Future-proofing your finances: Why it's time to master your credit

Young adults in their early twenties often joke about being “broke” or avoid checking their accounts after a shopping spree.

- BY GABRIELL CHRISTEL GALANG

But avoiding financial responsibility is not forever. As more of the new generation starts earning, it's time to take personal finance seriously, and that starts with understanding credit.

In today's digital age, as access to online payment tools becomes more widespread, some Filipinos are more inclined to use e-wallets than credit products. Beyond simple digital transactions, many are also leaning towards alternative financing options such as installments, personal loans, and buy-now-pay-later (BNPL) schemes. But credit, despite being a flexible financial option for consumers to manage expenses, is often overlooked.

What many may not realize is that credit comes with a score. Unlike BNPL or short-term installments, credit contributes to one's financial health, which could soon translate to bigger financing, such as saving up for a home, a trip abroad, or even starting a business.

Miguel, a 24-year-old account manager, has been working for two years since graduating from college. During that time, he has been using his credit card for daily expenses instead of frequently relying on e-wallets for ride-hailing apps and food delivery.

"I use my credit card as my 'spending card', so any transaction that can be bought with a credit card, I will use it," he said in an interview.

"As soon as you build responsible financial habits and build your financial literacy to a decent point, then it's the best time to start building your credit, so in the future, if there is an emergency or a big purchase you want to buy, your bank will trust you," Miguel shared.

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