10 Advantages of Credit Cards for People Who Are Afraid to Get One

Published: January 22, 2021 | Updated: August 27, 2021 | Posted by: Janine Daquio | Credit Card

Advantages of Credit Card | Moneymax

You’ve probably heard horror stories from family and friends about credit cards. Like how fees are so expensive, or how they never get approved for one, or how their credit card bills are piling up. They might have also talked about the advantages of credit cards at one point, but their credit card woes far outweigh credit card plus points.

According to the 2018 Moneymax Financial Life Survey, Pinoys don’t get a credit card for three reasons: the interest fees, the approval process, and lack of financial discipline. But as long as you swipe responsibly and pay your bills on time, you can fully enjoy the advantages of credit cards.

What are the Advantages of Credit Cards?

It’s good to know the pros. But to manage your expectations, it’s good to know the cons as well. If you need help deciding, we’ve listed down 10 reasons why you should get a credit card, and why it’s even better than cash and debit cards.

1. Credit Cards Teach You to Be a Responsible Cardholder

advantages of credit cards philippines - responsible cardholder

One of the benefits of having a credit card is that it teaches you to be a responsible credit cardholder. Other people’s credit card horror stories don’t need to be your own, too. At the end of the day, it really just boils down to how responsible you are with your credit card usage.

In short, one should not blame credit card debts on credit cards. After all, cards don’t swipe themselves at malls or key in CVVs on their own, right?

If you often max out your card, pay your bills late, or just pay the minimum balance, then your credit card fees will definitely accumulate. 

On the other hand, if you use your card responsibly, your monthly credit card payments will be manageable. And if you have no unpaid balance from the previous month, you won’t even have to pay finance charges.

What does being a responsible credit cardholder mean?

  • Charging only the amount you can pay in full when the next credit card bill arrives
  • Being in control of your credit card spending, like not using it for making impulsive purchases and cash advances, as well as for covering daily living expenses
  • Keeping your monthly credit card spending below 30% of your credit limit
  • Paying your credit card bill in full before the due date

Read more: How to Use Credit Cards Wisely: A Guide for New Cardholders

2. Credit Cards Help Monitor Your Monthly Spending

One of the perks of having a credit card is the ability to manage your spending. You can easily keep track of your credit card balance and transactions and make sure that you don’t reach your credit limit. This way, there will be no bill shock when your credit card bill arrives.

3. You are Protected by Law as a Credit Cardholder

Did you know that the Philippines has a law that protects credit card owners against unfair collection practices? It’s called the Philippine Credit Card Industry Regulation Law (Republic Act 10870)[1]. That’s one of the advantages of credit card over other payment methods.

In May 2018, the Bangko Sentral ng Pilipinas (BSP) issued new rules [2] that credit card providers in the country must follow:

  • Full disclosure of finance charge computation and other credit card fees in an easy-to-understand manner
  • Computing finance charges based on the unpaid balance as of billing statement cut-off date, excluding current and deferred charges
  • Notifying clients adequately before implementing any changes in the fees
  • Posting credit card payments via payment centers on the same day
  • Automatically moving due dates that fall on holidays and weekends to the next banking day
  • Observing fair, reasonable, and professional practices when collection agents deal with customers, including those with overdue accounts

Read more: 12 Credit Card Fees in the Philippines to Watch Out For

4. Credit Cards are Safe for Online Shopping

advantages of credit cards philippines - credit card for online shopping

Worried about using a credit card for online transactions? One of the advantages of credit cards is fraud detection.

For example, if you get approved for a BDO, BPI, or Metrobank credit card, you can avail of the issuer’s virtual card (BDO Virtual Card, BPI eCredit, or Metrobank ON Internet Mastercard). Using a separate card just for internet shopping protects you from online shopping scams, as it has a different card number from your regular card.

Online shopping is only as safe as the websites you visit and how careful you are against credit card fraud. Make sure to buy only from trusted websites with secure payment systems.

Save money on your credit card bills!

5. Credit Cards are More Secure Than Debit Cards

Debit cards provide the same convenience as credit cards do. You can use your debit card for transactions online and at stores that accept Visa or Mastercard.

But using a debit card has certain risks. Because debit cards are linked directly to the cardholder’s savings or checking accounts, you’d be greatly inconvenienced if your card is lost or stolen.

Unauthorized transactions would deduct large sums of money from your account. As a result, you might not have enough cash to cover any automatic bill payments. Additionally, getting your cash back might take several months because the bank has to investigate the incident first.

If a hacker steals your card information, you’re more likely to recover your money if it’s taken from a credit card than a debit card.

Read more: Credit Card vs Debit Card: Which Card Should I Use?

6. It’s Rewarding to Own a Credit Card 

advantages of credit cards philippines - rewards credit card

Perhaps one of the best advantages of credit card payments are the rewards. These include air miles, travel perks, and rebates. You can read more about the best credit cards in the Philippines here.

Credit card rewards are something you can’t always enjoy when paying with cash or debit card. More importantly, rewards points generally don’t expire, as long as your account is in good credit standing.

7. Credit Cards Help Build Credit History

Another big advantage of credit cards in the Philippines is that they can establish your credit record and build your credit history.

One of the common myths about credit cards is that they can hurt your credit score. Not necessarily, because a credit card can actually boost your credit score over time. It raises your total available credit and reduces your credit utilization ratio[3], which are among the factors used to compute a credit score.

Having a credit card for starters is great if you have no credit history yet as it can help you build one in the long term with responsible use. Without it, it will be more challenging to get approved for loans or lower car insurance rates.

8. Getting a Credit Card is Actually Easy

Another common misconception about credit cards in the Philippines: it’s difficult to apply and get approved for one.

But these days, you can quickly and conveniently apply for a credit card online. No need to leave your homes — just file your credit card application online using your mobile device.

If you’re anxious about getting declined for a credit card because of your low income, you’ll be glad to know that there are credit cards with low minimum income requirements that you can qualify for.

Got no income documents because you’re a freelancer or a fresh grad? No problem! You can apply for a secured credit card from AUB, BPI, Metrobank, RCBC, or Security Bank without having to submit financial documents.

If you’re a long-time customer of a bank with a considerable amount in your bank account, you may qualify for a credit card, too. Your bank may contact you to offer a credit card without requiring you to submit income documents.

Read more:

9. You Can Get Protection for Your Purchases

advantages of credit cards - credit card protection

One of the least-known yet important benefits of credit cards to customers is the purchase protection insurance. Some credit cards, such as PNB Platinum Mastercard, BDO World Elite Mastercard, and Blue from American Express, offer this feature.

Purchase protection insurance covers lost items due to theft and physical and accidental damage to purchased items for a certain period, like 90 days from the purchase date. If a product charged to your credit card gets lost or damaged, you can reimburse the amount up to the maximum amount. You won’t enjoy this protection when you pay with cash or a debit card.

10. You Won’t Lose Money When Your Card is Lost

If your credit card gets lost or stolen, you can immediately contact the bank to block the card and prevent unauthorized use. File a dispute for any unauthorized transactions. The bank will then conduct an investigation and give refunds for purchases you did not make. 

In contrast, when your cash gets lost or stolen, there’s a very slim chance you’ll get it back, if at all.

Should I Get a Credit Card in the Philippines?

If you think you’re ready for the responsibility of owning one, then go ahead and apply. Aside from the advantages of credit cards to customers listed above, a credit card is good to have if you will finance a major purchase like household appliances, furniture, electronics, and other high-ticket items. Instead of saving up for months, you can already purchase the item on installment at zero interest.

Ready to get your first credit card? Check out our credit card application guides:

Final Thoughts

Now that you know the many advantages of credit cards and the reasons not to shy away from them, are you ready to apply for one? Compare credit cards here at Moneymax.

Find the right credit card for you at Moneymax!