5 Wrong Assumptions About Credit Cards

Published: September 16, 2016 | Updated: July 1, 2020 | Posted by: Kristel Silang | Credit Card


5 Wrong Assumptions About Credit Cards


Many Filipinos think that having a credit card will automatically be bad for you. This misconception is one of the reasons why there is still a low credit card penetration rate in the Philippines, as shown in the United Nations Conference on Trade and Development (Unctad) B2C E-commerce Index 2016 that among adult consumers, only 3% have credit cards.
One factor where we can attribute this is because of the negative connotation of credit cards among Filipinos. Here are some of them:

TOP MISCONCEPTION: Credit cards are bad for me.

People highlight that credit cards are evil because of what they read in the news or hear from the press.
The Bangko Sentral ng Pilipinas regulates all financial products, including credit cards, so that they designed to serve the best interest of consumers.
Credit cards will only officially opened once they are activated, even in the event of agents cold calling you or banks proactively sending you credit cards for activation.

Credit cards will put me in debt.

Debt from credit cards come from the accumulated spending and compounding interest due to late payments. Owning a credit card doesn’t put you automatically in debt all the time because it is up to you on how to manage your finances.

Credit cards will make me spend more than I should.

The credit limit, which is the maximum amount that you can use your credit card on without incurring interest or penalty fees. Banks compute for this number using variables such as employment tenure, monthly income, and any debt incurred while getting the credit card.
Using your credit cards can be a great way to consolidate spending in one statement.
If you think you need to improve your spending habits before getting a credit card with a higher credit limit, you can ask the bank if you can lower the credit limit you have to avoid overspending.

Finding the best credit card for my need is hard.

Most banks put up stalls at malls or at events to offer their services to potential customers. Analysis paralysis can also occur when someone who is looking for credit cards look through the websites of banks to find the best credit card for your needs.
Luckily, you can now access financial comparison websites such as MoneyMax.ph to save you time and money to find the best credit card for your needs.
compare credit cards

I won’t feel the impact of the credit card discounts and cash backs on my purchases.

Most people think that there are insignificant cashback amounts that can be gotten from credit cards. This is not the case because when you compute for the actual cash back you can get, this is not the case.
Let’s say that you spend Php20,000 per month with the following breakdown using your cashback credit card:

  • Dining – Php10,500
  • Grocery – Php3,000
  • Fuel – Php5,000
  • Medicine – Php1,500

You can get the following cashback with the following credit cards:


BPI Ayala Malls Amore• 1%-3% cashback on shopping at BPI affiliated merchants in Ayala Malls
• 1% cashback on groceries at BPI affiliated merchants at Ayala Malls
• 4% cashback at restaurants at Ayala Malls
• 1% cashback on utilities at BPI affiliated merchants at Ayala Malls
Php545Php 6,540
Security Bank Complete Cashback• 1% cashback on shopping
• 5% cashback at supermarkets
• 4% cashback on fuel
• 2% cashback on dining
• 3% cashback on utilities
BDO  American Express Cashback Credit Card1%Php200Php2,400
Standard Chartered Bank Platinum Cash Rewards Card• 3% rebate on ALL dining spends
• 3% rebate on ALL department store spends
• 0.3% rebate on ALL other spends
UnionBank MasterCard1.50%Php300Php3,600


Parting Thoughts

Credit cards can be a beneficial financial product if you know how to manage it well. The key is getting the right money mindset so you can maximize the benefits of having a credit card.