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Credit Card Tips

There are two kinds of people in the world: credit card holders and non-credit card holders. I used to think I don’t need a card and I can live off with a debit card if bringing cold cash in my pocket around Manila is the only issue. But then I hear about tito and tita who get credit card perks such as special discounts in restaurants and gift vouchers in retail stores for shopping. Then there’s mama who gets cashback and rebates for using her card for our monthly supermarket trips.

I mean, all I need to do is use it wisely so I don’t end up in debt. Right?


CREDIT CARD PERKS


Say goodbye to queues and outdated systems

Expenses come in different forms such as the monthly water, cable, telephone, mobile and electric bills. There are also other kinds of bills like tuition fees (yes, we can now pay tuition with credit cards but it is limited to a few schools and universities). All these financial obligations require you to line up for hours in complicated labyrinths queues. On top of that, some companies who provide these services do not have the capacity to receive high volume of payers due to what seems to be DOS-based systems.

If you want it easier, connect your card to your main account and allow automated billing. 


Get access to a pre-approved personal loan

Say you need cash right now but your salary is not expected until a week later. Where will you get money? If you look into credit card perks, most banks allow cash advance, which is sort of like a personal loan except there is no processing needed and you won’t have to worry about whether the bank will approve or reject your application. To get a cash advance, go to the nearest ATM and withdraw cash using your card. Easy and fast! But keep in mind, this service has an interest rate which may be higher (from 2% to as high as 3.54%) than getting an actual personal loan with a lower interest rate (at about 1.25% fixed interest rate).

Unless it's an emergency, opt to go for the personal loan than the cash advance to save on fees. If you compare credit card benefits, you'll find that some popular banks have higher fees than lesser-known banks.


Enjoy exclusive credit card perks

How many times have you seen promos and installment plan options and they’re only for credit card holders? I’ve always dreamed of going to Broadway in New York, but you know, #priorities. So when Wicked came to Manila in 2014, I saw how expensive the cheapest ticket costs at about ₱4000, which will land you in the farthest end of the theatre. But wait, I later found out that Visa holders offered a 10% discount if you purchase a ticket using any Visa card. If only I had one, right?


CREDIT CARD RISKS

End up in credit card debt 

Banko Sentral ng Pilipinas says that the total amount of debt from credit cards in our country is a whopping ₱157 billion. Billion. Billion (in scary fading echo).

That’s partly because people do not compare credit card benefits first before applying for one. Agents are everywhere in malls nowadays and it’s difficult to steer away from that mob with free umbrellas and pens who make you sign up in the instant! We’re not saying they’re bad people. But if you sign up with them right away, you might end up with a card that doesn’t fit your exact needs. This is where GoBear becomes helpful because we compare credit card benefits and risks, and show you everything you need to know about the card, including interest rates and exactly how much rebate or points you get for every peso credited. It’s always a good idea to “shop around” on the internet before making a purchase.


On-time payment or high-interest fees

Banks charge from 2.8% to 3.5% interest rate per month, but most big banks are in the higher end of that spectrum. Say you bought a 1-horse powered air condition unit at ₱19,000 and on a 0% interest rate promo from the appliance store. When the billing statement came in, you can only pay the minimum amount of your credit bill. On the next billing cycle, you paid the minimum credit again and placed another interest on the remaining balance, enlarging your credit card debt.

Paying only the minimum amount means allowing the bank to charge you more than what you spent on the AC unit in the first place. When the interest rates start kicking in, you ignore it at first because it's a relatively small amount, not realizing that if you keep on running the card on interest rates, you put more credit card risks on yourself, you will soon end up with disturbing phone calls from the bank.


The inevitable annual fee

Most cards still run on annual fees, which is between ₱1,000 for entry-level or regular cards to Php5,000 for gold/platinum cards. Sometimes, banks waive your first annual fee. Other banks, like AUB do not have annual fees but they don't follow the points system for rewards either.

In many cases, if you are a good credit card holder (meaning, you pay your credit card debt on time and over the minimum amount), you can request the bank to waive it forever. But that doesn't always happen.

An application for a credit card in the Philippines takes 7 to 10 processing days, or so they say. Sure it’s cool to finally have that plastic. But it’s a year-long commitment, at least, that you need to think about seriously. Read the fine print and be a responsible card holder.


Need an easy way to compare credit card perks in the Philippines? Compare credit cards with GoBear to search and instantly pull up important data like annual fees, rates and perks.