Convenience vs credit

You don't feel it, but credit cards are hungry little monsters that can eat all the bills in your wallet. How? When you let the lines blur between smart shopping and impulse buying, you make yourself vulnerable to financial disaster (ok, too much utang at least).

Credit cards are credit cards for a reason: they allow consumers to spend more than what they have on hand. Smart credit shopping differs from impulse buying in this way: a smart shopper uses the credit card for convenience, not credit.

For example, you get a phone bill, an electric bill, and a water bill every month. Instead of going to three different places, you can enroll them in your credit card and have them all in one paper. (Better pay off the whole amount in one go to avoid huge interests!) That's convenience.

Some comments on "convenience":

• Convenience is not finding a dress on sale and swiping the card because you don't have enough cash on hand.
• Convenience is not using your credit card to pay for your birthday blowout just because it's such a troublesome task to list down what you need and create a budget.

When you spend like this and find that you can't pay them off in one go, you'll see that you're actually spending more on credit card interest than you are receiving interest on your savings account. If you continue to plod on this way, don't be surprised when the cash you've worked hard for simply dwindles down to zero! Not fair, but that's life.

Smart shopping is about spending within your means, so don't fall into the credit card trap of thinking that a credit line increases your spending capacity. Remember, you can only spend as much as you earn, and you can only save as much as you keep.

Happy saving!