There are a whole lot of advantages of credit card. Credit cards have been in use since the 1950s, but in this day and age where almost everything has been digitalized, credit cards have proven their convenience throughout our daily lives. Personally, I find that having a credit card makes me more confident to go out. First, let’s start with a list of advantages you can benefit from when you get a credit card:

Perks depending on the bank you choose

The perks you get depend on the type of your credit card, credit card limit and your bank rewards. This is the most exciting and unique advantages of credit card. There are a wide variety of perks you can claim from your chosen bank.

Reward Points

Whenever you swipe your credit card to purchase items whether in-store or online, you earn reward points. The value of these reward points vary from each bank. You can use these in exchange for:

Gift certificates and vouchers
Air miles
Pay for your purchases at select online stores
Pay for your credit card bills
Exclusive deals for events, concert tickets and the likes
And more, depending on your bank

For example, in BPI Real Thrills Rewards, you earn 1 Real Thrills Reward Point for every P35 charged to your BPI Blue, Gold and eCredit MasterCard. For BPI Edge Mastercard, Corporate Classic and Corporate MasterCard, you earn 1 Real Thrills Reward Point for every P50 spent.

With these reward points, you can even pay for your MasterCard membership fees. As of July 2021 for example, in BPI, you can use 18,000 Real Thrills Reward Points to pay for a full membership fee for a Blue MasterCard. Maybe you want to use your reward points in National Bookstore, no problem! Just save up 18,000 Real Thrills Reward Points for a P1,000 gift certificate.

The number of reward points you get also depends on the type of card you own. You can always check your reward points on the billing statement you received every month. Be on the lookout for promos during special event from the likes of Shopee and Lazada shopping.

These reward points programs change over time, so be sure to check the website of your bank for a list of gift certificates and vouchers you can redeem before using your reward points.

Gift certificates and vouchers

There are so many things you can redeem from gift certificates and vouchers in exchange for a certain amount of points. From food to services, these are the biggest perks you can get in my opinion. Most of the gift certificates are big discounts for select stores like gas stations, malls, grocery stores, restaurants and more.

The vouchers give you things for free. It is super exciting when you get to redeem free food and services. Some premium card owners can even get free VIP access to airport lounges and discounts for hotel accommodations.

In some big retail stores, when you pay a minimum amount, they offer installments with 0% interest. This is another great perk.

You won’t have to line up at the ATM anymore

The advantages of credit card frees you from the hassle of having to line up at ATM machines. The problem with ATM machines is that there is a limit to how much you can withdraw and transaction fees for

In the Philippines, you can only withdraw Php 10,000 to Php 20,000 at a time depending on your bank. Other local banks have increase there withdrawal limit. Like with BPI ATM Debit Card, you can now increase your withdrawal limit up to Php 100,000 in a day.

When you have a credit card, you can spend more than that without having to carry so much cash, which leads us to our third advantage.

Lessened risk of theft and robbery

Because you are not carrying around so much cash, there is less of a possibility that you will be a victim of theft.

When your cash gets stolen, there is no way of getting it back without catching the thief, but when your credit card gets stolen, all you have to do is call and report it to the bank to disable your credit card and your money is secured. Each bank has there own hotline number,

Online Shopping

Linking your credit card to online shopping apps makes the whole experience much more convenient. With your credit card, it is easier to pay rather than having to go to the bank to deposit cash. There is a whole array of advantages you can get from using your credit card in online shopping.

You can link your credit card to online apps that sell a wide range of products, fashion retail shops, groceries or food delivery services like GrabFood, Food Panda, Shopee, Lazada, Zalora, etc. This makes checking out a lot easier while you sit back and relax at home. You can also pay in installment if you meet the minimum amount and if you have a credit card of the participating bank.

If you need to pay for products, your credit card will automatically charge it to your account. With your credit card, you can even shop at international shopping platforms like Amazon, eBay or Alibaba as well.

There are a lot of different platforms you can shop at if you have a credit card. This is one of the best advantages you can get from having one.

What is a cashback credit card?

Cashback credit cards are also called rebate credit cards. It is a type of credit card that allows you to earn cash rebates depending on your bank. Your card will determine how much and where you need to spend to earn a certain amount of rebates.

The Citi Cashback Card for example, offers 6% cashback on all purchases, while other cards only offer cashback on dining, fuel, clothing, etc. in select stores. The rebates you earn depend greatly on the agreement of your cashback card and bank.

The maximum amount you can earn from rebates is P1,000 per cycle. You can earn more rebates at the start of the next cycle, which is every month.

Enroll Utility Bills

You can pay your utility and mobile phone bills through your credit card. This is so much easier than having to go to a bayad center where the lines are endless. Even better, you will not have to bring your cash and bills with you.

Some banks offer rebates or cashback for a minimum purchase amount so utilize each promotions to your advantage to save more on your bills.

Traveling perks

When traveling, you can pay for your hotel accommodations and reservations in advance using your credit card. This is very useful especially when traveling overseas where you cannot bring a lot of money with you. Depending on your bank and credit card type, you can also get exclusive discounts and free VIP access to airport lounges.

Air miles

When you spend money at certain airline companies, you get reward points called air miles. You can redeem free flights and vouchers using these air miles, so if you love to travel, you will get a lot of benefits from air miles.

In some banks, you can also exchange reward points to air miles, so you can get even more vouchers and gift certificates. More benefits!

Assurance in the event of an emergency

One of the advantages of credit card is useful for medical emergencies in instances where you do not have cash with you. Not everyone carries around a lot of cash with them, so when they have medical emergencies, they cannot pay their medical bills.

Having your credit card on hand is the best way to have assurance when situations arise. Private hospital like St. Lukes, Medical City, Makati Medical Center, will normally ask for a downpayment whenver you or your family member is admitted in emergency or ICU.

More secure than debit cards

In terms of fraud, credit cards are a lot more secure than debit cards. When you use your debit card, the money is deducted directly from your bank account, so if your debit card gets stolen, it is a lot harder to prove that you were not the one who spent the money.

Even if your credit card got charge for suspcious for example, your currently staying in the Philippines and someone from the United States, used your card to book an Uber, you know that this is fraudulent transaction since there’s no Uber in the Philippines. Bank has the capibility to refund the transaction and blocked the credit card for further transaction. Moreso, it will be hard to get your money back

Keeps track of your purchases

Your credit card bill also serves as a track record for your monthly expenses. This helps you keep track of how much you spend with essential and non-essential items. A good way to help minimize spending and stay on a budget.

You can use free budget app available in both App Store of Apple and Google. This way you have a virtual understanding of your expenses and where the majority of your purchases are categorize. You can then prioritize the following month the items that you only need.

Keeps your credit track clean for future loans

If you pay your credit card bills on time, this keeps your credit track clean and it’s more likely for your applications for loans to be approved. Banks assess you based on your ability to pay your bills on time.

One overdue payment can leave a mark in your credit track and this lessens your chance of being approved for a loan. That is why it is very important to keep your credit card payment history squeaky clean.

How to Get a Credit Card

Every bank has different requirements when applying for a credit card, so here are the things you need to know:

Most banks would require you to be at least 18 or 21 years old before you are allowed to apply for a credit card.
They will ask for valid IDs.
Most banks require a minimum amount of income before you are allowed to apply for a credit card.
They will ask for an active landline or mobile number.
All banks listed here have an interest rate of 2%.
Some banks waive the annual fee for the first year.
Some banks will ask for a filled out application form.

When getting a credit card, there are a few things you might want to consider. These include:

Low annual fee
Low monthly income requirement
Perks

Low annual fee

You might not notice, but your annual fee will contribute a lot to your credit card bill. Choose a card that offers low annual fee or ideally, the ones that offer no annual fees for life.

If you meet certain criteria, you can ask your bank to waive your annual fees, they’ll gladly do that as long your account is on good standing.

Low monthly income requirement

If you are on your first job as a fresh graduate and you are not that far off yet, it’s best to apply for credit cards with low monthly income requirements.

Perks

It will not give you as many perks as a premium card, but you can still choose which one you would like to benefit from. These can be perks like travel, dining or shopping.

VISA and Mastercard

These two credit cards are accepted worldwide. If you plan on traveling with credit instead of cash, you might want to consider getting a VISA or Mastercard. They’re widely-used in the Philippines as well.

Credit Card Application

Here is a brief description of credit card requirements from the easiest banks you can apply to:

Citibank
- Age requirement: 21 years old
- Required monthly income: P20,833
- Annual fee: None
- Valid SSS, GSIS, TIN or UMID number
- Certificate of employment, payslip/ITF or bank statement of payroll showing one-month salary

Does not require a deposit account. Takes about 5-7 days to verify your submitted documents. The easiest card to get.

HSBC
- Age requirement: 18 years old
- Required monthly income: P17,000
- Annual fee: P1,500
- Two valid IDs
- Latest ITR
- 3 months latest payslips
- Existing credit card owned for 12 months

Though you need to have an existing credit card, it’s a lot easier to apply for this card even if you have a low income.

EastWest
- Age requirement: 21 years old
- Required monthly income: P10,000
- Annual fee: P1,400
- Address of your home or office
- Application form
- Certificate of employment, ITR, 3 months latest payslips or latest financial statements

EastWest waives the annual fee for the first year for new credit card holders.

Security Bank
- Age requirement: 21 years old
- Required monthly income: P15,000
- Annual fee: P2,000
- Employee for 1 year or self-employed for 3 years
- Valid ID
- Certificate of employment, 3 months latest payslip, ITR and DTI or SEC registration papers

PNB
- Age requirement: 21 years old
- Required monthly income: P10,000
- Annual fee: P300
- Employee for 1 year or self-employed for 3 years
- Valid ID
- Certificate of employment, 3 months latest payslip, ITR and DTI or SEC registration papers

PNB waives the annual fee for the first year for new credit card holders. Has a very low annual fee and required monthly income.

BPI
- Age requirement: 21 years old
- Required monthly income: P15,000
- Annual fee: P1,000
- Certificate of employment, 2 months latest payslip, ITR, latest financial statements

RCBC
- Age requirement: 21 years old
- Required monthly income: None
- Annual fee: Regular – P60 per month, Premium – P150 per month
- Valid IDs
- Savings account with at least P10,000
- Application form
- Savings account opening form
- Deed of assignment form

You don’t need any financial documents to get this card, just a savings account with P10,000. This is an ideal card for students and freelancers. RCBC waives the annual fee for the first year for new credit card holders.

When getting a credit card, you should settle any of your existing debts first. This provides you with a good credit score and gives you a higher chance of your application being accepted. You should also make sure that you have all the requirements you need before applying for a credit card. It’s more likely for your application to be accepted on the first try when you have every requirement you need because it shows that you are a responsible person. Banks assess you based on your ability to pay enough and on time as mentioned before.

What are secured credit cards?

Secured credit cards have the same use as normal credit cards. The only difference is that you need to open a savings account. You will also need a hold-out deposit. This acts as collateral in case you cannot make payments. The amount you put in your hold-out deposit determines the amount of your credit limit, so the higher the deposit, the higher the limit. Most banks require your hold-out deposit to have a minimum of P10,000.

You will still need to make monthly payments, but you are allowed to pay using unused funds from your hold-out deposit. Make sure you manage your spending, if you use up all the money in your hold-out deposit, you cannot use your card anymore. This will also result in a bad credit track.

A secured credit card is for you if:

You do not have proof of stable income.
Need a higher credit limit.
You have bad or no credit history.
Need to improve or build a credit history.

With a secured credit card, documents proving your financial status are not required. Your credit limit is also much more predictable because it is determined by the amount of your hold-out deposit. 80-90% of your hold-out deposit is your credit limit. This is very convenient if you need to have a high credit limit.

If you have a bad credit history, you can still get a secured credit card. You can also use a secured credit card if you want to build your credit history for future loans or if you have plans on getting a normal credit card.

How banks determine your credit limit

The bank determines your credit limit based on your credit track and your monthly income. This is why it is of utmost importance to maintain a clean credit track. It helps your credit limit go higher. Your monthly income is also considered by the bank. They need to make sure that you are earning enough to pay your credit card bills, so they cannot give you a credit limit above your monthly income.

Final words

With a credit card, the possibilities are endless. It gives you financial freedom. Just make sure to use your credit card responsibly and pay your bills on time. In my personal experience, going out shopping, specifically in a mall, without my credit card, makes me feel bad and less confident because you see a lot of things you cannot buy when you are short of cash.

It is like walking into a donut shop while you are on a diet. Devastating, I know. With a credit card, you will not have to feel the way I did.