leolion | 3 tháng trước | 3 min read

Why I Use Credit Cards

The 3 main credit cards I use Why I use credit cards I use credit cards as a source of funds to rotate cash for spending, like borrowing money from the bank for free for 30 days.

Why I use credit cards

I use credit cards as a source of funds to rotate cash for spending, like borrowing money from the bank for free for 30 days. However, I keep very tight control over the total spending on each card and what type of spending goes on which card in order to get the best possible benefit, because these cards charge an annual fee ranging from a few hundred thousand to several million VND.

The essence of a credit card is that it lets you borrow money interest-free for 45 days from the transaction date (not from the statement date).

Many people don’t understand how credit cards work and often fall into two issues:

They think it’s 45 days interest-free so they spend comfortably; when the statement comes, they still assume they have another full 45 days and wait until next month’s salary to pay it off. Interest is accrued daily from the date it starts and it can become a lot over 30 days.
They assume all cards are the same and just swipe any card, but in reality, if you optimize cashback, the refunded amount each month can be around 200–300k VND for me, which is significant, since my annual card maintenance fee is about 1.5 million. Having this cashback to offset those fees is very helpful.

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There’s a little trick: each time your card is up for renewal, you can call and threaten to cancel the card; they will often offer to let you keep the card by waiving that year’s fee. They refund it to you (Citibank is about 770k/year) as a credit to your card.

How do I assign different cards to different types of income and expenses?

Citibank => Eating out, movies, shopping malls

6% cashback on spending at Grab (Food, Rides & Delivery) and CGV
4% cashback on insurance spending
2% cashback on spending at shopping malls and fashion stores
0.3% cashback on other spending
Foreign transaction fee: 4% of the transaction amount (the highest)

=> Prioritize using this card for shopping and dining
=> Prioritize using it for Grab and entertainment services

HSBC => Groceries, supermarkets, convenience stores

Annual fee waived for 3 years

8% cashback on transactions at supermarkets and convenience stores
1% cashback on tuition fee payments
Unlimited 0.5% cashback on all other transactions

Foreign transaction fee: 3.25% of the transaction amount

=> Use HSBC to shop on Tiki
=> Use it for Lazada, Shopee purchases

SC => Miscellaneous expenses

Annual fee waived for 3 years

0.6% cashback on all domestic transactions (1 point per 25k VND). 1.8% on international transactions (3 points per 25k VND)
Travel spending earns 3x points per 25k VND
Spending in any currency other than VND is considered an international transaction
Foreign transaction fee is 3.5%. After deducting the 1.8% cashback, the net cost is 1.7%.

=> Prioritize for international e-commerce payments
=> Use for transactions incurred in foreign currencies, such as bills for international services

Refer to this detailed table of cashback locations for credit cards

I hope these initial thoughts help you form a new mindset about optimizing your credit card spending so you can use them effectively, get the most benefit for yourself, and avoid going into debt from overspending.