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Credit card application is much more convenient nowadays, especially now that you no longer have to go to a bank to get one.
Whether you already have an arsenal of credit cards in your wallet or you’re a first-time applicant, it pays to know how you can make your application much more convenient. The first step to easy credit card application is to follow the handy tips we’ve included below. Happy shopping!
1. Keep your financial records clean
Financial institutions like credit card companies look at an applicant’s credit score before deciding whether or not to approve their applications.
In a nutshell, a credit score is a number that shows your level of risk in paying back lenders. A low credit score will mean that you either have outstanding debts to banks or you do not have any form of credit at all. Having a poor credit standing will lessen the chances of you getting approved for a credit card.
In the Philippines, individuals do not have access to their credit scores, which are used by financial institutions to judge a person’s creditworthiness. So, how do you bump up these numbers without knowing them?
Even if your credit score is invisible to you, there are things you can do to make your application much smoother—and it all boils down to three cardinal rules:
Keeping your payments on time if you have outstanding debts
Having a savings account
Preventing your existing loans from defaulting
By making sure that your financial records are untouched by bad debt, you can get the credit card you want in no time.
2. Pick the card with more competitive interest rates
There are numerous credit cards in the market that offer a variety of features to potential applicants. Sometimes, getting one that is loaded with features and freebies will mean having a higher monthly interest rate. Left unchecked, carrying debt in your high-interest credit card will result in bigger interests and higher payments.
A savvy credit card applicant will get the best one that has the most features. However, sometimes more perks can lead to a higher annual fee. But what is an annual fee, anyway?
Simply put, this is the amount you must pay to credit card issuers for the mere convenience of using their credit card. Depending on the rewards and the status of the card you like, a card with more competitive features like higher cashback rate or lower peso-per-mile rate can cost you an annual fee of up to P5,000. Although you may waive it if you ask nicely, a responsible credit cardholder must be ready to pay this year after year.
So how do you make sure that the annual fee won’t strain you financially, provided that you cannot ask for it to be waived? See how the annual fee will create an impact on your budget. Since there is no rule of thumb, the idea is to make sure the annual fee you have to pay won’t exceed 25 percent of your monthly salary. This way, you can pay off your annual fee even if you weren’t able to prepare for it for a year.
4. Don’t forget the features
We may have placed a heavy emphasis on picking better interest rates and more affordable annual fees, but you also need to strike a balance between those and credit card features.
Depending on your lifestyle, you must select the best one that works with your spending habits:
Zero or low annual fee
How does it work? Let’s just say that you want exclusive discounts on beauty, fashion, and dining merchants, you should get a woman-oriented credit card. Meanwhile, car owners who bring out their cars every day will get a better deal with motoring credit cards because of fuel rebates, free gas vouchers, and discounts on parts and services with partner shops.
To know which credit cards will complement your lifestyle, go over your monthly expenses, including your non-essential spending. That way, you can figure out which type of credit card will work around your monthly outlay—instead of the other way around.
To attract new customers, credit card issuers throw lots of bonuses whenever there’s a new signup. To maximize your credit card application, keep an eye on great deals out there that will make your efforts more worthwhile.
Although banks have signup promos and discounts, you must read the fine print or you might find yourself spending unnecessarily just to get the freebies. That way, you’ll know the conditions you have to do to make yourself eligible for such freebies and bonuses.
Want one last tip? There’s a pretty sweet signup bonus being offered right now from BPI Credit Cards. You can get P5,000 worth of Honestbee vouchers, that you can use for groceries and food deliveries when you apply online for a BPI Credit Card.
About the author
Dino Mari Testa Veteran journalist, researcher, and photographer Dino has written more articles than one can imagine. He's eCompareMo's go-to-guy for all things personal finance, motoring, news, pop culture, and random fandom. Check out his LinkedIn.