The credit card market in the Philippines is experiencing significant growth.
At the 2024 TransUnion Financial Services Summit held in Hong Kong last July 2024, it was revealed that the number of credit cards in circulation increased from 9.3 million in 2022 to 11.2 million in 2023.
Yet, many people still feel intimidated by credit cards.
Some equate them directly with debt, others don’t see the need for one, and a few are daunted by the requirements needed to secure one.
While these concerns aren’t entirely unfounded, understanding how a credit card works can help you make it work to your advantage.
Being a cardholder can unlock a range of benefits that you simply won’t get if you rely solely on cash.
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CREDIT-CARD BENEFITS
When applying for a credit card, it's best to apply based on your needs.
This is because consistent usage earns you more reward points, and the higher you earn, the more perks you can get.
REWARDS AND PERKS
For instance, this author got to travel for free, thanks to Metrobank Travel Platinum Visa, which converted purchases to equivalent air miles.
To give you an idea, here's how it currently works:
- Every 17-peso airline, accomodations, and foreign currency spend = 1 mile
- Every 50-peso purchase = 1 mile
Some of its travel promos even include visa application. So convenient, right?
Meanwhile, BPI Platinum Mastercard offers zero-percent installment (up to six months) on airline tickets, and can also give you access to airport lounges worldwide.
If you’re into health and wellness, the Unionbank Mercury Drug Card might be a perfect fit for you.
Its standout feature is the "5X Rewards Points" on purchases of vitamins, supplements, and other pharmacy essentials, as well as gym memberships and spa treatments.
Anything related to a healthier lifestyle earns you five points—currently the highest in the market.
It also comes with perks, like free annual physical exams and ambulance services.
When it comes to installment options, BPI and BDO have year-round partnerships with a wide range of establishments.
BPI offers the S.I.P. (Special Installment Plan), which allows for 24-month installment terms.
As a cardholder, you’ll receive regular emails detailing participating stores.
BPI also provides the 100% Bonus Madness Limit, effectively doubling your credit limit for large purchases.
For instance, if your credit limit is PHP300,000 and it’s already maxed out, this benefit gives you an additional PHP300,000 credit limit for installment purchases.
BDO offers exclusive installment deals with popular merchants like Ikea, Lazada, and Decathlon.
For motorists, Metrobank’s Toyota Mastercard is attractive.
It offers a 3% rebate at Petron stations, with fuel rebates of up to PHP15,000 annually, plus a 10% discount on parts, accessories, and labor at all Toyota dealers.
SHOP OR BUY NOW, PAY LATER
Metrobank, BPI, Unionbank, BDO, and most credit card companies offer a promo that allows you to delay payments for up to three months.
When shopping in store, simply ask the cashier if your card is eligible for this promotion.
If you’re purchasing online, the payment page should display this option if available.
CASHBACK
Metrobank, Unionbank, HSBC, Security Bank, RCBC, EastWest, Maybank, and others offer cash rebate programs.
As someone who uses a credit card like cash, this author earns up to PHP1,500 in rebates per month.
The amount varies depending on your spending and monthly purchases.
Redeeming your cashback is easy and can be done through a mobile app or a quick phone call to the customer service hotline.
HUGE DiSCOUNTS FROM RESTAURANTS, STORES, HOTELS, ETC.
Each month, cardholders receive enticing promotions and offers from various establishments.
Here are a few examples: 50% off at a renowned steak restaurant, PHP30,000 off any purchase of Apple products, and $100 off on Amazon.
Aside from these, there are also exclusive sales from high-end brands available only to cardholders.
WAIVED ANNUAL FEES
As a cardholder, you'll be charged an annual fee ranging from PHP2,000 to PHP5,000, depending on your card type, whether you use it or not.
However, you may be able to have this fee waived.
Some credit card companies include this option in their rewards programs. If your points meet the required threshold, you can request that your bank use them to cover the annual fee.
Additionally, some cards, like the Unionbank Mercury Drug card, offer no annual fees for life.
When applying for a new card or considering a second one, be sure to ask the salesperson if the annual fee can be waived.
HOW YOU CAN MAXIMIZE THE CREDIT CARD BENEFITS
Whether you're a first-time applicant or a cardholder seeking a second card, conducting quick research before you even apply can make a big difference.
CHOOSE A CARD THAT SUITS YOUR LIFESTYLE
Here are key points to consider:
-
Do the rewards align with your spending habits?
For example, if you frequently spend on groceries, look for cards that offer higher rewards on grocery purchases, along with perks like free delivery and discounts. -
Compare points and cashback offers.
Investigate merchant partnerships. If you’re a frequent traveler, find out which credit card companies provide the best travel-related offers and promotions. A quick visit to their websites and social media accounts can be very helpful. -
Check the welcome gifts.
USE THE CARD
You’ll only fully enjoy the benefits of your credit card if you use it regularly.
Don’t miss out on the promotions and deals available to you.
Many cardholders receive updates via email, mobile notifications, or messaging apps.
Credit card companies also often send alerts when they double points or announce offers with merchants.
Additionally, they provide perks for birthdays and special occasions.
For instance, this author usually get a free airport transfer as part of a hotel promo availed of using the credit card, which results in savings of over $200.
NOTE THE IMPORTANT DETAILS
There are three key details to keep in mind: the due date, the statement date, and the minimum amount due.
The due date is typically the same each month, and it's essential to make your payment by this date to avoid finance and late-payment charges.
Equally important is to ensure that you pay the full amount due.
Even a small amount like seven pesos can incur late-payment charges, which this author experienced upon rounding off the total and paying less than what was due. Although the charge was reversed, a considerable amount of time spent calling customer service and waiting until the next billing cycle to rectify the error.
Meanwhile, the statement date can vary depending on the number of days in the month. Billing cycles typically range from 28 to 31 days.
Smart cardholders find this date useful for budgeting their credit card expenses.
For example, if your statement date usually falls on the 19th and your spending has reached your budget limit, you can plan to make your next purchase on the 20th or later to avoid impacting the current month's bill.
The minimum amount due is an option for those who can’t pay the total amount owed.
To avoid additional late-payment charges, make sure to settle at least the minimum amount due.
But keep in mind that when you fail to pay in full, the remaining balance is subject to interest and charges. When these pile up, they can quickly outweigh any benefits you would have received.
This is why it's very important to spend within your means. Be sure to set a budget and stick to it.
Remember, maintaining good standing as a cardholder improves your credit score.
This not only increases your credit limit but also enhances your ability to make big purchases.
This author knows someone who purchased a car with her credit card, and the process took her less than 30 minutes. Yes, it really can be that easy and fast when you are in good standing with your bank!
With these smart moves, you can swipe away your worries and swipe your way to savings.