Complete Guide to Secured Credit Cards in the Philippines


Published on: November 1, 2019 Last updated: June 23, 2020

Secured Credit Card in the Philippines | Moneymax

This article was published on April 4, 2014 and was updated on November 1, 2019.

It isn’t always easy to get a credit card. You may be an entrepreneur or freelancer and therefore don’t have a stable income. Or you have been declined several times when applying for a credit card due to a lack of credit history.

Banks, in general, are not too keen on having people with no credit history apply for a credit card. For those with a bad credit history, it’s particularly difficult. When applying for a regular credit card doesn’t work out, you could try to apply for a secured credit card.

Here, we explain the workings of secured credit cards in the Philippines and have a look at which banks are offering them.

Read More: How Freelancers in the Philippines Can Get a Credit Card

What is a Secured Credit Card?

A secured credit card is a type of credit card with a cash deposit serving as collateral. Because it’s guaranteed by the cardholder’s deposit, applicants can expect quick and 100% approval. Thus, a secured credit card application is the easiest way to get a credit card in the Philippines.

Usually issued to people with bad credit or no credit history, secured cards don’t require income documents. The deposit amount already reduces the risk to the issuing bank in case the cardholder fails to make credit card payments. This feature makes secured cards ideal for first-time cardholders, low-income earners, and self-employed people with unstable income.

Read more: Earning Below P20,000? Consider These Low Income Credit Cards

How Does a Secured Credit Card Work?

Secured Credit Card in the Philippines - How Does a Secured Credit Card Work

A secured credit card shares many similarities with a regular credit card. You can use the card at any store or merchant that accepts Visa or Mastercard. Also, you can tap into typical credit card benefits as installment plans, discounts, reward points, and other perks—depending on the secured credit card you choose. Secured cards have the same fees and charges as well as interest rates as regular cards.

The main difference, however, is that a secured card requires you to open a savings or time deposit account with the issuing bank and deposit a certain amount into it, a percentage of which determines your credit limit. This means that if you put down a PHP 10,000 deposit, you’ll be given a maximum credit limit of PHP 9,000.

Using a secured card, you’re still expected to make monthly payments, but if you default on a payment, the bank will take out your hold-out deposit to recover your unsettled balance.

Thus, you have to manage your expenses very carefully and make sure this never happens, as it would mean that you won’t be able to use your secured credit card anymore. Besides, your credit history—which you’re improving when using a secured credit card—would be dealt a serious blow.

How Much Deposit Do I Have to Put in and What is My Credit Limit?

Generally, a minimum deposit of PHP 10,000 is required. From this amount, your credit card limit can be either 80% and 90%, depending on the issuing bank. The higher your deposit is, the higher your credit limit becomes.

This deposit cannot be withdrawn from your account until you clear and settle your credit card account and formally request card cancellation or lifting of your hold-out deposit. You’ll have to wait for one to two months for the bank to release the hold-out amount. From that point on, you should be able to withdraw your cash.

Ideally, you want your secured credit card to be eventually converted to a regular card. The conversion from a secured card to a regular one is possible either when you show enough proof of income, or if you’ve been paying your credit card bills on time and in full amount for at least a year.

Once you’ve converted your secured credit card to a regular one, you can start withdrawing from your deposit without having to cancel the card. Further, your secured card could help in applying for regular cards with other banks, as there is an increased chance that your application will be approved if you’re an existing credit cardholder with a good credit standing.

What are the Advantages and Disadvantages of Secured Cards?

Secured Credit Card in the Philippines - Advantages and Disadvantages of Secured Credit Cards

Now that you know how a secured credit card works, it’s time to weigh the pros and cons of having one, so you can decide if this is the right financial tool for you.

Benefits of Secured Credit Cards

  • Get approved for a secured credit card when you’ve always been denied for a regular card.
  • Proof of stable income is not required for a secured credit card application.
  • You can qualify even if you have bad credit or no credit history.
  • The credit limit is more predictable on secured cards than traditional ones, as it’s a percentage of the hold-out deposit. You can have a higher credit limit by increasing your deposit.
  • Build a good credit history or improve your credit score. If you use your secured card responsibly and manage your payments properly, this will reflect in your credit report and help boost your creditworthiness.
  • No agent from debt collection agencies will hound you for any missed credit card payment, as the bank would just take out the unpaid balance from your hold-out deposit.
  • Your deposit may earn interest if your account is an interest-bearing one.
  • You may be able to qualify for an unsecured credit card if you make consistent on-time payments on your secured credit card.

Drawbacks of Secured Credit Cards

  • A security deposit is required. You can’t access your funds—even for emergency purposes—until your account is closed.
  • The credit limit is tied to the hold-out deposit. If you can’t make a large deposit, you’ll have to make do with a low credit limit.
  • Missed payments on a secured credit card can hurt your credit score.

What are the Available Secured Credit Cards in the Philippines?

In the Philippines, you’ve got quite some choices when it comes to secured credit cards from AUB, BPI, Metrobank, RCBC, and Security Bank. Among these cards are the following:

Secured Credit Cards Minimum Hold-Out Deposit Credit Limit Annual Fee Interest Rate
AUB Secured Credit Card (1) PHP 25,000 80% of the hold-out deposit Free for life 2.25%/3.50%
BPI Express Start (2)
  • Savings account: PHP 10,000
  • Time deposit: PHP 50,000
90% of the hold-out deposit PHP 1,350 to PHP 5,500 3%/3.50%
Metrobank Save and Swipe PHP 12,000 90% of the hold-out deposit Zero to PHP 6,000 3.50%
RCBC Bankard InstaCard (3) PHP 10,000/USD 2,000 90% of the hold-out deposit PHP 60 monthly/PHP 150 monthly 2.50%
Security Bank Fast Track (4)
  • Savings account: PHP 15,000
  • Time deposit: PHP 100,000
80% of the hold-out deposit PHP 2,000 to PHP 4,000 3.50%

Secured Credit Card Application for Beginners

Secured Credit Card in the Philippines - Secured Credit Card Application

A secured credit card application is generally a smooth and straightforward process, and even simpler than getting a regular card.

Interested in getting one? Follow these steps on how to apply for a secured credit card in the Philippines.

1. Ensure That You’re Eligible for a Secured Credit Card

Although it’s easier to qualify for a secured card than a regular card, you’ll still have to meet the eligibility requirements of the bank.

First, you have to be at least 21 years old (or at least 18, if you’ll apply for a BPI secured credit card). Security Bank and BPI also require prospective secured credit cardholders to have a business or residence landline number.

Most importantly, you should not have a delinquent credit card account with the bank where you plan to get a secured card from.

2. Choose the Right Credit Card for You

Any credit card in the bank’s lineup can be availed as a secured credit card. Especially if you’re trying to build a good credit score, it’s best to select the card that will work for you. You’d want a card that matches your budget, needs, and spending habits.

You can shop around for options to apply for a secured credit card online at each bank’s website, or you can save time by comparing credit cards here at Moneymax.

3. Visit the Bank

Once you’ve decided on the credit card to apply for, go to the nearest branch of your bank of choice to open a savings account or time deposit for your secured credit card application.

Make sure to bring your valid IDs and the amount for your hold-out deposit. If you’re an expat or foreign resident, bring your work permit, Alien Certificate of Registration (ACR), or embassy accreditation documents just in case the bank asks for it.

4. Submit the Required Documents for Secured Credit Card Application

The bank staff will ask you to fill out and sign forms such as a credit card application form, savings account opening forms, and a deed of assignment.

The deed of assignment is a legal document in which you authorize the bank to hold your deposit amount and in case you default on your credit card payments, the bank can debit the hold-out amount to settle your unpaid balance.

5. Wait for the Card Delivery

The approval rate should be close to 100%—after all, you don’t put in a deposit for anything. Processing of secured credit cards in the Philippines takes around three to 10 baking days. It may be delivered to your address or have to be picked up at the branch where you filed your secured credit card application.

When you receive your new credit card, you may have to activate it by calling the issuing bank’s customer hotline.

Tips on Using Your Secured Credit Card Effectively

Secured Credit Card in the Philippines - Tips on Using Secured Credit Card

Having a secured credit card is a great opportunity to get your finances on the right track—don’t waste that chance. When used responsibly, a secured card can help you build your credit and raise your likelihood of getting approved for credit cards and loans in the future.

Here are a few quick tips to ensure a positive credit score with your secured credit card use:

  • Use the secured card only a few times every month to avoid quickly maxing it out.
  • Avoid making a cash advance on your secured credit card.
  • Monitor your credit card spending regularly, making sure that it doesn’t exceed your credit limit.
  • As soon as you notice any suspicious activity on your credit card account, report it immediately to the bank to prevent further unauthorized transactions.
  • Pay your credit card bill in full and on time every month to avoid accumulating debt and improve your chance of qualifying for a regular card.

Final Thoughts

Secured credit is a good alternative to traditional credit cards, especially if you don’t have enough documents that prove a regular and stable income source. May this guide help you get approved for one and keep your finances in good shape.

Get a credit card that suits your budget and needs.


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