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.
Credit card providers in the Philippines
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:
- Bank of Commerce
- BPI Family Savings Bank
- China Bank
- EastWest Bank
- Equicom Savings Bank
- Land Bank
- SB Cards Corporation
- Security Bank
- Standard Chartered Bank
Types 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 vs. unsecured credit cards
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 vs. premium credit cards
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.
Other types of credit cards
- Rewards cards allow earning rewards points for each purchase that can be redeemed for gift certificates and free or discounted flights and hotel stays.
- Cashback cards allow earning rebates on goods and services for each purchase.
- Low balance transfer cards consolidate high-interest balances into a single, lower interest rate card.
- Fuel cards allow earning rebates on fuel expenses.
- Shopping cards allow earning rewards and saving money when shopping at popular retail stores.
- Frequent flyer cards allow points to be redeemed for plane tickets. They are ideal for travelers who want to earn air miles for each purchase.
- Air miles cards allow redeeming points for any airline. These are ideal for flyers with no particular preference for an airline.
- Specialty cards are designed for specific needs and customers (e.g., women, online shoppers, and customers of a particular business).
- Business cards help business owners and employees manage expenses such as travel and procurement. Benefits may include expense reports, travel insurance, and low introductory rates.
Credit card payment networks
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
How to compare credit cards
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.
Best credit cards for first timers
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:
- Zero or low annual fees
- Low interest rates. Low interest credit cards charge a smaller fraction of interest than regular cards. They may provide limited or fewer rewards, but the interest rates of 1% to 2.75% make up for it.
- Low minimum annual income requirement. First timers such as employees who are fresh out of college and do not earn much may qualify for credit cards with Php 120,000 to Php 180,000 annual income requirement.
Best credit cards for travel
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:
- Free travel insurance coverage that can go as high as Php 20 million
- Exclusive lounge access to certain airports in the Philippines
- Air miles or rewards points that can be redeemed for airline tickets, hotel accommodations, or travel vouchers
Best rewards credit cards
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:
- Non-expiring rewards points so that your all your accumulated points will not go to waste
- The kind and variety of rewards such as cash back rebates, shopping and dining gift certificates, annual fee waivers, or charitable donations
- The highest cashback rate in the category you spend the most on (e.g., groceries, gas, dining, shopping, utility bills). The best rebate credit cards in the Philippines allow you to redeem 0.2% to 6% of your monthly purchases.
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.