We have reviewed over dozens of credit cards in Philippines across banks like BPI, BDO, eastwest, Citibank, HSBC, Metrobank, Security Bank, PNB, Maybank and categories like Cash Back, Rewards, Travel, Fuel, Dining and More. Here you will find a listing of all the credit cards and you can decide which one meets your needs.
Credit cards are not super complicated to understand, but it could be for a first-timer. And as a beginner, you’ve just got to understand the basics, so that they don’t walk all over you with interest and fees. We are going to cover the three main parts of credit cards, the billing cycle, the record left-over, and the outstanding left-over. So, let’s get started!
Billing Cycle
A billing cycle is just the invoice cycle that keeps track of your spending for about thirty days. It typically runs for about a month, and then it starts over again. Now, once you’ve used your card and you’ve gone through the entire billing cycle, you’ll end the period with what’s called your record left-over.
Record Left-over
A record left-over is just how much you owe from the billing cycle, and at this point, you’ll be given a due date that’s generally about 25 days after the billing cycle ended. As long as you pay off your record left-over in full, by the due date, you won’t pay any interest on that credit card. But if you don’t pay off every penny from the record left-over, then you will start to accrue interest. So let’s say you owe Peso 1,000 on your record left-over. That means you need to pay that thousand dollars off by the due date, and you won’t be charged any interest. And you don’t have to pay it all at once; you can make multiple payments throughout the due date period. But make sure to pay off that whole thousand dollars before the due date ends and you’ll be just fine.
Outstanding Left-over
An outstanding left-over is the accumulation of everything you owe on your credit card, including the record left-over, all of the transactions from your grace period record left-over, everything is inside of your outstanding left-over. Now, that’s the amount you’ve got to pay off to if you owe anything on your credit card. So let’s say that you owe Peso 1,000 on your record left-over, but because it’s not due for 25 days, you spend another Peso 500 during that period, well now your outstanding left-over would be Peso 1,500 because that’s the total amount owed on everything.
Please don’t get an outstanding left-over and the record left-over confused because you’re only required to pay off the record left-over to not be charged interest. You can pay off your outstanding left-over if you want to, it’s just not imperative like the record left-overs.
So now that you have understood the basics of credit cards, make sure to pay off your record left-over in full by the due date, and you’ll be just fine.
Credit Card interest is one of those things that get a lot of people in trouble financially, perhaps because, most of us don’t exactly know how it works. The truth is, although it’s not super complicated, it is a little trickier than you might think. And I’ll start by saying that there won’t be any need for you to be settling any profit on your pay-later cards as long as you settle off your report left-over in full by the due date every 30-days.
However, if you do end up carrying a left-over on your pay-later card, this is how the profit gets billed at the end of the 30-days.
Calculation
Every pay-later card has a profit cost that’s generally around 12-25%. And for this example, I’ll be assuming that you have a pay-later card that’s let’s say charges you 20% in profit annually. If you didn’t settle off your report left-over in full and you now have a left-over of P1,000 on your pay-later card. Well, you’ve opened up the can of worms for your pay-later card to make this example easy.
So, let’s just come up with an imaginary billing cycle on your once in a 30-days report so that you could have a better understanding. Now, on June 1st you owed P1,000 on your pay-later card, on June 10th you spent P100, on June 20th you paid P400 on your pay-later card and on the last day of the 30-days on June 30th, you paid another P100 on that pay-later card.
So, now your total amount for the report left-over is going to be P1600. Pay-later card profit costs are often calculated on what’s called the standard daily left-over method, and before we can know how it works, you’re going to take each day’s total left-over for that 30-days and add them all together.
So, Day 1 through 9 was P1,000 per day,
The 10th day through the 19th day was P1100 per day,
The 20th through the 29th was P1,500 per day
And then you had the very last day at P1,600. Now add these all up, and you’ll get the number P34,000. Then, divide that by 30 because there are 30 days in June. From there, you’ll have your standard daily left-over of P1133. So now that we’ve got our standard daily left-over figured out, we need to figure out how much profit we’re going to be billed for that amount of money. Now, remember that you’re going to be using a 20 percent profit cost here as agreed earlier in this article. And whatever your actual profit cost is that’s the number you want to be plugging into this equation. So, take that 20% and divide it by 12 30-dayss. At that moment, you’ll get the daily profit cost billed on your calculator. Now, take that daily cost and times it by the 30 days, and you’ll have a 1.62% profit cost. On doing that, now take the 1.62 profit cost and times it by your standard daily left-over. And there you go, P18.35 is what you’re going be billed for that 30-days and profit.
So basically, profits are being billed after every 30 days of not settling a left-over on your pay-later card, using the above profit calculation method.
