Revolving credit, which involves products like credit cards and personal lines of credit, is a type of loan
that allows you to borrow, repay, and borrow again up to a set credit limit. Unlike installment loans,
where you borrow a fixed amount and repay it in scheduled payments, a revolving credit line offers
much more flexibility to the borrower. If you’re eligible for it, you can use it as needed and simply repay
based on your current financial situation. Your ability to do so can be especially helpful in many
situations, such as when you need to cover unexpected expenses or address temporary cash flow issues.
Indeed, revolving credit lines promise flexibility and convenience, and with the increasing availability of
credit line and easy credit card approval promos, Filipinos’ access to revolving credit has never been
better. Maya users, for example, can easily apply for the Maya Easy Credit program, which allows them
to borrow up to PHP 30,000 in just a few steps.
But anyone who wants to be able to use revolving credit should commit to managing it wisely. Here are
some practical strategies for managing your revolving credit without falling into debt traps:
1) Borrow Only What You Need
One of the most common mistakes people make when using revolving credit is borrowing more than
they actually need. Since the credit is readily available, it can be tempting to spend up to your limit, but
doing so increases the risk of falling into a debt cycle where you keep spending more than what you can
easily repay. With this in mind, it’s essential to exercise self-discipline and borrow only what you truly
need.
2) Always Read the Fine Print
Before using any revolving credit product, take the time to read and understand the terms and
conditions–paying particularly close attention to the interest rates, service fees, penalties for late
payments, and grace periods. This step is crucial because the fine print often contains important details
that could affect your repayment obligations.
For example, some credit cards may offer a low promotional interest rate for the first few months, but
that rate could increase significantly after the promotional period ends. If you’re not aware of this, you
might be caught off guard by a sudden spike in your monthly payments. It is best to learn the terms
upfront so that you can avoid unpleasant surprises and manage your revolving credit more effectively.\
3) Aim to Pay Off Balances and Service Fees Quickly
Carrying a balance on your revolving credit line can be costly because you’ll be charged interest on the
remaining amount. To minimize these costs, it’s best to pay off your balance in full each month. If that’s
not possible, try to pay more than the minimum due to reduce the interest charges and shorten the
time it takes to repay your debt.
If you have a credit card balance of PHP 10,000, for instance, and you only pay the minimum amount
due each month, it could take some time to pay off the balance, and you’ll also end up paying a lot more
in interest than the original amount you borrowed. Actively plan to pay more than the minimum so that
you can become debt-free faster.
4) Set Up Payment Reminders
Commit to paying off your balance on time if you have a revolving credit line. Failing to do so can have
serious consequences on your financial well-being, including late fees, steep interest rates, and damage
to your credit score.
Set up payment reminders that will keep you on track with your due dates. You can use your phone’s
calendar app or handwritten reminders–whichever one is more effective for you.
5) Avoid Using Revolving Credit for Non-Essential Purchases
One of the biggest risks of having access to revolving credit is the temptation to use it for impulse
purchases. But this kind of spending is precisely what leads to a growing balance that’s difficult to repay.
The best way to avoid this is to limit the use of your revolving credit to necessary or emergency
expenses. Before making a purchase, ask yourself if it’s something you really need or if it can wait until
you have enough cash. Practicing mindful spending will help you stay within your budget and avoid
unnecessary debt.
6) Seek Financial Advice When Necessary
If you find yourself struggling to keep up with your payments, don’t wait until the situation worsens.
Many lenders offer options, such as restructuring the debt or setting up a more manageable payment
plan, for borrowers who are facing financial difficulties. If ever you find yourself in these tough
situations, contact your lender as soon as possible to discuss these options.
You can also seek assistance from credit counseling or debt management programs, which can guide
you on how to regain control of your finances. Remember, there’s no shame in asking for help—it’s a
proactive step towards financial recovery.
Revolving credit can be a valuable resource for your finances, but if you don’t want to fall into a debt
trap, you should be careful about both your spending and your repayments. In the long run, responsible
credit management will help you take care of your needs while still being on track towards achieving
greater financial stability. Treat revolving credit not as free money, but as a means to enhance your
financial well-being—both now and in the future.
