When applying for a credit card in the Philippines, your financial situation will determine the type of card you choose. You should, however, consider the rewards your preferred credit card offers as you compare different variants. You can make an informed decision about what is best for your needs if you understand the qualifications, benefits, and features of each type of card.

What is a credit card?

Credit cards are a great way to get the things you want without paying upfront. With a card, it is easier to make payments on time. Plus, it is a way to build credit. Credit cards allow you to earn rewards points and spend those points on other purchases; this helps build up your credit history over time, which will help with future borrowing decisions.

How can I borrow a loan using a credit card?

You can borrow a loan using a credit card by applying to the lender of your choice. Most lenders will require you to have an income. You may also need proof that you have been employed with your employer for at least 90 days before applying for the loan or updated bank statements to show that your business is making profits. If you meet these requirements, then it is likely that you will be approved for your loan request. If you want to use a credit card to borrow money, here are some things you should consider:

• How much are you able to afford? If you're trying to pay off debts or make huge purchases, it might be best to try to find a lower interest rate on your loan to avoid bad credit scores.

• What kind of credit score do you have? If your score is low, it might not be worth getting a high limit on credit.

• How much time do you have? You should also consider how long it will take before your loan is paid back and what interest rates each lender offers.

How to choose the best credit card

While we all know that many factors go into choosing the right plastic credit, it's also important to remember that sometimes, the simplest things can make or break your decision. Here are some of the most important things you should consider before choosing your first credit card:

• How you'll use the card. Are you going to use it primarily for convenience, or are you planning on making purchases with it? If so, what kinds of things do you plan on buying? Is this a secured credit card?

• Lifestyle rewards. What kind of rewards do you get with this card? Do they offer points toward travel or gift cards? If so, how long do those points take to earn? Do you like the idea of getting rewards for using your credit card? What are the maximum rewards you can get?

• Card features. What features does this card offer? How many times can you use your card monthly without incurring an annual fee? Is there a specific limit on how much you can spend each month without paying an annual fee? What's the minimum spending amount required before earning rewards? What services does this card provide, like fraud protection? Are there foreign transaction fees? What are the bonus categories? How are the monthly installments paid? Do you earn cash rewards? Do you need a savings account before the credit card is approved?

• Other features. Does the card allow on time minimum payments?

• Fees. Do any fees come with using this particular card? How much interest is charged each month? Does the lender offer a fixed monthly plan fee?

The best credit cards in the Philippines

There are numerous credit cards to choose from, depending on your lifestyle, needs, and desires. Because credit cards are about convenience, the best credit card should make paying off your purchases easy. It should also keep track of your finances without causing too much trouble. It doesn't matter if you're a student or a business owner — you want a credit card that does its job well and makes your life easier. The following are the best credit cards based on their categories.

Rewards credit card

The best reward credit cards offer great benefits such as no annual fee, high points per peso spent at specific retailers, and bonus points when you make purchases in particular categories. However, a rewards credit card that has a high annual fee might not be worth it if you don't travel often enough to earn enough points for a free flight or hotel stay. Citi Rewards Mastercard offered by Citibank is a world-elite Mastercard that offers a rewards program with points that never expire. You can use it for online shopping or food delivery. You can also apply for this card if you do not have a security deposit account to redeem rewards, but there is a ₱2,500 annual fee after the first year.

When you dine out or travel with approved American Airlines, you can earn three times more bonus points. You gain one point for every ₱30 you also spend. You also accumulate points that may be exchanged for gift cards or cash back.

Qualifications

• You must be at least 21 years old.

• You must be a Filipino or foreign resident with a valid billing address in the Philippines.

• You must have a minimum yearly gross income of ₱180,000 if this is a supplemental card or ₱250,000 if not.

• You must have proof of employment showing your salary issued within the last two months.

• You must have your most recent income tax return if you are self-employed.

Travel credit cards

If you travel frequently and spend a lot of money, get a credit card that offers air miles. When you use your travel credit card long enough and accumulate bonus points, you may get free travel insurance, frequent flier miles, airport lounges, and reduced foreign transaction fees. With this card, you'll be able to travel to a couple of locations on your bucket list for less money. An example of such a card is RCBC Bankard Gold Card. As you pay your bills, you earn non-expiring rewards but at a ₱3,000 annual fee if this is your primary card and ₱1,500 for a supplementary card. You can only start redeeming your reward points if they are over 3,300, which is equal to ₱500.

With this card, you will receive complimentary budgeting tools, access to the Skyview airport lounge, and complimentary travel insurance (Travel Plus Lite). You will also receive non-expiring awards for your purchases. Bonus points can also be redeemed for air miles, cash rebates, shopping vouchers, cash credit to your RCBC Bankard, bank transfer to your RCBC bank account, or charitable donations. When you charge all of your overseas travel expenses to your card, you also enjoy purchase protection.

Qualifications

• You must be between the ages of 21 and 65.

• You must have a working contact number

• You must have a yearly gross income of at least ₱250,000 to be considered.

• You must be a Filipino citizen or have lived in the Philippines for at least two years.

• You must have a valid ID with a photo and signature, such as a passport, UMID, or driver's license.

Co-branded credit cards

If you are loyal to a particular brand, using a co-branded credit card can help you maximize rewards while lowering expenditures on your purchases. Banks issue these cards in collaboration with shopping centers, airlines, oil corporations, car dealerships, chain restaurants, clothing stores, colleges, alumni associations, and nonprofit organizations. A good example of such a card is AirAsia Credit Card by RCBC Bankard. You gain reward points each time you fly with AirAsia. A welcome bonus of up to 8,000 AirAsia points is available if you spend at least ₱20,000 during the first 60 days of receiving the card. You will only be able to redeem the sign up bonus once, and it will not be convertible to cash. If it is the primary card, the annual fee is ₱3600; if it is a secondary card, it is ₱1800.

AirAsia rewards you with points for every ₱22 you spend. AirAsia points can also be redeemed for free flights or vouchers from Lazada, SM Gift Pass, and Grab. Priority boarding, check-in, and Xpress baggage are also available, and your level is automatically elevated to Freedom Flyer Platinum.

Qualifications

• You must be between 21 and 65 years old.

• You must have a valid phone number.

• You must have a yearly gross income of at least ₱250,000 per year,

• You must be a Filipino citizen or have spent at least two years in the Philippines.

• You must have a legitimate I.D. with a photo and signature, such as a driver's license.

Low-interest cards

If you're looking for a way to save money, using low interest credit cards is one of the ways to do it. Using a low-interest or 0% credit card can pay off your balance over time without worrying about credit card interest charges. Low-interest cards offer the lowest interest rates on the market, depending on the card and how much you spend each month. These are designed for people who want to pay off their balances faster than they would with other types of cards but still want an affordable rate. An example of such service is AUB Gold MasterCard. The AUB Gold Mastercard allows you to schedule when you want to pay your bill so that you don't have to pay it on a day when you don't have enough money. Not only do you get waived the annual fee, but you also get to spend your money on purchases at no interest.

You choose when to pay and receive one reward point for every ₱50 spent. You may also connect to foreign payment options like AliPay and PayPal easily. You also receive additional benefits like as reward points and Mabuhay miles, with each ₱425 spent on shopping earning you one mile. You will also receive free access to airport lounges such as Sky View, Pacific Club, and Pagss Premium when traveling. You can also sign up for as many additional cards as you want with no annual fee.

Qualifications

1. You must be between the ages of 21 and 65.

2. You must earn at least ₱601,000 in gross annual income (GAI).

3. If you are employed, you must have been with a recognized organization for at least one year.

4. If you are self-employed, you must have a registered business functioning profitably for at least one year.

5. If you are a licensed professional, you must have been in practice for at least one year.

6. You must have an active phone number and email address.

Business credit cards

If you're a business owner, finding the right credit card is crucial. The best business credit cards offer flexible terms and rewards that benefit your company. It's also essential to ensure your card has no hidden fees or other unexpected costs. An example of such a card is BDO Mastercard Corporate Card. Because it is a credit card with company-guaranteed liabilities, businesses utilize it for legitimate business spending. Examples of allowable expenses include travel, entertainment, office supplies, and other fees incurred by the organization to oversee spending better and minimize employee spending.

This card can be used to pay for business expenses anywhere Mastercard is accepted. You also receive free insurance against discomfort and harm when traveling. Utility costs, such as energy, phone, and Internet service, can be combined and simplified with the rest of the business's expenses. You can also manage your cash flow by converting all transactions to your billing currency right away. The card can also be used in over 24 million locations across 160 countries. You can get cash advances from ATMs all across the world because you have a longer credit term because the payment is due 25 days after the cutoff.

College student credit cards

If you're applying for a credit card as a student, there are some factors to consider. You must ensure that any costs associated with your application will not be prohibitively expensive over the course of the year. If you're going to pay an annual fee, use the card to get a variety of bonuses or benefits. It could be cashback, travel points, or gift cards. You should also check to see if your student card will incur a foreign transaction fee if you travel abroad.An example of a good student card is HSBC Red Mastercard. You can apply for this MasterCard International Incorporated if you also have a locally issued primary credit card that is at least 12 months old.

Qualifications

• Valid Philippine ID and other official documents, such as a driver's license.

• A valid form of identification, which must have a photo and the date of birth, such as a passport, driver's license, or SSS ID.

• Utility bills over the past three months must match the permanent and primary addresses.

Benefits and features. You can take advantage of its unique benefits, such as interest-free buying and free purchase protection. When you shop online, eat out, or spend money abroad, you can earn up to 4x rewards points for every $20 spent. You can redeem benefits for GCash and air miles, and HSBC waive the annual fee for the first year.

Balance transfer credit cards

A credit card with a balance transfer feature is useful for managing your debt. You can refinance a portion of your current debt at a new, cheaper rate. It also simplifies settling your current debt and making payments on the new one. However, the credit card issuer will impose higher rates on you if you skip payments or don't pay off your balance by the deadline. Make sure to pay off your statement as soon as it is issued each time to avoid this issue. Enquire with the bank about their policy regarding late payments and balances after processing your statement for more than 30 days.

An example of this card type is Security Bank 0% balance transfer. You can transfer your other credit card balance at no added charges, but it is only valid for online applications. With this balance transfer credit card, you do not qualify for cashback and click cards, and it is not open for any member-get-member referral programs. The offer is valid for a 0% balance transfer fee for 60 days from the date the eligible card was approved. The Security Bank must also verify and approve the transaction.You can pay off your debt faster by transferring it to a low-interest credit card. You can accomplish this by minimizing the time it takes to repay the credit, spending less, and reaping the benefits of a new credit card.

Qualifications

• You must own a primary Security Bank credit card.

• Your credit history with Security Bank, as well as other banks and credit card issuers, must be good.

• The qualifying balance transfers must be within the range of ₱10,000–₱30,000 and not exceed 50% of the cardholder's credit limit.

• The approved total balance transfer amount cannot be greater than the credit limit offered by Security Bank.

Shopping and online shoppers

Shopping and online shoppers credit cards are a great way to get the most out of your everyday purchases at different grocery stores . They can help you save money even on other eligible purchases, earn rewards for your loyalty, and even give you access to special perks like free shipping, extra discounts at an eligible delivery service.One of the best cards offered in this category is UnionBank Lazada credit card. You get 6X more Lazada Credits as you shop when using your UnionBank Lazada Credit Card at Lazada. You also earn credits that you can transfer to your Lazada Wallet and enjoy discounts as well as access to exclusive sales.

For every ₱200 spent on Lazada purchases and bill payments, you will receive six Lazada Credits, and for every ₱200 spent on all other items and transactions, you will receive one Lazada Credit. You will receive 50 free shipping vouchers each month. Lazada will provide you a ₱500 discount certificate; however, your UnionBank accounts must be current and active. With your newly authorized credit card, you receive 5,000 Lazada credits for free. The first year's annual fee is waived, and you will be charged ₱500 in discount vouchers for five Lazada sales throughout the year.

Qualifications

• You must be between the ages of 21 and 65.

• You must show proof of income.

• You must show proof of identity, such as a valid ID with a photo and signature.

• You must earn at least ₱30,000 per month.

How to apply for a credit card

If you are looking to apply for a credit card, here are some tips on how to do it. First, choose a card with no annual fee, low interest, or a 0% interest installment plan. Look at the card's benefits and find one that matches what you need, like rewards or cashback. Then, compare rates and fees before choosing a card. Go through the application process online, so you don't have to go into the bank. Lastly, read all terms and conditions before signing up for an account.

Pre-qualification

• You must be of legal age.

• You must have a valid Philippine or international driver's license and also provide proof of residency.

• You must have a working cell phone number that you can be reached on, as well as an email address.

• You should have a stable income source.

Application

1. Go to your preferred bank's website, click Log in, and enter your credentials.

2. Select Credit Card from the menu.

3. Fill out the application form, including your details and contact information.

4. Upload copies of supporting documents (e.g., proof of income).

5. Complete the application process by clicking Submit.

Who is eligible for a credit card loan?

Credit cards are a great financial tool but can also be dangerous if you don't use them responsibly. Before applying for a credit card, it's essential to know who is eligible for a credit card loan and how to ensure you're getting one right for your needs. But here are some general guidelines in the Philippines:

• You must be at least 18 years old.

• You must have a bank account to pay off the monthly balance.

• You must submit valid identification and proof of income.

How to repay a credit card loan debt

You can repay your credit card debt online, by mail, or in person at the lender's branch. To repay online, you must have your credit card loan information ready because you will need it while logging in. Here are the steps to repay a credit loan online:

1. Go to your bank's website.

2. Log in to your account.

3. Click Pay Bills or Payments to make a payment online.

4. Look for the option to pay a credit card bill.

5. Fill out all the required information about your credit card company.

6. Click Submit.

Pros and cons of using a credit card

You should always research a credit card before you use it. You can find out a lot about a card by searching for it online, reading reviews from other users, and comparing its features to other cards. There are pros and cons of using a credit card, just like any other financial decision. Before you decide whether to use your card, make sure you consider both sides of the coin.

Pros

• You can build your credit history by paying your bills on time, which will help you get loans or buy a home later.

• You can build up a good credit score, which means that financial institutions will be more likely to lend you money in the future.

• You can earn rewards points when you make purchases with the card, like gift cards or airline miles.

• You can use it anywhere in the world without an ATM fee.

Cons

• You must pay interest on purchases made with the card unless you pay your credit card balance in full each month.

• If someone steals your wallet and uses your card information without permission to buy things online or at stores, they will still be able to use those purchases without paying back the money owed to you first.

• The interest rates are higher than other types of loans, which means the credit card will cost you more in the long run.

• Your payment history is tied to your bank account, so your credit score will be affected if you don't make payments as expected.

• Most plastic credit cards have an annual fee.

Legal regulation of the credit card loan market in the Philippines

The Securities and Exchange Commission (SEC) and the Bangko Sentral ng Pilipinas (BSP) regulate the credit card industry in the Philippines.

• The Bangko Sentral ng Pilipinas (BSP). The BSP regulates the credit card loan market, which includes issuing guidelines on how lending companies should conduct their operations and ensuring that they comply with all applicable laws. Furthermore, they have rules requiring all lenders operating within their borders to maintain adequate capital reserves and business plans to continue making loans without defaulting on any terms they have been made available for use by consumers or businesses alike.

• Securities and Exchange Commission (SEC). The SEC takes action against companies in violation of the laws governing the credit card loan market, as well as those failing to meet the BSP's requirements. It includes companies that make loans without adequate capital reserves or business plans to ensure they can meet their obligations.

The real cost of a credit card loan

The real cost of a credit card loan is reflected in the interest you pay while using a credit card. That's because the interest rate on your loan dictates how much you'll end up paying in the long run. You'll be hit with fees and additional interest charges if you don't pay off your monthly balance. Here are some factors you need to keep in mind in order not to incur a high credit card loan:

• Understand the fees. A credit card comes with several expenses, such as overdraft, late, balance transfer, cash advance, finance charges, foreign transaction fee, and annual fees.

• Understand your income. If you don't know what you earn and spend, it's hard to make wise financial decisions. You can use a budget calculator to see where your money is going every month.

• Use your rewards wisely. When you don't want to use cash, rewards cards can be a great way to save money, but they also have fees and interest that can add up quickly if you aren't careful.

• Stick to a budget. It will help you save money by preventing you from using your credit card for unplanned purchases.

Conclusion

When you apply for a credit card, it is important that you choose the best one since this will directly affect your finances and your credit history. If you do not pay off the amount you charge in time, your credit score will be impacted and cost extra money. If you pay off the amount before the due date, then you can get rewards or cash back as your reward.