That bag cost around $80, and I got it free because I'm always using credit card for payment.
I always recommend my friends to apply credit cards from Citibank and UOB. There are a lot of places that give discount for using those 2 cards. Recently, I notice that HSBC been giving discounts at many places too. That is why I applied for it. Oh ya, you can get $1 off GV movie ticket when you pay using HSBC card. I just did it today and save $2. :)
Some people might think that Credit Card is also a liability because of the annual fee. But annual fee can always be waived. Remember, the bank want you to have the credit card and they want you to spend with the credit card. This is because the bank earns a small percentage from the merchants when you use the credit card.
But credit card can be dangerous if you are not careful with it. Remember, never buy something with your credit card if you can't afford to pay when the bill comes. Never ever land yourself into credit card debt just because you can't control your spending. I've seen many friends landing themselves into trouble because of credit card.
Still remember a internet friend whom was quite close to me. She is those type who cannot control her spending. As a result, she couldn't pay the credit card company when her bills comes. To make the matter worst, when credit card A was due, she use credit card B to pay the bills. When B is due, she use A to pay. I've lost contact with her for almost 4 years already. Last heard that she was declared bankrupt. After she gone bankrupt, she cancelled her internet and handphone. We lost contact ever since.
Credit cards, if use wisely, can be a good leverage.
I always advice my friends to get a credit card from Citibank and UOB when they reached the income level. (Maybe HSBC too) It is a useful discount and reward card. After getting the credit card, do not overspend. Just spend as per normal. For those who find it hard to track their spending, the easiest way is to put aside the amount they spend on their credit card until the bill comes. This way, you will know when you overspend.
Remember, you can be a master of the credit card, or become its slave.