How to Apply for a Credit Card: What Beginners Need to Know
By: Venus Zoleta
Published on: January 29, 2020 . Last updated: December 16, 2020 Category: Credit Card
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 the first time.
Here’s a simple credit card guide for beginners on how to apply for a credit card in the Philippines.
Table of Contents
- Getting Your First Card: How to Apply for a Credit Card
- What to Do If Your First Credit Card Application Got Declined
- How to Use Your First Credit Card Responsibly
- Final Thoughts
Getting Your First Card: How to Apply for a Credit Card
1. Check If You’re Qualified
A credit card application is like a typical job application that requires applicants to meet certain minimum qualifications so that they’re eligible to apply.
Banks impose minimum requirements on age, income, employment/business operation status, and others for credit card applicants.
Minimum Eligibility Requirements for First-Time Credit Card Application
Here are the common eligibility requirements for first-time credit card applications:
- Age – At least 21 up to 65-70 years old
- Citizenship – Filipino (for most banks) and foreigners living in the Philippines for the past two years (for banks like BDO)
- Gross annual income – At least PHP 120,000 to PHP 252,000 (for basic credit cards)
- Contact number – An active residence or business landline number and mobile number
- Valid Taxpayer Identification Number (TIN)
- Employment/Self-employment status – At least one-year regular employment or at least one to two years of profitable business operation/professional practice
If you’re too young to qualify for a credit card, you may still be eligible for a supplementary credit card as long as you’re at least 13 years old. You can get this card if one of your older family members applies for a primary credit card and enrolls you for a supplementary card.
If your income falls below the bank’s threshold, you can easily get approved for a secured credit card that doesn’t have any income requirement. However, you need to open a savings account with the bank and deposit at least PHP 10,000 that will serve as your collateral.
2. Choose Your First Credit Card
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.
Consider these important factors 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
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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.
Types of Credit Cards Suitable for Beginners
A credit card appeals to a specific type of users who share the same budget range, interests, lifestyle, and financial needs. This is why there are various credit card types in the market that appeal to different types of users.
Before going through the steps on how to apply for a credit card, you must inform yourself of the following cards first.
1. Basic Credit Cards
Sometimes called classic or standard credit cards, basic cards are the easiest to qualify for because of their low minimum income requirement. They’re among the most affordable to own, too, as they usually come with lower annual fees compared to premium cards. Basic credit cards are also considered the no-frills type because they don’t offer rewards.
A basic credit card is ideal for those who just want a simple card for daily and big-ticket purchases and are not interested in earning rewards.
2. No Annual Fee Credit Cards
A credit card that automatically offers free annual fee for life is a great first credit card for beginners. Because the annual fee is waived forever, it allows you to save money on credit card fees.
3. Rewards Credit Cards
A rewards credit card earns points per qualifying purchase made using the card. When you’ve accumulated rewards points, you can redeem them for gift certificates, cash rebates, air miles, annual fee waiver, or any perks included in the credit card provider’s rewards catalog.
4. Cashback Credit Cards
If earning credit card rewards don’t appeal to you, perhaps a cashback will. A credit card that earns a percentage of cashback or rebate on eligible purchases allows you to save as much as PHP 1,000 monthly. Typically, cash back earned for a month is credited to the credit card bill for the next month, so it lowers your total amount due for that month.
5. Travel Credit Cards
Travel credit cards are a special type of rewards credit card that help cardholders save money on travel-related expenses such as airfare and hotel accommodations. These cards offer points or air miles that can be redeemed for free flights or hotel stays.
6. Co-Branded Credit Cards
If you always buy from a particular brand or store, a co-branded credit card that’s linked to that brand is your best bet. It can help you maximize your savings when using the card. Plus, you’ll enjoy rewards, freebies, and other privileges as a cardholder.
Comparing Credit Cards
The sheer number of options in the Philippine credit card market can be overwhelming for newbies. Doing your legwork before choosing the right credit card is a must.
But if you don’t have much time and patience to shop for credit cards, you can save yourself the trouble and use the Moneymax credit card comparison platform instead. It’s a free and easy-to-use online tool that lets you compare credit cards in the Philippines in just a few clicks.
3. Prepare the Required Documents
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 return (ITR), etc.
4. Apply for a Credit Card
The most convenient way to apply for a credit card is to do it online. Many banks nowadays enable credit card applications over the internet.
How to apply for a credit card online:
- 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.
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- Earning Below P20,000? Consider These Credit Cards for Low Income Earners
What to Do If Your First Credit Card Application Got Declined
The first and most important thing to remember when you don’t get approved the first time: Never lose hope. Getting your first credit card application rejected doesn’t mean you’ll never qualify for a credit card.
But don’t make yourself appear too desperate—wait for at least three to six months before you apply again for a credit card with another bank. Take that time to work on improving your credit score and find a credit card that suits you more. This way, you can boost your chances of getting the bank’s approval for a credit card.
How to Use Your First Credit 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 at 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. Follow our tips before you ask yourself how to apply for a credit card.
Source:  “Should you sign your credit card?” (USA TODAY, 2014)
Venus is the Head of Content at Moneymax, with over 15 years of combined experience in digital marketing, corporate communications, PR, and journalism. She invests in stocks, mutual funds, VUL, and Pag-IBIG MP2. Outside of work, she’s crazy about cats and Korean dramas. Follow Venus on LinkedIn.