Credit cards in the Philippines: types and features of registration

Now that more and more Filipinos are switching to cashless payment, the credit card is no longer just a status symbol, but an objective necessity. Credit cards make payments more convenient, safe, and economical when used correctly. Many cardholders don’t go into debt, but instead enjoy benefits such as greater flexibility in managing their finances, discounts, and rewards. 

Credit cards are a financial tool that provides cardholders with a credit limit. A credit limit acts like a loan, and you can borrow as much money as you want within that limit, as long as you repay within a certain time frame. Each month, your bank will send you a credit card bill along with a minimum amount to pay, which is usually 3% to 10% of your total bill.

Paying your credit card balance on time can give you many benefits. It will improve your credit rating, which in turn will help you apply for new financial products and get higher credit limits, avoid late payment penalties and keep your credit account in good standing.

What types of credit cards are available in the Philippines?

There are many types of credit cards in the Philippines, each with its own characteristics. Here are just a few of the most common types:

Shopping credit cards offer discounts and exclusive deals for in-store or online purchases. More often than not, these promotions are run by certain brands.

Rewards credit cards offer incentives in the form of various rewards, such as reward points.

Credit cards with cashback are most suitable for thrifty shoppers. That’s because you can use the discounts on this card to pay off your credit card balance. 

Air Mile credit cards allow you to earn air miles for every purchase you make with your credit card. So if you plan to travel a lot, such a card will allow you to use air miles on your airfare purchases.

Travel credit cards offer exclusive travel privileges in addition to accumulating airline miles. The usual perks include free travel insurance, access to the airport lounge, and others.

Credit cards with no annual fee are ideal for people who don’t want the added hassle of owning one.

Most cardholders in the Philippines use them to pay for groceries and services, utility bills, and airline tickets. However, some cardholders use them to build a good credit score and receive credit card rewards. Be sure to apply for a credit card that fits your lifestyle so that you can make the most of it.

General requirements for obtaining a credit card

  • A Filipino citizen or a foreigner residing in the Philippines
  • At least 21 years of age
  • Valid landline or cell phone number
  • At least 1 year of permanent employment status or at least 2 years of profitable business for self-employed
  • Minimum gross annual income of £120,000 or more.

What documents do I need to apply for a credit card in the Philippines?

Before you begin the process of applying for a credit card in the Philippines, make sure you have all the necessary documents. The exact requirements may vary from bank to bank, but these are the most common:

  • Completed and signed credit card application form
  • Valid photo ID and signature of credit card applicant

Working applicants:

  • Latest BIR Form 2316.
  • Certificate of Employment
  • Recent pay stubs up to 3 months old
  • Self-employed applicants
  • Latest BIR Form 1701.
  • Most recent financial statements

Foreign residents:

  • Alien registration certificate or 
  • Immigrant Registration Certificate.
  • Work Permit.

How do I apply for a credit card in the Philippines?

You can apply in person at a bank branch or apply online at the website of the bank of your choice.

  1. Choose the most appropriate credit card for your needs, lifestyle and budget.
  2. Go to the nearest branch of the bank of your choice.
  3. There you will be asked to fill out and sign an application form.
  4. You will need to provide photocopies of the necessary documents. Bank staff may ask to see the originals for verification.

Processing a credit card application, which includes a credit history check, can take two to three weeks. Feel free to contact your bank for further action or check the status of your credit card application online. Once approved, your new credit card will be delivered to your home or business address.

Be sure to compare credit cards and their rates, benefits and other features before submitting your credit card application. 

How do I get approved for a credit card?

You can increase your chances of getting a credit card if you keep these helpful tips in mind:

  1. Pay off outstanding debts

When you apply for a credit card, you’re essentially borrowing money, which means it’s best to pay off any outstanding debts. Make a good impression on credit card providers by proving that you are a responsible person who can maintain a good credit rating.

  1. Prove that you have a stable source of income

You may be under the impression that a large salary guarantees easy approval of your credit card application. This is true to some extent, but in reality, banks are checking to see how stable your income is.

You can prove that you have a stable source of income by providing a Certificate of Employment for working applicants and a Business Registration and ITR for self-employed applicants.

  1. Open a savings account

This step is great for those without a steady source of income, especially freelancers and students. Open a savings account at the bank where you plan to apply for a credit card so you can easily get approved for a secured credit card.

  1. Read the requirements

Before you apply for a credit card online, make sure you are eligible. Familiarize yourself with all the requirements and be prepared for any additional documents the bank may ask you for. Do your best and prepare documents that you think can help you get approved.

  1. Choose a cheaper credit card

If you are applying for a cheaper credit card, there is a good chance that the requirements will also be much easier. Aim for a credit card that your budget can support. If possible, compare credit cards with lower interest rates or no annual fees.

How long does it take to process a credit card application?

It depends on the bank you applied to. Some banks may take one to two weeks to process your application. Some banks can take three to five days to review your documents, while virtual credit cards like Metrobank ON Virtual Mastercard can be processed in as little as 48 hours.

How do banks in the Philippines determine credit card limits?

Banks perform credit evaluations when deciding on an applicant’s credit limit. To accurately determine your creditworthiness, banks consider many factors, such as your income, credit history, and debt-to-income ratio.

What credit card fees should you be aware of?

Credit cards have associated fees, but you can avoid some of them if you use your credit card responsibly. Here are the most common fees you should be aware of before applying for a credit card online:

  •  Annual Fee – the annual fee for using your credit card.
  •  Finance Charge – the interest rate added to your credit card charges.
  •  Delinquency Fee – an extra charge for late payments on your credit card
  • Over Limit Fee – a payment when you max out your credit card.
  • Cash Disbursement Fee – an extra charge for cash disbursements.

What to do after getting a credit card?

  • Activate your credit card. Your new card comes with instructions on how to activate your credit card. This is usually by calling the bank’s hotline or sending a text message.
  • Sign the back of your card. This is done for your own safety.
  • Tie your credit card to your banking app. Track your credit card transactions and view your monthly payment statements on the go with your preferred banking app. You can also schedule credit card payments online so you don’t miss a due date.
  • Familiarize yourself with the terms and conditions. Check out the credit limit, rewards and other benefits, as well as the annual fee, financing fee, and other credit card fees.

What happens if you don’t pay your credit card bills?

If you do, you can easily accumulate credit card debt. If you miss a payment, your unpaid balance will go on to the next payment cycle, which will then include a finance charge and late payment fee. It can also lead to a bad credit history, jeopardizing your chances of getting a new credit card. You’ll end up losing your credit card privileges.

What is the best credit card in the Philippines?

There is no one-size-fits-all answer to this question. That’s because there is no one credit card that fits all. Your choice, among other things, will depend on your budget, needs, lifestyle, shopping habits, priorities and preferences. Take these important factors into consideration to choose the best credit card in the Philippines.

3 factors to consider when choosing the best credit card for you

  1. Minimum income and other requirements

Examine the documentation requirements for the credit cards you are considering. For example, if you earn less than the minimum income requirement for a particular card you like, the bank probably won’t approve your application.

  1. Fees and payments on credit cards

Pay special attention to annual fees, late payment fees, and over limit fees. If you plan to use your credit card abroad, you should also pay attention to transaction fees in foreign currencies.

These credit card fees may not seem like much, but they will add up over time. To avoid overpaying, compare the fees of different credit cards and choose the one that offers the best terms with the lowest fees. Ideally, get a lifetime credit card with no annual fee in the Philippines – this can save you up to £6,000 a year.

  1. Credit card rewards, cashback and other perks

Look for credit cards that offer the most attractive offers, such as rewards, discounts, and free services for the categories you spend the most on, such as restaurants, groceries, fuel, online shopping, and more.

The best credit cards in the Philippines for beginners. TOP 5

Citi Simplicity+ card

Citibank is making credit card ownership easy for newbies with the Simplicity+ card. This beginner-friendly card has no annual fees, no late fees, and no fees for exceeding your limit.

  • Annual fee: no annual fee for life
  • Interest rate: 3%
  • Minimum monthly income requirements:
  • To start: 20 833,33 ₱
  • For current cardholders: ₱15,000
  • Other requirements:
  •  21 years of age or older
  • Valid landline or mobile number
  • Valid TIN, SSS, GSIS or UMID number
BPI Edge Mastercard

If you’re looking for a credit card with low income requirements, low annual fees and flexible installment plans, the BPI Edge Mastercard credit card is a smart choice for beginners.

  • Annual fee: ₱ 1320 (free for the first year)
  • Interest rate: 3%
  • Required minimum monthly income: ₱ 15,000
  • Other requirements:
  • 21 to 60 years of age
  • Any official ID
  • Original certificate of employment and income (COEI)
  • Original 2 months’ payroll
Classic Mastercard AUB

All annual fees on AUB credit cards are waived for life. But the Classic Mastercard and Easy Mastercard are the easiest to own because of their lower income requirements. They are also the most flexible in terms of frequency of monthly payments, payment term and minimum amount payable.

  • Annual fee: no annual fee for life
  •  Interest rate: 3%
  •  Minimum monthly income: ₱21,000
  • Other requirements:
  •  21 to 65 years of age
  •  Cell phone number and home or work landline number
  • Active email address
  •  At least one year of continuous employment status/profitable business/professional practice
Metrobank M Free Mastercard

The Metrobank M Free Mastercard, a credit card from one of the major banks in the Philippines with lifetime annual fee waivers and low income requirements, is available for newcomers.

  •  Annual fee: no annual fee for life
  •  Interest rate: 3%
  •  Required minimum monthly income: £72,250.
Citi Rewards Bonus Card

Points earned with the Citi Rewards Card have no expiration date, so you can accumulate them until you want to use your rewards.

  • Rate of reward:
  • 1 point for every 30 ₱ spent
  • 3 times the points for purchases and lunches
  •  Annual fee: ₱ 2,500 (free for the first year)
  •  Interest rate: 3%
  • Minimum monthly income requirements:
  •  For new cardholders: £20,833.33.
  • For existing cardholders: ₱15,000.