What is the best credit card for me?

best credit card for you

Because we all have different spending habits and finances there is no single best credit card in the Philippines.  Instead each person has their own unique most suitable credit card based on their spending habits, wants and financial capability. This means the best credit card for you might not be suitable at all for your friend.

Before you apply for a credit card it’s important you consider how you plan to use it. Will you be using your card for all of your everyday needs or just the occasional bill payment? Do you plan on paying your credit card bill in full each month or do you want to make a minimum payment and pay off the debt slowly? Maybe you have an existing card with outstanding debt and you’re looking for a low interest balance transfer credit card in order to keep your interest payments down. Whatever situation you’re in it’s important you choose the card that fits your situation so that you can enjoy all the benefits and rewards a credit card has to offer. Used correctly a credit card is a great financial tool but used incorrectly and it can become a burden on your finances. Here’s some basic information from the money monster team that you should consider before you compare credit cards.

Credit cards - They allow you to make purchases in most stores without any money and interest free for a given period of time. Every month all of your purchases for the previous month are totalled up and the bank sends you a credit card statement showing you how much you spent last month, what’s the total amount you owe, when payment is due and what’s the minimum payment you can make.

For example let’s say you use your credit card twice in January and spend

500 pesos on January  1

2000 pesos on January 20.

On around February 1 your bank will total up how much you spent in January, which in this example is 2500 pesos and send you a credit card statement in the post or by email stating your total amount due is 2500 pesos, the due date for payment is February 15 and the minimum payment is 300 pesos. If you pay your total amount owed of 2500 pesos it means you will NOT incur any interest and would have therefore enjoy 0% interest credit for more than 1 month. However, if you choose to make minimum payment of 300 pesos this means you still owe the bank 2200 pesos. This outstanding balance will now begin to accumulate interest charges. You should further note that if you miss the payment date of Feb 15 you will also be charged a late payment fee usually of around 500 pesos.

Cashback/rewards Credit cards

If you’re one of those people who likes paying off debts in full as quickly as possible e.g  paying your credit card bill in full every single month then interest rates might not be so important to you. Instead you might want to focus on cashback credit cards with rewards. For example the Citibank cash back credit card offers a huge 6% cashback when you spend more than 10,000 pesos per month using your card and an additional 2% for your meralco bills.

If you spend a lot of money on gas every month you might want to consider a fuel rebate credit card so that you can earn up to 7% rebates every time you fill up your tank and paying using your credit card. For example with the Eastwest Bank LausAutogroup Visa you get 7% rebate on your gas purchases from any station and an additional 10% discount on parts and labour from any LausAutoGroup dealership.

So when you compare credit cards make sure you think about your lifestyle and how you prefer to de rewarded….. cashback, fuel rebates, airmiles, rewards and free gift certificates for groceries etc.

No Foreign transaction fee credit cards

Ok so this one is especially useful for Filipinos who love to shop online in America. Every time you purchase something from your favorite online shop in the US using your Philippines credit card, you get charged a foreign transaction fee which can be as much 5%. Often people don’t even know they are being charged this fee as it’s usually hidden in the exchange rate when you receive your credit card statement. Thankfully there are cards on the market that have a ZERO foreign transaction fee meaning when you online in America it’s just like your shopping in the Philippines and with some cards you can even receive your foreign purchases in a separate US Dollar bill so that you can pay separately with Dollars. One of the best cards for shopping overseas is the RCBC Bankard Visa Infinite credit card.

 

0% balance transfer credit cards

If you already have a credit card with an outstanding balance with a higher interest rate you might want to consider transferring your balance to a new credit card. This is called a balance transfer and can save you a LOT of money when done correctly. In the Philippines 0% is very rare but one of the best low balance transfer cards is the BPI Ayala Malls Amore Visa . It’s simple and fast to transfer your balance to a new card and you will enjoy interest rates as low 0.59% for up to 2 years instead of the usual 3%, this can amount to huge savings every month and will help reduce the stress of too much debt.

Before you apply for a credit card online make sure you consider all of the above points and choose a card that suits you.

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