Your Guide To Choosing The Right Credit Card

Posted by under Personal Finance . Updated: August 13, 2016

Are you ready to get your first credit card or maybe thinking of getting a new one? If so, then here’s a guide to help you choose the right credit card for you.

Don’t just fill out the first application form that’s been handed to you nor accept and use that pre-approved credit card that you received in the mail.

It’s important to take the driver’s seat and actively select the one that can provide the products and services you need and gives the rewards and incentives that benefits you the most.

Before anything else, be sure that you are prepared mentally and financially to own a credit card.

Read my previous article, Things You Ought To Know Before Applying For A Credit Card, to have initial guidance and the proper mindset on why you should get a credit card.

So are you set to gain some financial leverage? Here are some key points you should consider and a few tips you should follow when choosing a credit card.

best-credit-card

Be familiar with jargon and how credit cards work

Before inquiring and talking to an agent, make sure you don’t get “lost in translation”. Have ample knowledge and understanding about the world of credit cards.

Although bank representatives will most likely be willing to explain to you these terms, it’s more advantageous to know beforehand so you’ll have more time inquiring about card details and less time asking for definitions.

Here are some terms to get you started:

Finance Charge Rate
The interest rate that is applied to your balance if you fail to pay within the grace period. Multiply this by 12 and you get the Annual Percentage Rate. Philippine credit cards average around 3% for the monthly rate.

Grace Period
The number of days where you can pay your credit without interest, sometimes referred to as the Billing Cycle. In the Philippines, the usual grace period is 30 days.

Annual Fee
The amount you pay for maintaining the credit card. This is automatically billed into your card, usually as monthly charges. Normally waived for the first year. Averages at P100 a month.

Credit Limit
The total amount you can spend. Normally based from your credit history and financial status as assessed by the credit card company.

Rewards
The benefits you can avail from being a member. Generally works as a point system which you can later exchange for free items and services. Other incentives includes discounts in partner establishments and cash rebates.

Cash Advance Fees
The interest rate that’s automatically billed when you avail of a cash advance from your credit card. Philippine banks usually charge around 3%.

Late Charges and Penalty Fees
The interest rate that is applied to your balance or a fixed amount that is added to your bill if you fail to pay the minimum required on or before the billing due date. This is higher than the finance charge rate and averages at 5%.

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How are you planning to use the credit card?

Carefully consider how you intend to use the card. This is probably the most important factor to consider when choosing the right credit card.

Here are some common uses for credit cards:

Buying groceries and everyday spending – consider cards that have long grace periods.

Purchasing expensive items – choose the one with low finance charge rates and those that offer deferred or installment plans

For online shopping and transactions – get the one with internet fraud and consumer protection benefits

Do your research

After familiarizing yourself with how credit cards work and knowing exactly how you intend to use them, the next step is to collect information from banks and credit card companies.

Start with your own bank. Then inquire in those which are convenient for you to go to because after all, you’ll be visiting them regularly to pay your bills.

When researching information on the internet, make sure that you’re getting facts from an unbiased source.

Additionally, when inquiring, make sure that you take note of all the fees, terms, conditions, and the benefits which the credit card company offers so you can easily compare your options.

To help you start with your research, here are some local credit cards that have “low” monthly interest rates:

  • BPI Express Credit Classic – 2.75%
  • EastWest Bank Mastercard – 2.5% to 2.75% (lower rate applied to selected purchases such as groceries)
  • Metrobank M’Lite Mastercard – 2.75%
  • RCBC Bankard myDream JCB – 2.75%
  • Most platinum credit cards also offer 2.75% interest

credit-card-guide

Consider getting a credit card with affinity but don’t use it as the main basis of your decision

Depending on your lifestyle, you may want to consider getting an affinity credit card. You’ll enjoy instant benefits from their partner companies.

For example, if you own a car and would want to save money from your gasoline expenses, then you might want to apply for a BPI-Petron, a Shell-Citibank or other credit cards with affinity to fuel companies.

If you frequently travel with Philippine Airlines, then the HSBC Mabuhay Miles Visa could be a wise choice.

This is, however, just secondary criteria. Your needs and how you intend to use your card is still the primary consideration in your selection process.

Furthermore, don’t apply for a particular credit card simply because you want the rewards. Many credit card companies lure you with these bonuses and gifts just to get you on board.

In the end, you might just end up with a card with high interests rates and that which does not fully complement your financial requirements.

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8 Responses to “Your Guide To Choosing The Right Credit Card”


  1. dyosa says:

    naku, credit card. my favorite subject. LOL.

    yep, i have 2 CCs. I’ve the BPI Blue MasterCard and Citibank Gold Visa. i chose BPI because of lower interest rates and they always have those BPI Madness where I can get gadgets/appliances with great discounts. As for Citibank, they really give huge credit lines. Hehe. i used to have 5 CCs but I trimmed it down to 2. one thing I’ve learned in using a CC…don’t just pay the minimum amount due because you’ll only be technically paying for the interest. so what I usually do is pay a big chunk of my outstanding balance to make sure that everything’s covered and it’ll be faster for me to clean my debt. 🙂

  2. Interesting blog you have man! Btw, I have just 1 CC – BPI Petron Card. I just want it for the 3% fuel rebate and the free car stuff. Hehehe. ^^

  3. Fitz says:

    @dyosa
    Likewise, I believe that BPI gives the best opportunities for getting great discounts on gadgets and appliances. Not to mention that their special installment plans (SIP) are accepted in a lot of establishments. I’m also have a proud BPI credit card holder. 🙂

    @Carlo
    I’ve always been tempted to get the BPI Petron card. What’s stopping me is the fact that I also have an SM Advantage card which earns me points from Petron. 😀 Thanks for sharing your thoughts.

  4. kengkay says:

    and if you dont know how to control your spendings, better veer away from those credit cards 🙂

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  7. Maria says:

    First time here 🙁 and I still don’t know how much is the interest rate for personal loan. Important question that I missed to ask before I signed up for credit card.

  8. Rednoserudolf says:

    East West Credit Card application-denied. So what! Next….

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