Is getting your first credit card a part of your #adulting goals? That plastic card can be a great tool for building your credit history and managing your finances as a young professional.
But don’t dive into it yet without doing your homework. Know what it takes to get the right credit card for beginners like you.
Here’s a simple guide for soon-to-be and new cardholders on each step of their credit card ownership journey.
Choosing Your First Credit Card
The number of options in the Philippine credit card market can be overwhelming for newbies. Credit cards cater to different market segments, including first-timers. To make it easier for you to find the best choices, look for certain qualities in a credit card. First and foremost, your first credit card must be something you can afford to own.
Here are the important things to consider when shopping for a credit card in the Philippines:
- Annual fee: The membership fee you pay for the convenience of using a credit card. Many starter credit cards have waived annual fees for the first year, so you can save money as a new credit cardholder.
- Interest rate or finance charge: The interest that will be charged when you carry a balance over from the past month
- Penalty fees: The bank charges a late payment fee when you don’t pay at least the minimum balance by the due date. You also have to pay an over credit limit fee when you go beyond your credit limit. If the bank doesn’t charge it, your transaction will be automatically declined when you exceed your credit limit.
- Rewards program: Redeemable points for every amount spent using the credit card, including cash back rebates, annual fee waivers, gift certificates, and air miles. Note that credit cards with very low annual fees or interest rates usually don’t offer rewards.
- Eligibility requirements: The minimum age, income, and other requirements to qualify for a credit card
The best choice for credit card beginners is one with a low annual fee, interest rate, penalty fee, and income requirement. Starter credit cards that offer good rewards programs are also worth considering.
Applying for Your First Credit Card
Once you’ve picked the most suitable credit card for you, prepare the usual requirements for a first-time credit card application.
Credit Card Application Requirements
- Completed application form (Most credit card application forms can be downloaded or accomplished online.)
- Proof of identity: a valid photo-bearing ID (passport, UMID, driver’s license, etc.)
- Proof of income: Certificate of Employment, payslips, income tax returns, etc.
Credit Card Application Procedure
- Go to the official website of the issuing bank and look for its online credit card application facility.
- Fill out an online application form, making sure that you provide complete and correct information to avoid processing delays.
- Take photos of your supporting documents and attach them to your online application.
- Submit your credit card application.
You may opt to apply for your first credit card at the nearest branch of your chosen bank. You’ll have to fill out the application form on-site and submit your documents to the bank teller.
Using Your Card Responsibly
Got your new credit card already? Congratulations… and good luck with using it.
What to Do with Your New Credit Card
Before you can start using your first credit card, do these steps immediately:
- Sign the back of your card. This is for your own security and convenience.
- Activate the credit card. Along with your new card, the bank has sent you instructions for credit card activation. Follow them. Usually, it involves calling the bank’s hotline or sending an SMS.
- Enroll your credit card in your online banking account. This way, you can monitor your credit card transactions and view your monthly billing statements via your bank’s electronic banking system. You can even schedule your credit card payments online to avoid missing a due date.
- Read the fine print. Make sure to read and understand the terms and conditions of the bank before you start using your new card. Take note of the credit limit, rewards, and other benefits, as well as the annual fee, finance charge, and other credit card fees.
- Store it in a safe place. Put your card in your wallet (if you’ll use it often) or in a secure drawer in your home (if you’ll use it only for emergencies or travel) to keep it from getting lost or stolen.
Reminders on Managing Your First Credit Card
Now, you’re ready to use your new card! Be a responsible credit card owner. Here are some reminders for first-time credit card users:
- Pay it off in full every month. This will keep you from paying finance charges and late payment fees.
- Don’t spend beyond your means. Especially if you’re given a six-digit credit limit, never make the mistake of maxing out your first credit card. It’ll be harder to pay your monthly balances that way.
- Monitor your credit card transactions and statements regularly. If you notice anything suspicious, report it immediately to the bank.
- Never share your credit card details. Protect yourself from credit card fraud by making sure you don’t give out your credit card and personal information to anyone.
Getting your first credit card is a simple process, but it gets more complicated when you start using it. As long as you’re careful and frugal with your credit card spending, as well as consistent with your payments, you’ll go along just fine.