Credit Cards in the Philippines: How They Work

Thinking of getting your first credit card? You’re not alone.

For many Filipinos, it’s a major milestone—especially after landing that first job. But with so much information out there, it’s easy to get confused about how credit cards work.

Here’s the truth: credit cards are tools. Use them right, and they can help you build a good credit score¹, manage expenses, and even earn rewards. Otherwise, they can hurt your finances. 

That’s why it’s important to understand the basics. In this guide, we’ll bust common myths, explain key credit card terms, and help you choose a card that fits your lifestyle.

Busting Credit Card Myths in the Philippines

Many Filipinos hesitate to get a credit card—not because of the actual risks, but because of the myths surrounding them. Stories about debt traps, high income requirements, or ruined credit scores can be intimidating, especially for first-timers.

But the truth is, credit cards can be safe and even beneficial when used correctly.

Let’s clear up some of the most common misconceptions and set the record straight.

• Myth 1: Credit cards automatically lead to debt
  ➤ Truth: Credit cards don’t cause debt—overspending and missed payments do. If you spend within your means and pay on time, you’ll stay in control.
  
  
• Myth 2: Applying for a card lowers your credit score
  ➤ Truth: One application has little to no impact on your credit score. In fact, using a card responsibly can actually improve your credit history.
  
  
• Myth 3: You need a high salary to get approved
  ➤ Truth: Some banks offer the easiest credit cards to get for people earning as low as ₱10,000 per month. There are even secured cards for students or fresh grads.
  
  
• Myth 4: Paying only the minimum is enough
  ➤ Truth: You’ll avoid late fees, but credit card interest² piles up on the unpaid balance. This can snowball into debt if left unchecked.
  
  
• Myth 5: Credit cards are only for emergencies
  ➤ Truth: While they’re useful in emergencies, they’re also great for everyday expenses—especially when earning cashback or points. Just use them wisely and repay on time.

Even students or first-time employees can start with secured or starter cards. Don’t let myths stop you—understanding how credit cards work is the first step to using them wisely.

Choose a Credit Card That Fits Your Lifestyle

When getting your first credit card in the Philippines, don’t just go for the most popular one—choose a card that fits your lifestyle and spending habits.

The right card can help you save money and earn rewards on everyday expenses or even boost your business efficiency.

🚗 Commuter or Car Owner?

If you drive regularly, consider cards that offer fuel rebates, toll fee discounts, or auto service perks. Some cards also come with roadside assistance or exclusive car maintenance deals, helping reduce your vehicle-related expenses.

🍔 Foodie?

Love dining out or trying new restaurants? Pick a credit card that gives discounts at partner restaurants, exclusive dining experiences, or rebates on food deliveries.

🛒 Online Shopper?

If you spend a lot online, especially on platforms like Lazada, Shopee, or Amazon, go for a card that gives cashback or reward points for online purchases. Some cards also offer purchase protection and installment options for big buys.

✈️ Frequent Traveler?

For those who travel often, either locally or abroad, look for cards with air miles conversion, free travel insurance, priority check-in, or airport lounge access. Some even give discounts on flights and hotels booked through partner platforms.

🧑‍💼 Freelancer?

As a freelancer, flexibility is key. Choose a card that offers low or waived annual fees, installment plans for essential equipment, or high cashback on digital services like subscriptions, software, and online ads. Some cards also help track expenses easily, which is a big plus for financial management.

🏢 Business Owner?

If you run a small business, look into credit cards designed for entrepreneurs. These typically come with higher credit limits, expense tracking tools, rebates on office supplies, and rewards for business-related spending (like advertising, shipping, or utility bills). Some also let you issue supplementary cards for employees with spending controls.

Also consider:

• Your monthly income (some cards are easier to get with lower requirements)
• Interest rates and annual fees
• Rewards programs or cashback systems

If you're starting out, compare credit cards designed for beginners—they're often more flexible and easier to manage. Choosing the right card sets you up for smart spending and better financial habits from the start.

How to Read Your First Credit Card Statement

Understanding your monthly statement is also essential if you want to avoid charges and stay on top of your budget.

Here’s a quick breakdown of credit card terms to know:

• Statement Date: The billing period covered
• Due Date: Deadline for your payment
• Total Amount Due: The full balance for the month
• Minimum Amount Due: The lowest payment to avoid late fees
• Credit Limit: Maximum amount you can borrow
• Available Credit: What’s left to spend

Always double-check your transactions to ensure they’re accurate. If something looks off, call your bank ASAP.

PRO TIP: Want to avoid interest altogether? Pay the Total Amount Due on or before the due date. That’s how you use your card like a pro—right from the start.

Sources:

• ^[1] Why Keeping a Good Credit Score Matters (ABS-CBN News, October 2017)
• ^[2] Understanding Credit Card Interest (Investopedia, October 2024)