The indicators shows more and more people are using their credit cards and this is a positive sign for economic activity. However, the grim side of it is that there is also a 3% increase in the number of people defaulting in their payments. See related news below I took out from BizLINK of Philippine Daily Inquirer.
Are you one of them? Do you have troubles coping up with your plastic money expenditures? Are you heavily indebted that your payment is taken from another credit card loan? Or are you one of us who have credit cards but are able to maximize its usefulness? Do you have credit card debts but is able to stay happy?
We were in the same pit some years back. But with discipline and financial literacy which we have acquired from Bro Bo's Truly Rich Coaching Seminar, and a series of free seminars at International Marketing Group Makati Office, we were able to get out of the sad predicament of having credit card debts which even ballooned to over a million pesos. So how did we do it?
First, we changed our spending habits by strictly monitoring our cash flow. Then, we consolidated our debts and eliminated some of our credit cards. We reduced it from 7 different bank providers to 2. Then we pay up our credit not based on what is minimum required. This is actually the credit card debt trap. They put in bold numbers the MINIMUM REQUIRED PAYMENT which if you follow will make sure you do not get out of debt.
Since we are paying in advance and more than what is required, we also negotiated for none payment of annual dues on the credit cards we retained.
Now, we are debt free and we make sure that we pay the dues before due date. We not only maximize the convenience , but we also enjoy perks like having to accumulate points which we exchange for some needed items in the house. We also got to enjoy some freebies that credit card providers gives to its users. Like having to eat for free in a fast food chain using the points we accumulate.
If you want to be coached, trained on how to be debt free... please respond to this blog or send me an email. I will be more than happy to respond and help you.
Now indeed, we are glad we have a credit card and we stay happy!
I hope you do too!
God bless!
Banks’ credit-card receivables up 3% to P134B
BizLINK
Defaults rise to 13.5% of total borrowings
By Michelle Remo
Philippine Daily Inquirer
First Posted 21:45:00 01/06/2011
Filed Under: Economy and Business and Finance, business
MANILA, Philippines—Credit-card spending rose anew in the third quarter of 2010. This, according to regulators, helped keep the consumption level high enough to help boost economic growth.
According to the Bangko Sentral ng Pilipinas, the outstanding credit card receivables of universal, commercial and thrift banks as of end-September 2010 amounted to P134 billion, up by nearly 3 percent from P130.2 billion in the same period the previous year.
The BSP said bank loans in the form of credit-card receivables accounted for nearly 5 percent of the total loans extended by universal and commercial banks.
Central bank officials said the continued rise in consumption provided good prospects for a sustained economic growth. They said consumer spending was one of the major drivers of economic growth.
As credit-card spending rose, defaults by “plastic money” holders also increased. The BSP said non-performing credit-card loans to total credit-card receivables ratio remained in the double-digit territory. It even increased year on year to 13.5 percent from 12.8 percent.
Loans are considered non-performing if they remain unpaid at least 30 days after maturity.
The latest non-performing credit-card receivables ratio was much higher than the total non-performing loans-to-total loans ratio posted by banks of only about 4 percent.
Analysts said this was an indication that credit-card holders were more likely to default on their obligations compared with other types of borrowers.
Also, non-performing credit-card receivables accounted for 13 percent of the total non-performing loans that the banks were exposed to. This was higher than the 12.3 percent recorded as of September 2009.
In view of the rising credit-card receivables of banks, the central bank last month issued tighter rules governing credit-card issuance.
The BSP earlier prohibited banks from issuing pre-approved credit cards.
Pre-approved credit cards are usually sent to target clients through regular mail or courier service.
The new guidelines also imposed tighter disclosure requirements. Banks are now required to present a table of credit-card transactions with the applicable interests and penalties in the billing statements issued to customers.
Cardholders should also be reminded constantly in the billing statements that payment of the minimum amount due, or any amount lower than the total amount due, for a billing cycle would result in the imposition of interest and other chargers.
According to regulators, some cardholders do not know how interests and other charges were computed. They are not aware that paying less than the total amount every month can result in the building up of interests and other charges on the balance, they added.
Some people who are not aware of how interests and penalties are charged on credit card borrowings tend to spend more than they can afford to pay using their “plastic money.”
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