• A Complete Guide to Credit Cards in the Philippines

    A credit card is a secure mode of spending, provided you use it wisely. You must repay what you borrow every month. It can be used to buy different things like gadgets, clothing, food, etc. May it be going for a movie with a friend or taking your family out on dinner, a credit card can always come in handy. But you must remember that it is money that a bank is lending you. So, returning the money on time is of utmost importance. The payments can be made in full or by monthly installments.

    Why should someone apply for a credit card?

    Credit cards are extremely convenient to use. When you have a credit card, you can purchase what you want instantly. You do not really have to wait, raise enough funds and then buy it. There are different types of credit cards that are designed as per the spending habits, requirements and needs of the customers. Some accumulate rewards points or cash back whereas others offer discounts on fuel recharge, grocery shopping, etc. Filipinos also look at a credit card as an emergency backup for funds. Thus, they apply for it to tackle situations like illnesses, accidents or other unexpected health issues.

    How to use a credit card?

    Using a credit card is really simple. Consider that you want to purchase a particular product from a merchant outlet. So, choose the thing that you want to buy and give the cashier your card. The cashier would then make your payment final by swiping it on the card machine and return the card along with a receipt. You must always check the amount that you were charged. Put your signature on the merchant’s copy and keep the customer’s copy with you. Ensure that you keep that copy safely, so that you can track your expenses easily.

    Online use of credit cards

    Even before you use a credit card to buy something online, you must first choose an authentic seller. There are so many fraudulent activities that happen on the internet and you must take precautions accordingly. Make sure the website URL is secure connection, that is, the link should start with https://. Check the monthly statement carefully and find out if it contains errors. You might find a transaction that was not authorized by you. You must inform the card issuer immediately, if that happens. Your card details should never be sent through mails to prevent malicious programs and hackers.

    Checkout safe usage of credit cards online while shopping guidelines.


    A credit card is a good option if you are planning to pay off the sum that you borrow every month. Also, you can make of the advantages of introductory periods that have very low or no interest applicable on the sum you borrow. However, if you have a sizable interest associated with your credit card and you don’t clear the debt on time, you will have to pay a big chunk as interest.

    Even if you are not clearing the entire amount every month, you should at least pay the minimum balance that is due. You can set up a direct debit option from your savings account and pay the dues, whenever there are any.

    If you keep clearing your debts on time, you will have a better credit rating. Banks like to offer loans or new credit cards to people who have good credit ratings. You will also be able to avail lower rates of interest when you have a good ratings.

    When you want to apply for a credit card, you must be at least 18 years old. Some banks have 21 years as their minimum age criteria.

    Applying for a credit card

    Research – You must understand your need for a credit card. Different people have specific requirements. Having a clear idea about your spending habit is of utmost importance. Some cards offer you great benefits for shopping. Some can help you accumulate air miles, rewards points or cash back. Some credit cards can help you to manage your business expenses. It is advisable that you prepare a set of questions that you need to ask the bank representative. There are several other things that you should look into before applying for a credit card. These include late payment charges, annual fees, promotional rates, 0 interest period and hidden charges, if any. Different banks have their own popular cards that may attract you. Study more about the details of these cards and analyse the advantages and disadvantages thoroughly.

    Background check for credit history – Banks prefer customers who pay their bills on time. So, it is always good to check your credit history. When the banks come to know that you have cleared all your internet bills, phone bills, etc. on time, and you also have a good credit score, then it will approve your application for the credit card easily. Your credit history will also include any loan amount that you borrowed in the past. Apart from these, the bank will see how old you are, your monthly earnings, etc. before it approves your application.

    Choosing a method to apply – After you are done choosing the right credit card for yourself and the card issuer, you should plan on how to apply for it. You may go to one of the closest branches of the bank you chose for the credit card and speak to a banker. However, the most popular way to apply for a card, nowadays, is looking them up on comparison portals.

    Ensure you submit all documents – There are several documents that are required by the bank when you apply for a credit card. Any flaw in these documents can lead to the rejection of your credit card application. In that case you will have deal with the hassle of reapplying. So, be extremely careful while filling up the application form and produce all the required documents at one go.

    Documents required for credit card application

    • Duly filled and signed application form
    • Photocopies of identification cards that are issued by the government

    For salaried employees

    • Recent payslips
    • Employment certificate
    • Proof of income tax returns

    For self-employed individuals

    • Photocopy of DTI / SEC registration
    • Financial statements from the bank
    • Proof of income tax returns

    For foreigners

    • ICR ( Immigration Certificate of Residence) is required
    • Philippine VISA

    Different types of credit cards

    Credit cards have different categories and some of them are mentioned below.

    Classic credit cards

    The classic credit cards are the ones that offer the users solution to their basic needs. They can be used as a source of emergency funds.

    Lifestyle credit cards

    These cards are specially designed for a particular group of people and they cater to all their needs and requirements. May it be a credit card that allows more benefits to be enjoyed with shopping or with petrol recharges, they all fall under the lifestyle category.

    Premium credit cards

    These credit cards are generally for people with high credit scores. The banks set a minimum income limit as an eligibility criteria for these credit cards. Usually, the cards are called Infinite, World or Platinum and are associated with higher charges than the other credit cards. One can accumulate points on these cards to redeem them for rewards later. Room upgrades in hotels, special gifts, travel advantages, etc. are some of the common benefits that these cards have to offer.

    Business credit card

    These credit cards are devised to meet the needs of businessmen. They come with benefits like cashback points and air mile benefits. The transactions can be easily tracked, giving the card holder full control on the cash flows related to his business.

    Different types of fees and charges

    Annual Percentage Rate – This is charged when the monthly bills of your credit card are not cleared by you in full. When you miss your due payment for a particular month, the balance moves to the next month. This results in you paying the interest accumulated on the outstanding balance. APR can shoot to 40 percent which will lead to hefty interest payments. It is better to clear the credit card bills in full every month.

    Balance Transfer Fees – If the rate of interest for your previous credit card is too high, you can choose to transfer your balance to the new credit card. This will allow you to reduce the rate of interest to a great extent. An approximate fee of 2 percent is applicable on the amount that you wish to transfer.

    Annual Fees – In order to enjoy the perks of your credit card, you must pay the annual fee every year. For some credit cards the annual fees are applicable for the initial one or two years, whereas, for other cards, it can be waived off by spending a minimum amount within a given period.

    There are more types of fees and charges that you must know of while applying for a credit card. Make sure you do a quantitative and qualitative research before you choose the perfect credit card designed according to your spending habits.

    Credit Cards
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