As diverse as the Philippines’s payments environment has become, credit cards are currently having a moment—fast gaining popularity among a set of upwardly mobile shoppers. While paying with plastic isn’t new in the country, a current crop of rewards-based options has made credit cards a go-to for sophisticated consumers interested in maximizing their incomes.
These new rewards cards offer a range of benefits that go beyond mere convenience. They provide valuable credit card points, simplify expense tracking, and are arguably more secure than carrying cash. Importantly for anyone who wants to buy a home or start a business, proper card usage can also contribute to building a good credit score.
The popularity of these rewards-based credit cards has surged as more people recognize the potential to maximize both their incomes and spending. Additionally, credit card advocates often cite the immense potential of cashback, travel points, and special perks, if used wisely. Here is how your credit card points and cashback rewards can be redeemed for the best possible lifestyle impacts:
1. Get Cashback on Everyday Purchases
Cashback rewards are a straightforward way to get money back on your purchases. For instance, credit cards connected to shopping clubs may let you earn guaranteed cashback on groceries, dining, or other everyday expenses, making the card a cheaper way to buy compared to cash. As an example, the Landers Cashback Everywhere credit card lets you earn up to 5% cashback at Landers Superstore once you reach certain thresholds, 2% cashback on dining spends, and 1% cashback on all other eligible purchases. Over time, even small cashback amounts add up, effectively saving you money on purchases you would have made regardless.
2. Redeem Points for Travel Perks
Credit cards are becoming especially popular among Filipino travelers as a way to easily buy things when they’re traveling. If this sounds like something you’re interested in, you can get a credit card that gives points for travel-related expenses as well as partnerships with major hotel chains or airlines. Having a card to cover these travel expenses can bring down the cost of your next vacation and give you access to better accommodations, giving you a much better experience overall.
3. Exchange Points for Gift Cards
Some card issuers let you redeem points for gift cards or vouchers at popular retailers, supermarkets, restaurants, and online stores, usually at more favorable rates to encourage usage. While there are often some restrictions on which gifts you can enjoy, they’re nonetheless a great way to treat yourself and your loved ones without directly spending your own money.
4. Invest in New Experiences
Some lifestyle-oriented credit cards offer the option to redeem points for concert tickets, special events, or travel packages. These reward types are especially compelling, especially with research that suggests consumers are happier when spending on experiential versus material purchases. While a brand-new gadget can make you temporarily happy, the happiness from experiences tends to last much longer. This makes these experience-related rewards well worth considering.
5. Pay Off Your Credit Card Bill
Most of the time, cashback rewards are issued as cash credits, which you can spend on practically anything. One responsible way to use these rewards is to pay off your credit card statement. Some credit cards may even allow you to use your points or cashback to directly pay off your outstanding balance. In either case, using rewards to cover your credit card bill can be an outstanding win-win way to reduce your debt without having to look for new sources of cash.
6. Cover Your Card’s Annual Fees
Aside from covering your monthly statements, some credit cards also allow you to use cashback or points to cover the annual fee. If your cards come with annual fees, this can be a great way to offset the cost of maintaining a premium card.
To better maximize your rewards, however, you’ll want to use a card that can realistically offer more value in redeemable rewards than its associated fees. Thankfully, a growing number of Philippine credit card providers are offering rewards cards with no annual fees, making them a great option for those interested in using cards as a financial tool.
7. Make Charitable Donations
Similarly, most consumers report positive feelings when they donate to a charity or a cause they support. In most cases, you can simply redeem your cashback rewards to do this. However, a few credit card programs also allow you to donate your points directly to charity. If you can’t decide on how to spend your points, making a donation may be a financially responsible way to make a positive impact on causes you care about.
8. Upgrade Your Tech
Whether you’re a tech enthusiast or simply need a new computer to do your job better, electronics purchases can often be a serious drain on one’s finances. Luckily, some credit card providers have partnerships with electronics retailers, allowing you to redeem points for freebies or discounts on the latest gadgets. Whether it’s a new smartphone or home appliance, using your rewards for tech-related spending can be a smart move.
9. Save for Special Occasions
Lastly, you can consider your accumulated points or cashback as similar to a special savings account that you will use only to cover a specific big-ticket purchase. Using your rewards in this way should help you reduce the financial impact on your budget while still enjoying the basic convenience benefits of your card.
Leverage Your Credit Card Rewards for a Life Well Lived
Credit card points and cashback rewards give you more ways to enhance your lifestyle and even contribute to meaningful causes without negatively impacting your income. Once you learn to use these rewards effectively, you can make every purchase work harder for you and thus be closer to the quality of life you deserve.
