Give me some credit

Real men listen to women when it comes to spending their money. And I don’t just say this because this is what my wife wrote in our wedding vows. 

While on the run from credit card authorities after racking up a bill that was equivalent to the debt of a small African country, I had the pleasure of meeting up with Annette Tirol — head of HSBC’s Personal Financial Services — during an HSBC-sponsored coffee and conversations talk.

During the coffee break, I asked Annette the tough financial questions that I was too scared to ask my wife: in a marriage, who should handle the finances — the one with more or less chest hair? How many credit cards should one have to live life comfortably while on the run? And probably the most mind-boggling finance question of all time: Can you pay for a credit card bill with a credit card?

Credit where credit is due

RJ LEDESMA: The fate of single-salaried men with a semblance of a dating life relies on your answer to this question: in your professional financial opinion, who should pay the bill? The man or the woman?

ANNETTE TIROL: If they are officially dating, it should be the man.

Wait, so nowadays you can date unofficially but still get all the dating benefits? How does that work? Sort of like how we deal with Taiwan? 

I really wouldn’t know. I haven’t dated in a long time. (Laughs)

Since we are talking about making things official, where should a man make his largest financial investment when it comes to a relationship? Is it when his Facebook status says he’s “dating,” he’s “married” or he’s “complicated”? 

Siyempre dapat wife. (Laughs)

That was a trick question. 

But I look at it in terms of a banker: it’s about return on investment. You’ve made the investment, and the relationship grows to be profitable and fruitful. So you have to make sure that you are constantly re-investing and generating output.

I keep on wanting to re-invest in output, but my wife continually reminds me that she doesn’t want enough kids to field a football team. And for those of us blissfully happy men in the throes of domestic incarceration, who should be the one managing the household finances? Because if managing finances is a matter of who has more testosterone in our marriage, then my wife better do her job.

I don’t think it’s gender-specific. I think it’s more of aptitude-specific. With every couple, there is someone who has the stronger aptitude for managing and balancing finances while the other is more of the free spirit.

Is the free spirit the one who wants to invest our savings in a Justice League of America action figure collection? I know she hasn’t articulated it, but I am sure my wife wants it as badly as I do.

Just remember, you should always have something for yourself. It shouldn’t be that everything is communal. You should have some money for yourself. Having your own money gives you a sense of pride, and also a sense of self. But having your own money doesn’t necessarily mean that you should keep the money hidden from your partner.

Is this the type of “hidden” where your wife has traveled to the US 42 times and purchased several houses under her maiden name and you never knew about it?

I always tell couples that they should have three pots, and you should know how much each is earning and putting into these pots. One pot is for the money that will make your household function property. One pot is for the money that you want spend on your “dreams” as a couple. And one pot is for yourself.

I’m waiting for a leprechaun to bring me my pot.

Credit Risk

Sometimes your credit card makes you feel as rich as former military comptrollers, so you often spend beyond your means or become more of an impulse buyer. How do I curb these impulses where it doesn’t require the services of a pawnshop, guidance counseling or burlesque dancing on a primetime variety show?

You don’t really have to be from the credit card industry to know this, but even as a consumer you should not buy anything on impulse. Step outside of the situation. Walk around the block. If it’s really for you, you will get it. Don’t be fooled by sales. Just because there’s a sale, it doesn’t mean you have to buy a lot more than what you actually need.

You mean I didn’t need leg warmers, a self-flushing toilet and hair removal wax?

You have to ask yourself these questions: “Do I really need it?” or “How many times will I use it?” There are some impulse purchases that exist in our lives, but they should be timed for when you can really afford it.

Can’t I time it for when I win the lotto?

Having said that, you should always have a view that you can pay off your card in 30 to 60 days. For example, if you want to get your wife a nice gift on your credit card, you need to know two things: how much you spend per month and if you have a little extra put aside to pay for the gift. Sometimes, your cash flow for the month might not be enough. But if you know that you will be receiving a bonus next month, then you know you can pay off the gift. However, if that bonus is still coming in December but you are spending in June, it wouldn’t be wise to make that purchase.

Looks like my wife will have to settle for hair removal wax until I get my Christmas bonus from the Philippine STAR. Are there purchases that are best made on a credit card, in cash, or with a pound of flesh? 

Most purchases are good to make on card if — like I mentioned earlier — you have the money to pay for it or if you know your budget.

Aren’t there some things man was never meant to know? That’s why my wife never tells me how much we have in our savings account.

Spending on your credit card has to have a budget. Remember, your credit card is very different from your credit limit. Let’s say your credit limit is P100,000 but what you can only pay for every month is P5,000. If you go over P5,000 on your credit card in a month, you should know exactly what you can use to pay for that expense.

So you shouldn’t live life to the limit? I have been deluded by all these self-help slogans. How about when you pay for your credit card bill? Should you always pay it in full, should you only pay the minimum, or should you wait until that leprechaun brings you that pot of gold?

Try to always pay the lump sum. You shouldn’t ever have to open your statement and be surprised by the amount.

Don’t you like surprises?

This means something went wrong with your budgeting. And if you are only paying higher than the minimum, it should be because you know that a bonus is probably coming your way in about two months so you can wipe out your debt.

And if you can’t expect a bonus in the next two months, then the next best thing is to pray that every day is Groundhog Day. What are the consequences if you just pay for the minimum bill on your credit card?

You are paying for a very long time. You will feel that it is never coming down.

DOM chuwariwap (sidekick): And that’s a bad thing?

Aha! Can you pay your credit card bill with another credit card?

What you can do is a balance transfer. If you feel that another credit card offers you a means of paying your balance in a more affordable manner that matches your cash flow, then you can actually transfer your balance. You can pay a specific amount every month that matches your cash flow. What you shouldn’t do is continue to hop across credit cards. It is tantamount to being promiscuous. It will come back to haunt you one day.

DOM chuwariwap: No wonder that last credit card gave me herpes. 

What you shouldn’t allow is your debt to just run on because that isn’t healthy. The card is supposed to help you get through periods of low cash flow. It isn’t supposed to be a perpetual loan.

Wait! So you are saying that my credit card is different than my ATM? Then why are they the same size and have my name embossed on them? Oh, credit gods, you have been toying with me! Argh… Will it appease the credit gods then if I have multiple credit cards?

Ideally, you should have two credit cards.

(RJ squeals like an adolescent girl in a Justin Bieber concert.)

But only if you know how to properly manage your finances.

(RJ squeals like a straight man in a Saudi prison.)

There could be different reasons. Some cards are used to make purchases solely for the Internet while others have a supplementary card for their kids. But having one is dangerous, because let’s say that you are somewhere and for some reason you don’t have enough cash and for some reason that card is not working. 

You never know the whims and caprices of these credit gods. And what if you can no longer pay your credit card bill? Say you lost your job as a government comptroller or a deputy ombudsman or something. How do you pay off your debt? With hard labor? With incessant wailing? With a vital organ?

I don’t think they’ll take the organs. (Laughs) Most financial institutions have a mechanism. If you can’t pay, you will obviously have someone call you from that institution. And while you are in discussion with them, you have to be honest.

You mean I can’t invoke my right to self-incrimination?

What you shouldn’t do is not talk to the collections person. Your dialogue with him can spark the whole discussion as to the entire amount that you can afford to pay and how you can work towards paying off the debt. But that discussion has to happen. Just because you don’t want to talk, it doesn’t mean the problem won’t go away. When you fail to pay, it will creates a credit imprint that will forever be on you record.

Annette, I have a self-flushing toilet that you might want to take off my hands.