In our generation, having a credit card is not only convenient, it’s also one of the things other institutions look for. If you’re applying for a loan of any type, if you’re trying to go out of the country, chances are they would ask you if you have a credit card. Why? Because having a credit card is one assurance that you’re taking responsibility of your credit. In addition, most companies and institution feel secure because the bank where you got a credit card from will pay off whatever amount you swipe it to; then you will pay the bank. However, it’s not easy to apply and be approved of a credit card. They run background checks, they do investigations, and so on. Although that’s the case, there’s now a new and easier way on how you can achieve this and that is through a secured credit card.
What is a secured credit card?
Basing it on what it’s called, a secured credit card is a credit card but with a twist. A secured credit card is the one you can apply for if you’re not being approved of credit cards. It gives the highest chances of you being approved because it will ask you for an initial deposit. Moreover, the deposit you will make will determine how much your credit limit would be. Simply put, a secured credit card is an account in which it requires an initial deposit as a collateral, you can use it as a credit card, depending on the bank’s rules and credit limit policies, the credit limit will depend on an x% of your total initial deposit.
After a year or even earlier, if the bank sees that you’re a good payer and that you’re worthy of owning a credit card, the card can just be a legitimate credit card. If you don’t owe anything, your initial deposit will be released and it won’t be touched.
What if I don’t make my payments properly and on time?
If the bank notices that you’re not that good with your payments and if they sense that you’re not planning to pay, they will take it out from the initial deposit that you have. Moreover, this can decrease the chances of you being approved for a credit card. Hence, going for a secured credit card and if you miss payments, if you go overdue all the time, you’re just going to pay interests.
What advantages and disadvantages does having a secured credit card have?
Of course, we also need to talk about the pros and cons of having a secured credit card. This is for you to gauge whether or not this type of set-up is applicable for you.
- Applying for a secured credit card is a guaranteed approval for a credit card.
- If you’re kind of not sure whether or not you want a credit card, applying for a secured credit card is the best way to go. Since your spending cam or limit will solely be based on your initial deposit, you can test how you manage debt by doing this.
- Highly preferred to people who have bad credit or who’s trying to build credit here in the Philippines.
- Since it’s just like a regular credit card, you will also get rebates, discounts, coupons, and promotions credit card gives people.
- The credit limit would be dependent on how much you’re going to deposit. If it’s just a small amount, then expect that you would only have a small spending limit. If, however, you want a big spending cap, prepare a large amount of money that you can allow to rest for at least one year.
- Even though it’s just a secured credit card, you’ll be subject to different charges and interest just like a normal credit card since you’ll be using it as a regular credit card.
As you’ve noticed, the advantages outnumber the disadvantages which makes it more beneficial and budget-friendly for everyone who wants to try out having a credit card.
Which Philippine banks offer secured credit cards?
As of today, only a few major banks offer secured credit card options. One thing you also need to consider is that it’s better if you already have a savings account with the bank for a faster and easier transaction.
The Bank of the Philippines Islands (BPI), is one of the best choices when it comes to secured credit cards. Why, you may ask? Because whatever your initial deposit amount is, your spending limit would be 90% of what you will be investing. The minimum initial deposit or an ATM-Savings or Passbook savings account is Php10, 000.00. It’s going to be Php50, 000.00 for a time deposit account, on the other hand.
If you have a BPI account and you’re looking to have a credit card with them, apply for a BPI secured credit card and get your BPI Express Credit Card in under a year.
To know more or if you’re interested in getting the BPI Express Start, click on this link.
Rizal Commercial Banking Corporation (RCBC), on the other hand, does not allow 80 or 90 percent of your initial deposit, it allows the amount of whatever you deposit. The minimum investment they allow is Php5, 000.00 and that will automatically serve as your credit or spending limit for your secured credit card.
Since you’ll be using the secured credit card as a regular credit card, you need to be aware of the membership fees, service, fees, and other fees and taxes connected to having a credit card. The good thing about getting and RCBC secured credit card is that the annual membership fee is waived for the first year. Furthermore, the revolving interest rate is just 2% for dollar cards and 2.5% for peso cards.
When the bank approves your secured credit card to become a credit card, you can choose among the following options:
- Black Card Peso and Dollar
- Diamond Card
- CLASSIC MasterCard
- HBC MasterCard
- Fully Booked MasterCard
- GOLD MasterCard
- Landmark Anson’s MasterCard
- LJC MasterCard
- Mango MasterCard
- UnionPay Diamond and Classic
- Sta. Lucia Mall MasterCard
- Wilcon MasterCard
Click on this link to know more about the RCBC Bankard program.
Security Bank’s Fast Track secured credit card guarantees 100% approval for a credit card in a year or maybe less than that. You would need to open a savings account with a minimum of Php15, 000 for a savings account and Php100, 000.00 for a time deposit account.
One of the key things Security Bank is proud of is that the application takes only three (3) banking days upon the receipt of the documents. The credit limit is 80% of the withholding amount and the annual fee is waived for the first year.
You can check the requirements on their website by clicking on this link.
Banks are helping other people build their credit despite the occurrences and big news about debt here in our country. Are you part of the demographic who’s having a difficult time to apply for a credit card? Do you continuously get rejected when you apply for one? Worry no more because secured credit cards are here and you can take advantage of it while it lasts.