Reading time: 4 minutes
December 14, 2018
Are you looking for the best credit card and exploring your choices? When you enter the credit card market for the first time, the many choices can overwhelm you.
From the wide array of credit cards out there, how will you pick the right card for you? It is not as hard as you think.
Shopping for a credit card is much like shopping for items like clothes and shoes: you check out each product’s features, prices, and quality. This is why you have to know what your options are and understand how they work.
Check this in-depth guide to understanding the credit card market in the Philippines so that you will have an idea of what cards may suit your needs.
The Bangko Sentral ng Pilipinas (BSP) supervises banks that issue credit cards to protect consumers’ rights.
Here are the BSP-regulated providers of credit cards in the Philippines:
Banks offer many types of credit cards, each with its own set of benefits and fees. Anyone looking to get a credit card can find the best one and save money by comparing all the options.
Secured credit cards are like any regular card, except that they require collateral: a deposit account with the issuing bank. The deposit amount may be equal to or a percentage of the credit limit. If you have any unpaid balance on your secured credit card, the bank will deduct the amount from your account.
Unsecured credit cards are the more popular and common card types. Unlike secured cards, unsecured cards do not require any collateral. When assigning a credit limit, banks assess the person’s income and credit history.
Regular cards are the most common types of credit cards. They come with basic rewards, lower credit limits, lower or no annual fees, and higher interest rates of 2% to 3%. They are the best credit cards for beginners and low-income earners.
Premium credit cards provide added perks and exclusive privileges. For example, Platinum credit cards provide exclusive access to concerts or shows before the official ticket selling date.
Premium cards have higher annual fees, higher credit limits, and lower interest rates than regular cards. This is why premium credit cards are typically issued to high-income earners and big spenders.
When choosing a credit card, consider also the network that processes payments between banks and merchants.
Visa and MasterCard are the largest and most popular networks of credit cards in the world. The smaller players include American Express, JCB, UnionPay, and Diners Club.
Card payment networks decide where a credit card can be accepted. For example, if Visa and MasterCard are the only accepted cards in a certain merchant, you cannot pay using a JCB card.
These networks also provide unique perks such as travel assistance, emergency services, and exclusive offers.
Credit card networks offer different features and benefits that suit different consumers. Compare these networks to find out which one suits your needs best.
The table below compares the features of the major payment networks of credit cards in the Philippines
Now that you know the different types of credit cards, the next logical step is to compare your options. Skipping this step can be a costly mistake, as the wrong choice may put you in debt rather than save you money.
It helps to know what features to look for based on your needs and purpose for using a card. Beginners, travelers, and shoppers must consider certain credit card features.
Credit cards for beginners should be easy to qualify for and affordable to own. The best credit cards for starters offer all or some of these features:
By using their credit cards, frequent travelers can enjoy travel rewards such as air miles, hotel discounts and freebies, and airport lounge access. These rewards are ideal for travelers who can pay their monthly balances in full.
The best credit cards for travel have these features in common:
Rewards programs are among the top reasons people use credit cards because they maximize the cards’ benefits.
Note, though, that some credit cards with zero or very low annual fees and low interest rates do not offer rewards.
If credit card rewards are important to you, here are the features worth looking into:
How do you find out which credit card is right for you? It starts with knowing as much as you can about your choices in the credit card market in the Philippines. Understanding the differences between credit cards and how they work also matters. This way, you can confidently pick the perfect card for your needs that will not put you in debt.