How to Choose the Right Credit Card [Beginner's Guide]

Choosing the right credit card can be a daunting task. It is as if you need to deal with hundreds of credit cards offered by dozens of banks and card issuers.

It sounds even easier to just get multiple credit cards at once, try them all, and decide which ones to keep and which ones to cancel.

However, this isn’t always an ideal approach because as to be expected, your credit score will be drastically and negatively affected by the hard inquiries and card cancellations.

In reality though, many people, particularly the hopefuls and the desperate ones, just apply here and there for whatever credit cards and whenever there are opportunities.

That is as if all credit cards are just the same. To tell you, they’re not.

Instead, follow this seven-step guide in choosing and applying for the right credit card:

Understand how credit cards work. It’s very important that you learn at least the basics before testing the waters as credit cards also come with financial risks that may weigh almost equal to the benefits.
Decide whether you should really get a credit card. It’s always easy to believe and say that you want a credit card without any personal assessment of spending behavior and needs.
Check your credit score by requesting a credit report. You might want to check first your creditworthiness and what banks will see in your records if you will apply for a credit card.
Identify which credit cards suit your spending habits and needs. As said, credit cards are just not the same, and you need to figure out what will work best for you based on your spending habits, needs, and many other personal considerations.
Narrow your options by considering the factors discussed below. Read the 19 factors below as they will help you decide what cards to apply for, from what banks, and what fees and privileges to expect.
Find ways for you to get more chances of getting approved. It may be a struggle for first-timers, but the internet is such a big book of stories, testimonials, and guides on how to get your first credit card. You might also want to seek assistance from bank employees and agents who normally don’t charge any service fees.
Ready all your requirements and apply. Yes, check banks’ websites and find out what requirements to prepare, from valid IDs to income documents and good selfies.

19 Factors to Consider When Choosing the Right Credit Card

There are many factors, personal and impersonal, to consider when choosing and applying for the right credit card, and some of them are:

Easy Application and Approval

Applying for and getting a credit card in the Philippines is not as easy as what you think. On top of everything, you need to convince the bank or credit card issuer that you’re financially capable enough to pay what you’ll borrow and charge on your card.

Part of the typical process, your income and credit records will be scrutinized. Your employer may even be contacted to verify your employment.

Your credit report will also be retrieved from a credit bureau, and a single negative credit history, e.g., late or default payment on a previous loan, may result in your application getting declined.

While these banks and credit card issuers have their standard procedures, evaluation criteria, and review timeframes which aren’t transparent at all, there are those which are just beginner-friendly.

Aside from easy application through their websites or agents all around the social media, approvals may also be made in a matter of three to seven days. Others even make decisions just overnight.

— Citibank Philippines and Security Bank, for instance, can release credit card application decisions within a day or a few days.

These decisions still depend on various factors though, but you’ll still get surprised that before the day ends, you are receiving already a SOA system-enrollment email from Citibank.

Banks and Credit Card Issuers

It cannot be denied that there is a reciprocal relationship between the financial institution’s reputation and its products and services.

You can always assume that credit cards and related services are of great quality if they are offered by banks and card issuers that have proven a track record of sustainability, stability, and security through time.

The largest banks and credit card issuers usually have the largest networks of partners and affiliates and thus, may offer the most credit card promos, discounts, and other perks.

If you’re trying to apply for a credit card, may it be your first or an additional one, try checking the offers by reputable banks and credit card issuers first. You might also want to apply for co-branded cards which come with more rewards when used at your favorite merchants or shops.

It’s also a good idea to apply for a credit card with your trusted bank itself, where you have been maintaining a deposit account for a long time already. Sometimes, it’s even the bank that initiates you get one.

— BDO, BPI, Metrobank, and Citibank are our top choices when it comes to reputable credit card issuers in the Philippines.

Annual Membership Fee Waivers

All credit cards are supposed to come with annual membership fees. Accordingly, these fees balance out generous bonuses and rewards or compensate for high-risk lending with the cards.

But not all credit cards charge these annual membership fees — sometimes a really zero annual fee for life based on the card program, sometimes waived for a lifetime upon qualifying for the minimum spend requirements within the first months, and sometimes waived for just the first year upon cardholder’s special request.

Whatever the case is, it’s always best to have a credit card that comes with these fees waivable for a lifetime, especially if you won’t be maximizing its use.

Whether your first credit card comes with a very low credit limit or the other way around, it’s always for long term if it’s annual fees have been already waived for a lifetime.

Your credit limit will eventually increase through time with responsible use of the card, but the annual membership fee waiver may just be a once-in-a-lifetime opportunity.

With this, nothing beats credit cards that have either these fees already waived or the chances of waiving them based on certain conditions.

— Citi Simplicity+ and PNB Ze-Lo Mastercard are just two of the available credit cards with annual membership fees waived for life without minimum spend requirements or any other conditions.

Generous Initial Credit Limits

Although most would say that credit limits are based on your credit score and salary range, there are banks and credit card issuers that seem more generous than others.

If it’s your first time applying for a credit card, expect that your initial credit limit is just within your salary range, i.e., if you’re earning around PHP25,000 a month, your credit limit may be between PHP20,000 to PHP30,000.

For many, it’s always that the higher the credit limit, the better. Your credit limit suggests your spending or purchasing power using an unsecured credit.

If you’re trying to buy a gadget worth PHP50,000 against your credit limit of PHP25,000, you need a hard cash because you can only charge to your card the amount equivalent to the available credit limit.

In other words, you can only charge PHP25,000 to your card and pay the remaining in cash, unless you have other cards to distribute the billed amount.

While you cannot really tell how much credit limit the bank will give you until you get approved and have your card, you’ll just get surprised that after a year of responsible credit utilization, you are prized with a double or triple of your initial limit.

Of course, it’s better if you start with a big credit limit already, and the bank is known for being generous in terms of annual increase.

— EastWest Bank and RCBC Bankard are known for being generous in giving high initial credit limits.

High Cash Advance Limits

Aside from the actual credit limit, another good consideration is the cash advance limit — or the cash you can borrow and withdraw anytime from your credit limit.

Yes, you can borrow an actual cash with your credit card. Similar with a debit card, you simply need a PIN and withdraw cash from an ATM.

However, your cash advance limit is way lower than your actual credit limit, sometimes just 30% or 50%. For example, if your credit limit is PHP25,000, your cash advance limit may just be PHP10,000.

As you receive your credit card, the document that comes with it confirms that two — your credit limit and cash advance limit. As your credit limit increases, so does your cash advance limit.

While a cash advance is quick and easy, it comes with very high interest rates on top of the regular cash advance fees and ATM withdrawal fees. It may also affect your credit utilization, a major determinant of your credit score.

In most cases, it’s not advisable to make a cash advance with a credit card unless it’s the only option remaining to get an access to cash. However, it’s still a factor to check while maintaining credit cards.

Top Credit Card Networks

You’re very much familiar with the two major credit card networks in the Philippines — Visa and Mastercard.

Other than these, there are also JCB, American Express, Discover, Interlink, and Interac, although less popular in the country.

It is best to stick to the two — Visa and Mastercard — both which work as intermediaries and come with the most payment channels and partner merchants.

With entry level credit cards, there is a very little difference between these two, but Mastercard may have more impressive special luxury offers particularly on its World and World Elite level cards, which may then be attractive to big spenders.

Clear Credit Card Purposes

Credit cards come with various purposes, and you should just know yours upon applying for one.

It may be for building credit, payment convenience while enjoying rewards, business, big purchases converted to installments, and many others.

But if you’re applying for it just because you want it without knowing any justifiable purpose and without knowing how it works and the financial risks that come with it, then think about it again.

You think you’re running a healthy financial life until a credit card ruins it all. In some ways, a credit card is considered a debt trap especially for those who may not have control over overspending and splurging.

It’s always good that you develop a deep understanding of this financial tool first before jumping into it, and reading this article happens to be part of it.

If you don’t qualify for an unsecured one, it’s also a good suggestion to try a secured credit card. Read more about it here.

Assessed Spending Habits and Needs

Aside from your purpose in getting a credit card, you should also assess your spending habits and needs.

Ask yourself if you can manage the responsibilities that come with it. You may realize that you’re running your financial life with hard cash all this time, and you don’t make online transactions much.

Or possibly, you always end up overspending as you don’t usually run a serious budget. Your assessment of your spending habits and needs must be in harmony with your identified purpose.

Hefty Credit Card Rewards

As mentioned earlier, credit cards offer convenient payments while enjoying rewards.

In another article, I tried to explore the most common types of credit card rewards. Read more about these rewards here.

Rewards credit cards, in particular, incentivize cardholders loyalty upon regularly using the card. These offer a certain type or a combination of ‘rewards’ which are typically — cashbacks, points, and travel miles — for every qualifying spend.

So, your assessment of spending habits and needs may even land you into identifying the type of credit card that best suits you.

For example, if you’re having a car, choosing a credit card that rewards you for every refueling is a great deal.

If you’re an active shopper, a traveler, or just a conscious budgeteer, then there is always a rewards credit card that is right for you.

— RCBC Flex Visa, Citi Rewards Mastercard, and Security Bank Complete Cashback Platinum are just a few of the best rewards credit cards available in the market.

Competitive Interest Rates and Other Fees

Credit cards come with various fees and charges unless you succeed in requesting for annual membership fees waiver and paying your outstanding monthly statement balances in full before deadlines.

Common credit card fees and charges normally include the following:

Annual Membership Fee. It’s the yearly payment made being a member of the credit card program. If not waived, this usually ranges from PHP1,000 to PHP2,500 for most entry level credit cards. Supplementary cards may or may not come with annual membership fees.
Regular Interest Charge. It’s the cost of borrowing money from the lender and charged if the balance is not paid in full each monthly billing cycle. It normally ranges between 2% to 3% per month or 36% effective rate annually.
Cash Advance Service Fee and Interest Charge. The service fee may be a flat fee for every cash advance, and this may normally be as low as PHP200 or as high as PHP500. Special interest charges are also applied to cash advances, may be the same as the regular interest charges or even higher.
Late Payment Charge. If you miss paying your outstanding balance or the minimum amount required on the payment due date, you’re charged a late payment fee. Most credit card issuers charge PHP1,500 or the unpaid minimum amount due, whichever is lower.
Over Credit Limit Fee. It is the penalty charged when your purchases exceed your card’s credit limit. It may also range between PHP500 to PHP1,500 or the highest over limit amount during the billing period, whichever is lower.
Returned Check Fee. It is charged when you make a payment via check with insufficient funds. Most credit card issuers charge PHP1,500 for every returned check.
Charge Slip Retrieval Fee. Banks may charge around PHP250 for the retrieval of each retail or installment and mail-order or telephone-order charge slip, sometimes as high as PHP1,250 for travel and entertainment slips.
Card Replacement Fee. It is charged whenever you need a card replacement due to a damaged, lost, or stolen card. It normally ranges between PHP400 and PHP800.
Foreign Currency Conversion Fee. It is a special fee charged upon making a credit card transaction that requires conversion of one currency to another. It may be as low as 1.5% or as high as 3.5%.
Gambling and Gaming Fee. If you’re using your credit card for transactions tagged as gambling and gaming, then you are most likely paying these special fees. Some credit card issuers charge 5% service fees for these transactions.
Multiple Payment Fee. While you can always make multiple payments within the billing period, most credit card issuers charge a minimal PHP50 fee if you exceed the allowed number of payment transactions. Most of them allow up to three (3) payments though before charging this.
Installment Processing Fee. While installment promos may be available for grabs from time to time, other credit cards still charge processing fee for every approved installment application. Some credit cards charge PHP250 or PHP500 per transaction.
Installment Pre-Termination Fee. If you opt to pay off all your installment balance, you are most likely to be charged an installment pre-termination fee, sometimes 5% of the remaining balance or PHP500, whichever is higher.
Other Fees and Charges. Depending on your credit card and issuer, other fees and charges may also be collected such as but not limited to card balance transfer service fees, attorney’s fees and other judicial expenses for default payments, and others.

You might want to compare these fees and charges across credit card offers first before filling out forms for your application.

In many cases though, banks and credit card issuers charge the same fees or with almost negligible differences.

To emphasize, you need not worry about these fees if you keep on being responsible enough with your credit card payments and transactions.

Good Installment Options

Almost all credit card issuers offer installment options for big purchases charged on the card.

From time to time, there are also installment promos that come with 0% interest for several months.

Big purchases may be converted to installments via self-service transactions on the apps, or via special requests.

Others however come with special conditions to qualify for installments such as with minimum amount spend of PHP3,000, PHP5,000, or even higher.

Before you decide for an installment however, do the math and find out if it’s really a good deal as it may also come with flat service fees, interest charges, and even pre-termination fees.

Convenient Tools, Channels, and Services

If you have a credit card, expect that you will have to get in touch with your card issuer from time to time.

You do this for various reasons such as requesting for installment conversions, credit limit increases, annual membership fee waivers, and SOA entry clarifications, among others.

You want a good customer service wherein your phone call is answered, your concerns are addressed, and requests are granted right away without a long wait time or stressful communication channel.

You don’t want reading templated replies from chatbots and reaching dead ends without getting clear answers for your specific questions and concerns.

Equally, you want a bank or credit card issuer with a powerful, reliable, and secure mobile app that grants you access to your credit card account, transactions for your review, and various tools.

Generally Positive Reviews

One of the biggest advantages of the internet is that as consumers, we already have the liberty (and sort of responsibility) to make and share product and service reviews.

At the same time, we get access to these reviews and make better and more informed decisions.

Equally, these producers, manufacturers, and service providers are also forced to improve their products and services, and thus, keeping them at par with the standards and expectations of the consumers.

When applying for a credit card, it is advisable to check reviews first. These may include product and service reviews.

There are banks and credit card issuers that offer competitive credit card programs, but their mobile apps and customer services cause big disappointments, or the other way around.

When checking for reviews about mobile apps, you may check Google Play or Apple App Store. Social media such as Facebook, Twitter, and Reddit are also go-to platforms for almost all types of reviews and testimonials.

Security and Fraud Protection Features

It’s not anymore about whether the card itself comes with the best security features because all of them do have these days.

It’s rather about what the banks and credit card issuers do to prevent scams and fraud and assist the clients after falling victims to these.

Many stories have been told already about how banks deny fraud transactions and simply leave clients paying off the charges on their card without due assistance, standard processes, and investigations.

Sometimes, people wonder whether they tolerate such scams and fraudulent transactions and conveniently put the blame on the victims. Unresolved complaints tell you more about these.

When applying for a credit card, try checking reviews related to these and find out which banks or credit card issuers best provide support and assistance to their clients whose account security is compromised.

Credit Score and Credit Building Potential

While your credit score is a big factor to get approved for a credit card and for a high credit limit, the card itself when used responsibly will even build your credit through time.

Though all credit cards will surely do that, not all of them are the same when used as referral cards for succeeding applications.

Others are more powerful and more accepted, and that just translates to easier application approvals and higher credit limits.

You might have seen some credit card application promos requiring only existing credit cards with minimum credit limits and with the largest banks to get an instant approval. So, it may be true then.

One thing for sure however is that if you’ve successfully been approved for your first credit card, make use of it responsibly and be grateful you’ve been trusted with even a small credit limit.

Your bank or credit card issuer will surely prize you with a credit limit increase after a year, or you may then use it as a good referral card.

Exciting Introductory Offers

You are just excited to get your first credit card, and your credit card issuer is just as excited as you are to offer their onboarding promos and packages.

You may be offered a 0% or lower than the average interest rates for a set period of time or an annual membership fee waiver for the first year.

Other credit card issuers also offer generous bonus reward points upon getting approved, and these aren’t just hundreds but thousands of points.

Whatever these introductory offers and bonuses are, still they are worth considering when applying for a credit card, especially if this will be your first one.

Balance Transfers

With multiple accounts, you may also consolidate your credit card debts with balance transfers.

It is done by moving outstanding debt on one credit card to another card, usually a new one, while enjoying lower promotional interest rates and better benefits.

Most balance transfers, however, also involve transfer fees and other conditions to satisfy.

With this, the real challenge is to look for a credit card that offers not only the lowest interest rates but also the lowest transfer fees with the most lenient conditions in the market.

Co-Branded Credit Cards

Credit cards being tied up with popular brands and shops, i.e., clothing lines, gas stations, e-commerce platforms, shopping malls, hotels, and airlines, are popular these days.

Apart from the same payment convenience and services that credit card issuers offer, these co-branded cards promise more rewards — points, miles, cashbacks — when used at the partner brands and shops.

When applying for a credit card, it is important, as suggested above, to assess your spending habits and needs, not only for the rewards credit card type but also for a co-branded card that is equally worth a try.

Credit Card Terms and Conditions

Getting a credit card comes with a legal agreement between you as the borrower and the card issuer as the lender.

The terms and conditions in fine prints may be daunting or a waste of time to read and scrutinize, but these are stipulations of both parties’ rights and responsibilities, hence also your protection against unjust and unfair practices.

Reading these terms and conditions finalizes your decision in getting a credit card and completes the factors in choosing the right one for you.

How to Choose the Right Credit Card [Beginner’s Guide]