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Credit Cards in the Philippines

Credit cards may be a norm that almost everyone knows today, but it actually wasn’t until 1948 when the first form of the modern credit card was issued by the Biggins Bank in the United States. Since then, other financial institutions and banks have launched their own versions of credit cards — even reaching far-flung countries like the Philippines due to western influence and expansion.

Today, there are many different types of credit cards that are available in the Philippines, including but not limited to personal, prepaid, and business credit cards. Most major financial institutions have at least one type of card to offer their customers – all coming with varying rates, fees, benefits, and terms and conditions. 

Choosing the best credit card in the Philippines requires careful consideration of the elements stated above. But before we delve into the nitty-gritty details about your credit card options in the Philippines, it would be useful to understand the nature of credit cards and how they work. 
 

How do credit cards work?

Credit cards give people access to a credit limit that works like a loan. It permits you to take as much credit as you want under the allowable credit limit and gives you the chance to reuse that “loan” again and again as long as you pay back the amount you’ve borrowed. 

As soon as you swipe your credit card to make a purchase, your credit card issuer will give feedback on your merchant’s credit card terminal if you have available credit. If it is approved, you can immediately finalize the transaction.

Each month, your credit card bill will be delivered, with a minimum amount set to be paid by a set deadline. If you fail to pay the amount in full or pay less than the minimum amount, you will be charged interest. This added amount is called a finance charge – an additional payment based on your outstanding balance and current interest rate. 

Let’s say you have a PHP40,000 credit limit. If you borrow PHP20,000 and fail to pay that back given the set deadline, it will start to accumulate interest. Your PHP20,000 will be multiplied at the interest rate that your bank has given to you and it will continue to grow as long as you fail to pay back the amount you borrowed plus the interest. 

Types of Credit Card

Before choosing the best credit card option for yourself, you need to know a little more about the different types available. Here are some of the most common credit cards you can find in the Philippines today:

Basic Credit Cards

With a basic credit card, you are given a credit limit – the maximum amount of credit that you can lend from the financial institution you applied for. You are free to spend this amount as you choose, whether through online or in-store merchants, as long as they are connected with the card.

Payments for your spending will depend on the card, but usually, they come with a minimum amount each month that you have to pay back. Whatever isn’t paid by the due date will accrue interests, and this amount varies as well. Some of the BSP-regulated credit cards in the Philippines that you should look into are BDO, BPI, Metrobank, Citibank, HSBC, UnionBank, Security Bank, and PNB. 

Prepaid Credit Cards

A prepaid credit card or cash card allows you to deposit credit into the card; thus, giving you the ability to control your budget for spending. It is one that you might give as a gift to someone or use yourself for a certain amount of money. With this type of card, there is no need to sign up for a bank account as you can acquire them for one-time use and or load money into it. Prepaid cash cards are usually connected to networks such as Visa or MasterCard, which make them ideal for travel and online purchases, or use for day-to-day expenses. 

If you’re looking for the top prepaid credit cards in the Philippines, you might want to look into the Visa Debit Card by LandBank, Prepaid MasterCard by PSBank, Prepaid Visa Card by EastWest Bank, and Cash Card MasterCard by BDO. 

Specialty Credit Cards

Sometimes, it’s better to get a credit card that’s for a specific purpose. Specialty credit cards target certain groups of people and give them perks that might suit their type of spending. Two common types are business cards and student cards.

A business credit card is targeted for business owners and might offer perks that appeal to their needs. They are used for corporate purposes and have benefits like fuel discounts for company cars or points awarded for stationary and office related purchases. They can help a business get better credit standing and consolidate their spending efforts to the one account. Some of the popular business credit cards in the Philippines are BDO MasterCard/ Visa Corporate Card, BPI Corporate MasterCard, and PNB Multi-Corporate Card. 

Student credit cards are targeted at students over 18 years old. They are usually free or low charge to set up and come with better interest rates or interest-free periods but lower limits. To qualify, you’ll need to prove that you are a student and may still need to prove some credit history. These are a great way to build up your credit score if you are responsible with spending.

Rewards Cards

Rewards credit cards are specifically created to give the spender rewards for their purchases and may give back certain points or discounts for however much money you spend. They usually focus on specific types of spending like flights or fuel, while some financial institutions partner with certain merchants to offer discounts and freebies.

Some of the top rewards credit cards that people subscribe to in the Philippines are the Metrobank Travel Platinum Visa, UnionBank Miles + Platinum Visa, Citibank PremierMiles Visa, and BDO ShopMore MasterCard.

Low-Interest credit card

A low-interest credit card is one that offers a lower interest rate, better suited to people who don’t intend on paying the balance off in full each month. Compared to other cards, they don’t have a lot of perks or promotions and are generally about creating a ‘no frills’ approach to a credit card.

Secured

For people who have bad credit, you may be eligible for a secured credit card. This relies on some other form of collateral that you put up, like a property or vehicle, in exchange for the credit offered by a financial institution. Perhaps some of the most known secured credit cards in the Philippines are AUB Secured Credit Card, BPI Express Start, and Metrobank Save and Swipe. 

Balance Transfer

A balance transfer credit card usually comes with a zero percent interest rate for the first six or 12 months. The purpose of these is for customers to be able to transfer the entire balance from another card onto the new one and try to pay off the new balance while no interest is being charged. Where these lenders make money is people failing to pay off the balance and ending up with a lot of interest charged.

Airline Miles

One of the most popular perks that credit card companies offer is airline miles or points. This means that a credit card company or financial institution has partnered up with a specific airline or more than one, and when you make purchases with your card, you can accrue points or miles to be used towards flights and travel.

Some credit cards offer quite generous rewards with airline miles, but they come with conditions like minimum spending amounts. If you know that you can meet the minimum spending amount, they can be a great way to earn yourself free travel around the world including flights, dining, and accommodation.

Some of the best credit cards with mileage benefits in the Philippines are the PNB Jaguar Platinum MasterCard, BDO Visa Classic, UnionBank Gold Card, Metrobank WorldMastercard, and more.

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Cashback credit cards

A cashback credit card, as its name suggests, gives people cashback points for every X amount they spend using the credit card. Partner merchants like supermarkets, utility companies, and gas companies will provide percent discounts that credit card owners can avail until they reach the upper limit of their cashback total. 

Let’s say the cashback credit card you have earns you one point for every PHP20 you spend and it also gives you 4%