How Freelancers in the Philippines Can Get a Credit Card

by Venus Zoleta, on category "Credit Card"

July 31, 2019


Credit Card for Freelancers in the Philippines | Moneymax

“How can I apply for a credit card if I’m working as a freelancer?”

For anyone who has started a work-from-home career, concerns like getting a credit card for freelancers always come to mind.

Credit cards are useful for self-employed Filipinos just as they are for employees. Having a plastic card allows freelancers to verify PayPal account for receiving payments online. It can be used to buy software programs, web hosting services, and other work tools. Of course, it comes in handy when shopping online, paying bills, or booking flights.

While a Visa/Mastercard debit card or prepaid card can get those things done, it’s better to use a credit card for certain transactions. For example, you can pay for big purchases like laptops or appliances in monthly installments with no interest. More importantly, a credit card can be a life-saver during a financial emergency when you have no access to cash.

Read more:

Unfortunately, it’s challenging to get a credit card for freelancers in the Philippines.

To qualify for a credit card, you have to own a registered business with a profitable operation for at least one to two years. To prove that, you’re required to submit an income tax return (ITR), business registration papers, and financial statements. Beginning freelancers typically don’t have these documents on hand.

But don’t lose hope—you can still get a credit card even if you don’t have stable employment. Here are different ways for Filipino freelancers to get approved for a credit card.

Apply for a Secured Credit Card

How to Get Credit Card for Freelancers - Apply for a Secured Credit Card

As a freelancer, you have a higher chance of getting approved for a secured credit card than a regular one.

How Secured Credit Cards Work

Although they have the same features with regular cards, secured credit cards have a different set of requirements.

To get a secured card, you need to open a savings, checking, or time deposit account with a bank and deposit a certain amount, which the bank will place on hold as your deposit guarantee (also called hold-out deposit). This means you’re not allowed to withdraw your money until you cancel your card and have fully settled your credit card account balance.

Also, in case you fail to pay your credit card debt, the bank can recover the money by taking your hold-out deposit.

Your deposit will also be the basis for your credit card limit, which is typically 80% to 90% of the hold-out amount. For example, if your hold-out deposit is PHP 10,000, your credit limit will be PHP 8,000 to PHP 9,000, depending on the bank.

Banks allow secured credit cardholders to increase their credit limit by depositing an additional amount into their account and requesting the amount to be placed on hold.

Because the hold-out deposit serves as collateral, secured credit cards are generally 100% approved (except for cases like an applicant having a delinquent bank account). No need to submit any income document like ITR and bank statements. You just need to fill out some forms and present your valid IDs.

After six months to a year of using the secured card, paying your bill in full and on time, and establishing a good credit score, you can request the bank to convert it into a regular card.

Secured Credit Cards in the Philippines

Currently, five banks offer secured credit cards: AUB, BPI, Metrobank, RCBC, and Security Bank.

Here are your options of secured credit card for freelancers:

AUB Secured Credit Card

  • Available cards: All AUB credit cards
  • Annual fee: No annual fee for life
  • Interest rate: 3.50% (AUB Easy and Classic cards) / 2.25% (AUB Gold and Platinum cards)
  • Minimum deposit:
    • Easy Mastercard: PHP 25,000
    • Classic Mastercard: PHP 50,000
    • Gold Mastercard: PHP 125,000
    • Platinum Mastercard: PHP 250,000
  • Credit limit: 80% of the hold-out deposit
  • Requirements:
    • At least 21 years old
    • Completed application form
    • Signed and notarized deed of assignment
  • Processing time: Seven to 10 banking days

BPI Express Start

  • Available cards: All BPI credit cards
  • Annual fee: PHP 1,320 to PHP 5,500
  • Interest rate: 3% (BPI Family Credit Card) / 3.50% (all other BPI credit cards)
  • Minimum deposit: PHP 10,000 (ATM/Passbook savings account) / PHP 50,000 (time deposit)
  • Credit limit: 90% of hold-out deposit
  • Requirements:
    • At least 18 years old
    • Home landline number
    • Completed Express Start application form
    • Accomplished deed of assignment
  • Processing time: Two to three weeks

Metrobank Save & Swipe

  • Available cards: All Metrobank credit cards
  • Annual fee: No annual fee for life (M Free Mastercard) / PHP 1,500 to PHP 6,000 (all other Metrobank credit cards)
  • Interest rate: 2.49% (M Lite Mastercard) / 3.50% (all other cards)
  • Minimum deposit: PHP 17,000
  • Credit limit: 90% of hold-out deposit
  • Requirements:
    • Valid ID
    • Completed application form
    • Signed and notarized deed of assignment
  • Processing time: Two to four weeks

RCBC Bankard InstaCard

  • Available cards: All RCBC credit cards
  • Annual fee: PHP 60 monthly (regular cards) / PHP 150 monthly (premium cards)
  • Interest rate: 2.50% (Peso cards) / 2% (Dollar cards)
  • Minimum deposit: PHP 10,000 / USD 2,000
  • Credit limit: 95% of hold-out deposit
  • Requirements:
    • At least 21 years old
    • Two valid IDs
    • Completed InstaCard application form and savings account opening forms
    • Accomplished deed of assignment

Security Bank Fast Track Secured Credit Card

  • Available cards: Security Bank Mastercard credit cards only
  • Annual fee: PHP 2,000 to PHP 4,000
  • Interest rate: 3.50%
  • Minimum deposit: PHP 15,000 (savings account) / PHP 100,000 (time deposit)
  • Credit limit: 80% of hold-out deposit
  • Requirements:
    • 21 to 65 years old
    • Home landline number
    • Completed application form
    • Completed holdout agreement form
    • Valid ID
  • Processing time: Three banking days

How to Get a Secured Credit Card for Freelancers

  1. Choose the right secured credit card for you.
  2. Visit the nearest branch of the bank where you have an existing account or want to open a new one.
  3. Fill out a credit card application form and a deed of assignment.
  4. Submit the other secured credit card requirements.
  5. Pay your deposit amount.
  6. Wait for the approval and delivery of your new credit card.

Read more: Credit Cards with Easy Application Requirements

Avail of a Savings Account with Credit Card Bundle

How to Get Credit Card for Freelancers - Savings Account with Credit Card Bundle

Don’t like the idea of hold-out deposit in exchange for a secured credit card?

You may want to open a savings account that comes with a free credit card and doesn’t require a hold-out deposit. As of this writing, only RCBC explicitly offers it as a regular product.

This free credit card with savings account bundle is only available in select RCBC branches. New and existing clients who will open a new RCBC Peso Savings account can get a complimentary RCBC Bankard credit card with the following features:

  • Default credit card limit: PHP 5,000 (Credit limit can be increased through the RCBC Bankard customer service hotline or email.)
  • Free annual fee for the first year
  • Cash advance of up to 30% of the credit limit

How to Apply for a Savings Account with Credit Card Bundle

To avail of the savings account-credit card bundle, submit the following requirements to any participating RCBC branch:

  • At least one valid government-issued ID
  • Proof of address (such as billing statement)
  • Minimum initial deposit: PHP 10,000

No proof of income is required to get the free credit card with a savings account, making it ideal for freelancers in the Philippines.

You may open an RCBC savings account online, but you’ll still need to complete your credit card application in a participating branch.

It takes three banking days to process the complimentary credit card and seven to 10 banking days to deliver it.

Request an Endorsement from Your Branch of Account

How to Get Credit Card for Freelancers - Endorsement from Branch of Account

Do you have a long-time bank account with a large balance?

Banks like BDO and BPI provide recommendation for a credit card to clients who have maintained a good account history with them for at least a year. If you have regular cash inflow into your bank account (like receiving your earnings from clients every month), then you might qualify for a credit card with your bank without having to submit proof of income.

Just call or visit the branch where you have an existing savings account and ask for an endorsement on your credit card application. You’ll be asked to fill out some forms and wait for a call from the bank’s credit card agent to verify your identity.

Sometimes, banks send a credit card to their customers without making them go through the endorsement process.

Register with the BIR and DTI

How to Get Credit Card for Freelancers - Register with the BIR and DTI

When you’ve put your finances in order after years of freelancing, consider securing registration documents from the Bureau of Internal Revenue (BIR) and Department of Trade and Industry (DTI).

Start with getting a Certificate of Registration (CoR) from the BIR. Once you have a CoR, you can already file an ITR and pay your taxes.

Also, apply for a Certificate of Business Name Registration at the DTI.

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Tedious and time-consuming as these government transactions are, they’ll be worth it for managing your finances as a freelancer. Your ITR and business registration document will increase your chance of getting approved not only for a credit card but also a personal loan for freelancers.

Your income documents will also be useful when you apply for a visa, as these will prove your intent to return to the Philippines after your international travel.

Final Thoughts

Although it’s difficult to get a credit card for freelancers in the Philippines, it isn’t entirely impossible. Try the options discussed above. If you still can’t get approved for a card, consider alternatives such as prepaid cards and debit cards that you can use for online transactions. Or ask your employed parent, sibling, or spouse to apply for a credit card and assign you as a supplementary cardholder.

For receiving payments from clients, you may also use a mobile wallet app (like Coins.ph, GCash, or PayMaya) that allows you to perform a wide range of financial transactions, like sending money and paying bills.

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