How to Pick the Best Credit Card That’s Perfect for You
Published: April 6, 2020 | Updated: April 7, 2020 | Posted by: Anton
Planning to shop for a new credit card? Indeed, owning a credit card is good when used responsibly. But unfortunately, many Filipinos make unwise decisions in determining how to pick the best credit card. They tend to choose the ones that have ludicrous perks instead of considering its long-term benefits.
Eventually, they end up swimming in a sea of debt because they exceeded their credit limit or were unable to pay various credit card fees. They could’ve avoided this by taking the time to study and compare their options.
And that’s the purpose of this guide—to help you find the best credit card that fits your needs. Currently, there are over 100 different cards offered by all the banks in the Philippines. It’s easy to get lost in the shuffle and just go with whatever offers they have.
But if you know exactly what you need in a card, you’ll find the one that will help you maximize your purchases and save money. Whether you’re planning to get your first credit card or your shopping for another, take time to follow this five-step guide on how to find the best credit card for you.
Step 1: Determine if you’re ready for a credit card.
Don’t just get a credit card on a whim. After all, each card comes with a set of responsibilities you shouldn’t ignore. Before you apply for a card, the first important thing to do is to honestly assess your financial situation. To get you started on how to find the best credit card, ask yourself these questions.
Can I pay all my monthly balances in full?
Obviously, you need to consider if you have enough money to pay off your credit card balances. People sometimes equate a credit card with free money, but this can’t be further from the truth.
You’ll pay for every swipe you make, that’s why you should only get a credit card if you’re financially responsible[1]. Do you have a job? Is your business generating enough revenue? If your answer to both questions is no, then maybe you shouldn’t get a credit card.
But if your answer is yes, you should then determine if you can consistently pay monthly balances in full. It’s best to look for credit cards with no annual fee. Also, it’s easier to pay off your monthly balances in full with a credit card that offers a longer grace period.
Typically, credit cards have a grace period of 30 days before they start charging interest. So instead of going immediately for premium or reward cards, try a less expensive credit card.
Do I have an existing credit card debt?
For first-timers, you can skip this part. For veteran cardholders, consider asking this question: Do you carry over unpaid balances each month? If so, prioritize getting either a low-interest card or a balance transfer card to make it easier for you to pay down your debt.
Will I use it to borrow more money?
Yes, credit cards can get you access to more money in the form of cash advances. No, you shouldn’t make getting a cash advance a habit.
As much as you can, avoid taking out cash advances because they charge a higher interest rate than regular purchases.
In case you’re planning to use it for emergencies, look for a card with a lower interest rate and fees for cash advances. Just make sure you don’t count big purchases as “emergencies”.
Step 2: Identify the fees you can afford to pay.
Owning a credit card comes with a price. Aside from the monthly balances, you have to deal with various fees. When choosing the best credit card, consider your budget and assess how much you are willing to spend on fees. It helps to set a maximum amount of annual fees, so you can weed out cards that are expensive to maintain.
Fortunately, some cards already offer waived annual fees, either for a year or for a lifetime. You can also check the minimum income requirement for the credit card of your choice to determine if you can afford it.
Premium credit cards usually charge higher fees because they offer more benefits than a standard one. A standard credit card with a PHP 180,000 annual income requirement suits you if your monthly income is PHP 15,000 or higher.
To qualify for a premium card, you need a higher monthly income of at least PHP 35,000 to HP 40,000. Go for a premium card if you don’t mind paying more than PHP 2,000 every year for the added perks. But if you really don’t have the budget for it, don’t force it and stick with a regular credit card instead.
Aside from annual fees, here are some credit card fees you need to consider.
- Finance Charge – applies when you carry over a balance from the previous month.
- Cash Advance Fee – applies when you withdraw money using your credit card
- Late Payment Fee – applies when you make a late payment for your balance
- Over-the-Limit Fee – applies when you exceeded your credit limit
- Foreign Transaction Fee – applies when you make purchases outside the country
Step 3: Consider your lifestyle and expenses.
If you’re confident that you can pay your monthly balances in full and you don’t have any existing debt, then you’re good to go! The next step is to narrow down your choices to cards that fit your lifestyle and spending habits. Choose a credit card that offers the best rewards for the things you pay or purchase most often.
For example, if you travel a lot for business or leisure, choose an air miles or frequent flyer credit card. Every time you purchase a ticket, you’ll get points that you can then exchange for free flights.
Read more: The Perks of Using Credit Cards for Travel
Step 4: Compare credit cards.
At this point, you should have a clear idea of what you need in a credit card. You should have also eliminated cards that don’t meet your criteria. To find the best credit card within your chosen card type, compare the cards you’ve shortlisted based on your needs, budget, lifestyle, and spending habits.
This step may be the most time-consuming step of them all, but it’s also the most important. It will be even more time-consuming if you do the comparing manually. Perhaps you want to make the search a lot easier when you do it online.
This is where online comparison platforms like Moneymax come in. Instead of checking bank websites one by one, you can just let Moneymax do the comparing for you. Just head to the website and tell us what you’re looking for. In a matter of seconds, the online comparison platform will instantly show you all the credit cards that fit your criteria.
The tool also allows you to compare credit cards according to benefits, credit card fees, and eligibility requirements. You can even refine your search further by customizing your search filters. It’s that easy!
Using Moneymax’s free online comparison tool will guarantee you an impartial, independent, and apples-to-apples comparison of the best credit cards in the Philippines. Say goodbye to making phone calls and visiting a branch or two just to gather info. It will just take precious time out of your schedule, especially if you’re a busy professional.
Read more: Best Credit Cards for Gadget Shopping in the Philippines
Step 5: Choose the one with the highest overall value.
Did you find the perfect credit card from the previous step? Then proceed with your application. But if you’re still torn between two or three cards that share many similarities, look closely for the differences. Remember that your ultimate goal is to find the best credit card that provides the most value.
And don’t even think about applying for two credit cards at once, especially if you’re applying for the first time. You really have to decide which one to choose. Here are some of the clinchers you need to consider to help you pick the winner.
- Home Bank Account. It’s more convenient to pay your credit card bills with a bank where you already have an account. It’s also easier to qualify for a card that way.
- Non-Expiry Rewards. If your final two or three choices are all rewards cards, the one that doesn’t have an expiration date is clearly the best credit card.
- C0-Branded Credit Cards. For rewards credit cards, the clincher could be the retailer or mall that the issuing bank has a partnership with.
- Waived Annual Fees. This feature may seem insignificant, but it can help ease your budget for the first year of using the card. Some cards even waive their annual fees for life if you meet certain conditions.
Read more: 8 Best Credit Cards for Shopping in the Philippines
Find the Best Credit Card in the Philippines with Moneymax!
Choosing the best credit card is one of the most important financial decisions you’ll ever make. Don’t start a credit card application until you’ve found the perfect card for you. Shop around, do your research, and compare your options.
How to pick the best credit card, you ask? With the help of Moneymax! Use our free comparison platform to compare credit cards across different banks in the Philippines. Moneymax will assist you in every step until you score the best credit card. And what’s more, our services are free! Start comparing today with Moneymax!
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