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MoneyMax.ph's Guide to Credit Cards in the Philippines

A credit card allows you to borrow money from financial institutions to shop for everyday items such as food, clothing, and gadgets. It may also be used for online shopping, dining, flights, gas refills, and utility bills.

When or how you decide to use your credit card is totally up to you. Your credit card can be used for expensive purchases such as buying a car, going on international trips and other items that might normally take months to save up for.

With a credit card, the bank will simply lend you money, which you are required to pay back. You have the flexibility to buy what you want or need immediately and can pay the bank back through several monthly instalments until you have cleared your outstanding balance.

Filipinos apply for a credit card because of the convenience they give and the "instant gratification" it offers to its owners. Credit cards offer instant gratification because you can buy what you on the spot without having to wait for your next payday.

Some credit card holders apply for credit cards to accumulate reward points, cash back benefits, discounts and other promotional items that come with signing up for a credit card.

  1. Give your credit card to the cashier to complete your payment.

  2. The cashier will print your receipt.

  3. Check the amount charged. If it's correct, sign and keep your copy together with other receipts of purchases charged to your credit card. This will help you track of all your credit card transactions.

  1. Make sure that the merchant you are dealing with has a credible and trustworthy website before undergoing a transaction.

  2. At the payment and check-out page, check to see if the merchant's website is secure by looking for https:// at the beginning of their website URL.

  3. Always examine your credit card monthly billing statements to check for any errors or suspicious activities that may not have your authorization.

  4. Don't send your credit card details through e-mail to prevent hackers and malicious programs from making fraud transactions using this information.

To apply for a credit card, follow these simple steps:

Research

Before you get a credit card, you should have a clear idea on what you plan to do with it and which type of card suits you best.

  • Do you want a credit card to purchase goods?
  • Do you hope to get a credit card so that you can accumulate reward points and get cash back benefits and claim other free promo items?
  • Do you want to own a credit card that will be used for your business?

List down a number of questions you want to know about credit cards and inquire at your local bank. You should also look into:

  • Annual fees
  • Late payment fees
  • Interest rates
  • Due dates

Compare the advantages and disadvantages of each bank's credit card and weigh in everything, so you can make a decision on which credit card best fits you.

Prepare for credit history background check

Banks may want to know if you have the ability to pay the monthly instalment fees through a good credit score through other credit cards and loans you have acquired in the past. Aside from this, they will also check your phone, internet, electric and other bills if they are being paid on time. The chances of your credit card application approval will increase if you have a good track record for these two items.

Banks will also check your age, income details, and employment information.

Decide on how you want to apply for your credit card

Once you have chosen the bank where you plan to apply for a credit card, the next question is how you can apply for your credit card. Some of the most common methods on how you can get a credit card are:

  • Visiting your local bank
  • Inquiring through a bank's information booth at the mall
  • Coursing your application through safe distribution channels such as legitimate comparison platforms

The most convenient and fastest way is through an online application, where our credit card comparison portal can also help you.

Double check everything before submitting requirements

To avoid the hassle of your bank officer returning your form to re-fill and to avoid rejection of your application, make sure that you double-check everything to see if you have missed any fields or if you have misspelled and forgot to include important details.

To know more about credit cards, visit our Frequently Asked Questions page.

To apply for a credit card, you will need the following:

  • Application form
  • Photocopies of 2 valid government-issued identification card you own (Voter's ID, TIN ID card, SSS ID, Passport, driver's license)

For employee applicants:

  • Most recent payslip
  • Certificate of Employment (COE)
  • Latest Income Tax Return/ BIR stamp or Form 2316

For self-employed applicants:

  • Copy of DTI or SEC registration
  • Latest audited financial statements with bank/BIR stamp
  • Latest Income Tax Return with bank/BIR stamp or Form 2316

For foreign applicants:

  • Philippine VISA
  • Alien certificate of registration stating type of Visa held
  • Immigration Certificate of Residence(ICR)

The maximum credit card limit should depend on the type of credit card you applied for.

Credit cards are usually divided into different categories. Here are some of them:

  • Classic Credit Cards

    These are the most common type of credit cards, which provide credit card holders with extra money and fund extension in case of emergencies or when they are still waiting for their other source of income to arrive.

  • Premium Credit Cards

    Among the premium cards are Platinum, World and Infinite cards. Premium cards require applicants to have high credit scores and will only be granted to individuals with high income as a minimum requirement.

    This type of card is subject to higher charges than their regular counterparts, but also offer more benefits. Among the benefits they offer are extensive reward programs, in which you can use to accumulate points to purchase items, have your annual fees waived and more.

  • Upon getting approval for your credit card, you should be aware of the fees involved. Here are some of them:

    1. APR
      Also known as Annual Percentage Rate, you get this charge when you don't pay your monthly bill charges in full. When you missed paying your dues for the month, your balance will be carried to the next month, which will then result in paying interest for the outstanding balance. When not closely monitored, the APR can balloon to more than 40%. That is why it is most advisable to always pay your bills in full each month even if only a minimum payment is required so as to prevent incurring any interest in the future.

    2. Annual Fees
      To continue enjoying the benefits your credit card, you are required to pay a fee for every year of use. Some credit card companies waive annual fees for the first year. In this case, you will start paying when your credit card reaches the second year. Fees start from P1,000 and can range to P5,000.

    3. Balance Transfer Fees
      If you have previously applied for a credit card and the interest rate is high, and you want to lower your interest rate to zero, you can use a balance transfer to a new card. You can also use balance transfer if you have a number of credit cards in possession, as this will enable you to continue paying for your outstanding balance using just one credit card. Balance transfers usually charge a minimum fee of around 2% depending on how much you want to transfer. Keep in mind though that the amount you plan to transfer will be limited by the credit limit on your new card.

    4. Cash Advance Fees
      There may be times when you need cash to pay. When you withdraw cash from your credit card account at an ATM machine, the interest rate could go up to 4% of the amount you have withdrawn or charge a fixed fee for your transaction - whichever is higher. When thinking of making a cash advance, you should also remember that you will be charged additionally depending on how long it will take you to repay the cash starting from the date of your withdrawal. As such, it never advisable to take on a cash advance using a credit card.

    5. International Transaction Fees
      Using your card when you travel to other countries will also mean additional charges. To prepare for any additional charges, it is best to call your bank to ask about international transaction fees associated with shopping, dining and other expenses you will make using your credit card. International transaction fees are usually just 3%, but if you use it frequently, your bill can also increase quickly.

    6. Overlimit Fees
      Had too much fun with your credit card? Exceeding your card's credit limit also translates to extra charges. Even when you exceed your limit just by a couple of pesos, you will still be charged an estimated amount of P500. To avoid unnecessary fees, stick to your credit limit and control your spending habits.

    7. Underpayment Fees
      Should you forget to make your minimum monthly payment, you will incur an underpayment fee on top of the usual interest rates you usually get. Underpaying will cost you around P500 in general.

    The key thing to remember about these fees is that certain credit card companies have them, and that credit card company officers don't tell you everything you need to know. Be sure to read all the details and consult a finance person so that you will have a clear idea on exactly how much you need to pay for your credit card monthly instalment.

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