How Do Credit Card Companies Make Money in the Philippines?

Rouselle Isla

Rouselle Isla

Last updated January 15, 2024

How do credit card companies make money? Do credit card companies make money if you pay in full? And how much money do they earn from credit cards? 

If you’re a credit cardholder, these questions probably popped into your head at some point. After all, they're important if you want to be a responsible credit card user. This article explains how credit card companies make money and how your transactions contribute to it.

How Do Credit Card Companies Make Money?

Credit card providers generate profits and sustain their business through the following charges:

💸 Interest

The first and arguably most obvious way banks profit from their credit card customers is from interest, particularly on missed or late payments. It’s where the majority of their revenue comes from.

But it doesn’t mean their systems are designed to trick cardholders. Credit card issuers offer automatic payments and send out reminders ahead of due dates to help their cardholders avoid debt.

💸 Credit Card Merchant Fees in the Philippines

how do credit card companies make money - credit card merchant fees in the philippines

When consumers pay for something with their credit card, a portion of this purchase is split by credit card interchange fees. The retailer gets a part of this, while the bulk of the amount goes to the bank that issued the card to you (such as BPI or HSBC).

Another portion goes to the association that manages your account (Visa, MasterCard, etc.). For instance, Mastercard charges a fee on credit card issuers based on their gross dollar volume of account holder activity.[1] It also earns from switched transaction fees on authorization, clearing, and settlement, just to name a few.

There are also interchange fees that affect merchants more than the cardholder. These are fees that the merchant's bank account must pay whenever a customer uses a credit or debit card to pay for purchases from their store. They’re paid to the card-issuing bank to cover handling, fraud, and bad debt costs and the risk involved in approving the payment.[2]

💸 Consumer Fees

These are generally categorized as fees associated with a credit card’s maintenance or additional features, such as the following:

  • Annual fees
  • Cash advance fees
  • Balance transfer fees
  • Late fees
  • Foreign transaction fees

While these fees vary with every credit card and issuer, anyone looking to get a credit card should read the fine print, especially regarding the cash advance and balance transfer facilities.

How to Reduce Your Credit Card Fees and Costs

how do credit card companies make money - how to reduce fees and costs

Without their customers, credit card issuers naturally won’t make any profits. You can control how much money they make from you by avoiding the extra fees or costs. Here are ways to do it:

✔️ Get a Credit Card with No Annual Fee

Annual fees are essentially membership fees, as they allow a cardholder to use the credit card’s facilities, such as rewards and cashback programs. Depending on the credit card, annual fees in the Philippines can range from ₱1,000 to as much as ₱6,000. If you get a credit card without an annual fee, that’s already thousands of pesos in savings.

So shop around for credit cards with no annual fee or those that offer waived annual fees when you meet the spending requirement. Compare your options below and apply through Moneymax:

Credit Cards with No Annual Fee Key Features and Benefits
UnionBank Rewards Credit Card*
UnionBank Rewards Credit Card
UnionBank Rewards Credit Card
  • Monthly income requirement: ₱15,000
  • Interest rate: 3%
  • 3x points when you shop and dine here and abroad
  • 1 rewards point per ₱30 spend

* No annual fee promo until March 31, 2024

Metrobank Titanium Mastercard®*
METROBANK TITANIUM MASTERCARD
Metrobank Titanium Mastercard
  • Monthly income requirement: ₱15,000
  • Interest rate: 3%
  • 1 rewards point for every ₱20 spend

*Waived annual fee for the first year

Metrobank Platinum Mastercard®*
metrobank platinum
Metrobank Platinum Mastercard
  • Monthly income requirement: ₱58,333
  • Interest rate: 3%
  • 1 rewards point for every ₱20 spend
  • Up to 50% off on premium dining offers

*Waived annual fee for the first year

Metrobank World Mastercard®*
Metrobank World MasterCard
Metrobank World MasterCard
  • Monthly income requirement: ₱333,333
  • Interest rate: 3%
  • 1 rewards point for every ₱20 spend
  • 2x points for international purchases

*Waived annual fee for the first year

PNB Ze-Lo Mastercard
PNB Ze-Lo Mastercard
COMPARE NOW - PNB Ze-Lo Mastercard
  • Monthly income requirement: ₱10,000
  • Interest rate: 2.5%
  • No late payment or overlimit fees
AUB Classic Mastercard
aub classic
AUB Classic Mastercard
  • Monthly income requirement: ₱50,000
  • Interest rate: 3%
  • 1 rewards point for every ₱50 spend
AUB Easy Mastercard
aub easy
AUB Easy Mastercard
  • Monthly income requirement: ₱50,000
  • Interest rate: 3%
  • Flexible credit card payment due date

🎁 Free Gift from Moneymax: Marshall Emberton, Dolce Gusto Genio S Plus, Apple AirPods 2, Samsung Galaxy Buds FE, or Giftaway Cash Credits

moneymax unionbank credit card welcome gift

Eligible card: Any UnionBank credit card 

Promo period: Until June 30, 2024

Get a Marshall Emberton worth ₱9,990, Dolce Gusto Genio S Plus worth ₱8,699, Apple AirPods 2 worth ₱8,490, Samsung Galaxy Buds FE worth ₱5,490, or Giftaway cash credits worth ₱4,000! Just apply for any UnionBank credit card via Moneymax, get approved within the promo period, and then meet the ₱10,000 spend requirement within 60 days from your card approval date.

This Moneymax UnionBank welcome gift promo runs until June 30, 2024 only.

Per DTI Fair Trade Permit No. FTEB-192101 Series of 2024. Terms and conditions apply.

Per DTI Fair Trade Permit No. FTEB-193077 Series of 2024. Terms and conditions apply.

Per DTI Fair Trade Permit No. FTEB-193104 Series of 2024. Terms and conditions apply.

Note: The promo is exclusive to carded applicants who do not have an existing principal credit card issued by UnionBank and/or Citi.


✔️ Pay Your Credit Card Balance in Full

When you pay your balance in full, you avoid interest charges every month. Credit card companies charge interest if you carry your balance to the next month. This means you’re paying your unpaid balance plus interest. As much as possible, try to settle it in full every month.

✔️ Find a Credit Card With Low or No Interest Rates

Most credit cards in the Philippines bear an interest rate of 3%. Some, however, offer lower rates, such as this card:

PNB Ze-Lo Mastercard

PNB Ze-Lo Mastercard
  • Waived annual fees
  • 0% installment for up to 24 months at select PNB-affiliated merchants 

You can also consider credit cards with 0% interest installment payment terms:

Credit Card Installment Benefits
Metrobank Platinum Mastercard®
metrobank PLATINUM MASTERCARD
APPLY NOW
0% interest installment plans
Metrobank Titanium Mastercard® 
METROBANK TITANIUM MASTERCARD
APPLY NOW
0% interest installment plans of up to 24 months
HSBC Red Mastercard
hsbc red
APPLY NOW
0% interest installment at all participating merchants with flexible payment schemes of up to 36 months
BPI Edge Card
BPI Edge
APPLY NOW
Multiple installment options: 0% installment, Buy Now Pay Later, Bonus Madness Limit (additional installment limit)
HSBC Premier Mastercard
hsbc premier mastercard
COMPARE NOW
  • 0% interest on purchases with terms of up to 36 months
  • Cash installment plans at low interest rates

This will help you finance your purchases without having to set aside a budget for sky-high interest rates as well. 

Read more: Save More: Credit Cards with No Interest or the Lowest Interest Rate


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moneymax metrobank credit card promo - giftaway egift dolce gusto piccolo xs xiaomi redmi bluetooth soundbar

Eligible cards: Metrobank Titanium Mastercard®, Platinum Mastercard®, and World Mastercard®

Promo period: Until May 31, 2024

How do you get a Metrobank credit card welcome gift? Simple! Just apply and get approved for any eligible card through the Moneymax website.

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Per DTI Fair Trade Permit No. FTEB-191118 Series of 2024. Terms and conditions apply.

Note: Applicant must be an existing credit cardholder in good standing for at least nine months.


✔️ Get a Cashback Credit Card

With a cashback credit card, a percentage of your money spent is given back to you. Most providers offer cashback for specific categories, such as groceries, dining, shopping, or fuel. Depending on your chosen credit card, you can save up to ₱12,000 annually through cashback.

See some of your best options below:

Credit Card Cashback Rates
HSBC Gold Visa Cashback
hsbc gold visa cashback
APPLY NOW
  • 5% cashback on dining transactions
  • 0.50% cashback on all other transactions
  • 6% rebate on the first Caltex transaction; 3% on Caltex fuel purchases year-round
HSBC Platinum Visa Rebate
HSBC VISA PLATINUM
APPLY-NOW
  • 5% rebate on travel and shopping spend 
  • 1% rebate on insurance
  • 0.50% rebate on all other spend
  • 6% rebate on the first Caltex transaction; 3% on Caltex fuel purchases year-round
Security Bank Complete Cashback Mastercard
Security Bank Complete Cashback Platinum Mastercard
APPLY NOW
  • 5% cashback on groceries, 4% on gas, 3% on utilities, and 2% on dining
  • As much as ₱12,000 cashback annually 
Petron BPI Card
Petron BPI Card
petron bpi
  • 3% fuel rebate at Petron
  • Maximum fuel rebate of ₱15,000 per year
BPI Amore Cashback Card
BPI Amore Cashback Card
bpi amore cashback
  • 4% cashback on supermarkets and department stores
  • 1% cashback on drug stores and utilities
  • 0.3% cashback on other local spend
BPI Amore Platinum Cashback Card
BPI Amore Platinum Cashback Card
bpi amore platinum cashback
  • 4% cashback on restaurants and online food delivery services
  • 1% cashback on supermarkets and department stores
  • 0.3% cashback on other local and international spend

Read more: Earn Cashback and Points With the Best Credit Card for Groceries

Wondering how credit card companies make money on cashback?

Cashback programs incentivize credit card users so that they’ll use their cards more often. The more they use their credit cards, the more merchant fees credit card companies can earn. Make sure to use your card wisely so you can maximize its benefits but avoid overspending. 


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moneymax hsbc credit card promo

Eligible cards: HSBC Red Mastercard, Gold Visa Cash Back, and Platinum Visa Rebate

Promo period: Until June 30, 2024

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✔️ Avoid Late Fees

Late fee charges are one of the biggest reasons you should pay on or before your due date. Credit card companies charge high late fees on top of your total amount due.

Avoid paying the hefty late charges by automating your payments and setting up electronic alerts. This way, you’ll get notified when your next credit card payment is coming up.

✔️ Set Up an Emergency Fund

how do credit card companies make money - set up emergency fund

Aside from late payments, your credit card company earns every time you make a cash advance. You get charged a 3% to 5% cash advance fee, which can be significant if you borrow a considerable amount.

Don’t make it a habit to withdraw cash from your credit card whenever there’s an emergency expense. Instead, set up an emergency fund to cover unplanned expenses. This way, you won’t be in debt from costly cash advance fees.

✔️ Choose a Credit Card with No Balance Transfer Fees

Planning to get another credit card to pay off your existing balance? If you’re getting weighed down by high interest rates on your credit card balance, you can transfer your balance to a new credit card.

Compare your options and get one with the lowest balance transfer fees. Some banks also offer zero interest rates as an introductory promo. Below, find the right credit card so you can maximize its money-saving benefits:

Credit Card Balance Transfer Features
UnionBank Platinum Mastercard
unionbank platinum mastercard
bpi edge card
  • Balance transfer rate: 1%
  • Installment terms: 3 to 36 months
  • Minimum balance transfer amount: ₱3,000
Metrobank Titanium Mastercard® 
METROBANK TITANIUM MASTERCARD
APPLY NOW
  • Balance transfer rate: 1%
  • Installment terms: 3 to 60 months
  • Minimum balance transfer amount: ₱6,000
HSBC Red Mastercard
hsbc red
APPLY NOW
  • Balance transfer rate: Prevailing monthly interest rate, depending on the chosen repayment period
  • Installment terms: Up to 24 months
  • Minimum balance transfer amount: Monthly installment amount of ₱500
Security Bank Gold Mastercard
Gold_Contactless_2022-2026-1
APPLY NOW
  • Balance transfer rate: 1% throughout the installment term
  • Installment terms: 3 to 24 months
  • Minimum balance transfer amount: ₱5,000 (must not exceed credit limit and the outstanding balance)
BPI Edge Card
BPI Edge
bpi edge card
  • Balance transfer rate: 0.99% (36 months) / 1% (6 to 24 months)
  • Installment terms: 6 to 36 months
  • Minimum balance transfer amount: ₱3,000

🎁 Free Gift from Moneymax: ₱2,500 eGift, JBL Bluetooth Speaker, or JBL Wireless Earbuds

security bank welcome gift - egift jbl horizon 2 jbl wave beam true wireless

Eligible cards: Select Security Bank credit cards:

Promo period: Until May 31, 2024

Want a credit card from Security Bank? You're in for a treat if you apply and get approved for an eligible card through Moneymax and meet the minimum spend requirement. Pick your free Security Bank welcome gift: a ₱2,500 Giftaway eGift voucher, a JBL Horizon 2 Bluetooth Clock Radio Speaker worth ₱5,354, or JBL Wave Beam True Wireless Earbuds worth ₱3,799.

This Moneymax Security Bank Giftaway/JBL Horizon 2/JBL Wave Beam credit card promo runs until May 31, 2024 only. Apply now!

Per DTI Fair Trade Permit No. FTEB-191158 Series of 2024.  Terms and conditions apply


Final Thoughts

Credit cards are convenient tools when used correctly and responsibly. Otherwise, it can land you in a cycle of debt that's difficult to get out of.

Now that you know how credit card companies make money, use your card wisely. You can minimize how much they make off you and maximize your card's benefits by avoiding certain fees and charges.

Compare credit cards with MoneymaxSources:

Rouselle has over eight years of writing experience in the personal finance niche. She has written feature stories, articles, and how-to guides on various personal finance and trending lifestyle topics. Before that, she briefly worked in banking and was a licensed life insurance advisor. When not writing, Rouselle likes to read books and binge-watch films and series. Follow Rouselle on Linkedin.

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