Like many other countries, credit cards have become commonplace in our country for a long time now. Among other things, Philippine-based credit cards include travel benefits, rewards, and credit building tools.

If you are keen on getting a credit card but new to the game, negotiating the terrain might seem daunting. From how to get a credit card and use it sensibly all the way to maximizing its advantages, we will address everything in this all-encompassing guide. 

How to get credit card for first timers

A credit card can open a whole new world of financial opportunities

Some of the following key steps easily makes the application process for a credit card in the Philippines smooth:

  1. Know your creditworthiness

Banks and other financial institutions evaluate potential cardholders based on their debt-to-income ratio, income, employment status, and credit history. Your chances of qualifying rely heavily on good credit history, especially regular payments on prior obligations on other credit systems or loans.

To increase your chances of getting approved for a credit card, having a regular income and low debt-to-income ratio boosts your application. 

  1. Research and choose a credit card

There is a wide range of credit cards for different lifestyles and expenditure patterns. It helps to compare annual fees, interest rates, and reward programs (and in some cases, access to airport lounges or trip insurance) in order to identify a card that fits your financial needs and spending pattern.

Should your trip frequency be somewhat high, the ideal travel points or miles card would be the best fit. The best cash back card should be factored in as well so you can take advantage of incentives through regular purchases. 

  1. Gather all documents required

Once you settle on some of the credit cards from your list of preferences, gather the required paperwork that the issuing bank or other financial organization accepts. This usually encompasses the following:

  • One (1) valid government-issued ID
  • proof of income such as income tax returns, or pay stubs
  • Utility bills as proof of residency or
  • Three (3) months latest bank statement

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  1. Submit your application

Alternatively, you may apply online or at a branch of an issuing bank. Make sure to fill out the application form fully and accurately enter all information about you. Ensure you go through your application in order to correct any mistakes or discrepancies that will make you take more than you expect while applying.

  1. Wait for issuance and approval of a card

The bank or financial institution will analyze your credit worthiness when you apply. The review procedure typically takes a few days to a week. Should your application be approved, you will receive a call or email to confirm it and the issuing bank will mail the credit card to your address.

How to use credit card responsibly

Being disciplined around credit card use can elevate your financial life

The correct way to use a credit card is the first thing to consider if one wants to fully enjoy its advantages – and avoid any financial troubles from misuse. On that note, some hard and fast rules do help:

  1. Steer Clear of Overspending. Prudent credit card use limited to what you can afford is the best way to prevent overspending. Be cautious with credit card purchases and ensure you can pay the principal debt every month.
  2. Pay your bill on time. Pay your credit card balance on time since high interest rates on late payment will increase your debt and place your credit score at risk of getting damaged.
  3. Cash advances caution. Cash advances on your credit card can be expensive because they usually have very high interest rates. On top of that, they usually incur large fees taken against your credit limit. Avoid taking cash advances at all costs and opt for other sources of money rather than your credit card.
  4. Be aware of annual fees. Annual fees are sometimes charged for some credit cards. If one does not use the card too much or the benefits and rewards cannot justify the cost, it would be a good decision to consider a credit card that has no annual fee.
  5. View credit card statements and APRs. Always review your credit card statements for any potential mistakes or fraudulent activity. Should you find any disparities, immediately notify the issuing bank to prevent being a victim of fraud – especially transactions that might be irreversible.

Conclusion

The hunt for your first credit card begins -- let's do it right!

With responsible use, credit cards are totally  become a useful tool for effective money handling. Click this link so you can see Finnmerkado’s list of various credit cards you can choose from.

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