The Quick and Easy Guide to Credit Cards in the Philippines. And How to Choose One For Your Lifestyle
Suck at money? Congrats. You’re part of the 99 percent of people in their 20s floundering when it comes to finance. Adulting is hard, and money is harder—especially when it’s your own and not your parents. My Two Cents is here to break down everything you need to know about finance, business, and entrepreneurship. We’ll tackle all the basics, from how to get a business permit to how to invest in stocks, to educate the fledgling adults on how to not go broke.
Welcome to the idiot’s guide to money. Ninth lesson: a crash course on credit cards in the Philippines.
Before you get excited at the prospect of throwing money at your heart’s desire, credit cards aren’t the ticket to free and unlimited shopping. Credit cards work by borrowing money from the company to purchase something within a limit that’s set. The money you borrowed has to be paid back in full by the deadline that’s given or you’ll have to pay interest on late payments. It’s not a freebie—it’s like a loan.
Unlike a debit card that only lets you spend whatever’s in your bank account, a credit card lets you spend what you don’t have. So temptation is real, and it’s usually what sends people deep into credit card debt.
Why you need one
If you can avoid the risks, the benefits certainly outweigh those of a debit card. For one, not a lot of places in the Philippines accept debit cards for payments. In fact, most places are more likely to accept cashless payments via apps like GCash or Alipay than debit cards, but almost every store accepts cash and credit. Many cards also come with rewards, rebates, discounts, travel points, grocery points, and more.
In serious situations, a credit card allows you to pay for an emergency, in case you end up in the hospital, and pay large amounts in installments, in case your hospital bills rack up from the emergency.
And in terms of long-term financial goals, credit cards are your best bet to building good credit that will make you eligible for future car or house loans. Credit is a balance sheet of your late or on-time credit card payments, and it’s essentially the trust you build with credit card companies and potentially loan companies. Credit is the way to prove you’re a financially responsible person, which will help you later on down the road if you plan to buy a house, apartment, car, or take out a loan to start a business.
Who can get one
The first thing to consider before you get a credit card is if you’re cut out for it in the first place. A credit card is designed for the disciplined, people who can manage money and pay on time, and aren’t easily seduced by every sale they see.
That’s why the screening process for certain cards is far stricter than others and many top-tier credit cards are hard to obtain.
The next thing to consider is if your lifestyle fits the credit card you want. Some credit cards are designed to help you get more frequent flyer miles while others make online shopping more convenient. Low card limits are good for people looking to pay for their groceries in advance, while high limits are good for people who need to make regular down payments on cars, tech, etc.
Another is whether you’re comfortable with the fees that come with a card, like annual fees, monthly interest rates, transfer rates, cash advance fees, etc. Some people prefer cards that come with high annual fees but low monthly rates, while others prefer zero annual fees and high monthly interest rates.
It’s all a matter of lifestyle.
Which one to get
Here are some credit cards in the Philippines we recommend for each lifestyle.
For avid travelers, we recommend the Metrobank Travel Platinum Visa. Every P17 spent awards you one frequent flyer mile for all airline and hotel bookings. The first supplementary card comes for free, cardholders get membership to exclusive airport lounges, and the card comes with travel insurance of up to P5 million. The annual fee is free for the first year, then increased to P5,000 for every following year. Meanwhile, the monthly interest rate is 3.5 percent.
For those prioritizing cashbacks, we recommend the Security Bank Complete Cashback Mastercard, which offers rebates on groceries, gas, utilities, dining, and shopping. The annual membership fee is P3,000 per year with an interest rate of 3.5 percent.
Meanwhile, for avid online shoppers, one of the best cards out there is the Robinsons Bank DOS Mastercard, which allows you to split your purchases into two-month installments with no interest or minimum amount required. That means you don’t have to pay in full right away—you can pay only half per month. There’s no annual fee, but the interest rate is 3.5 percent.
For credit card rookies and overall newbie adults, we highly recommend the Citi Simplicity+ Credit Card, particularly for those who have never had a credit card before. The card comes with no annual fees, no late payment fees, and no over-limit fees. Plus, if you pay back on time, you get 10 percent back on interest charges. It also comes with flight and hotel packages and discounts on dining deals. The interest rate is 3.5 percent, and you need a minimum annual salary of P250,000 to be eligible.
One more thing Esquire recommends: This credit card search tool by iMoney Philippines. Fill out the quiz and compare the credit cards best suited for you to narrow down all the credit cards in the Philippines.