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Secured Credit Card

27 December 2007 4,854 views Comments

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No credit investigation. No income documents required. – Metrobank Value MasterCard application

Good info for freelancers, college students, or newly self-employed who aren’t ready with their income documents yet. You can Share This article through the link at the end of this post.

I will build my own credit and have my own credit card. I only have a supplementary card and debit card now. I could have gotten myself a Gold credit card based on my old salary but I thought that I didn’t have the discipline to control my spending yet (and my mom discouraged – that’s all). I’ll never know now what crazy stuff I would’ve bought before. I probably wouldn’t have quit yet because I probably got “necessities” (like clothes from Zara or an iPod) on installment.

Now, I’m just thinking of the convenience because it’s such a hassle to manually reconcile my cash on hand with the money I spend. My dilemma now is I’m newly self-employed so I can’t produce the financial statements and ITR yet for the application requirements.


The next best solution is getting a secured credit card. I just keep a small amount in the bank and I get to use a part of that amount as my credit limit. After a year or so of good credit behavior, charging a few small items and paying the card bill on time, I’m bound to get an offer for an unsecured card. Get Rich Slowly readers also recommend this for those with no credit history.

Requirements are typically the same as when opening an account, the deposit, deed of assignment on the deposit, and annual and joining fees.

How can I make the best use of a secured card to build my credit rating?

Buy a few things and pay off the card every month. “People should not get these cards to carry any balance,” Sherry says. “It seems you need to make a few purchases and pay for them. It helps to pay in full every month to show you’ve got this excellent credit rating.”
While secured cards make sure you never spend more money than you can afford while they force you to save, it’s not a good idea to keep one any longer than you have to, experts say.
All secured cards have annual fees and higher interest rates than regular, unsecured cards. If you have enough discipline to use a secured card responsibly, you have enough to use an unsecured card and set up a better savings program on your own.
“We recommend to people that it should be a stepping stone,” Sherry says.

I shopped around. I’m not keen on getting BDO because it’s more advantageous if you buy SM, which I rarely do. And I don’t like dealing with the people at the branch near me. I dropped by the BDO Makati Cinema Square branch earlier today. BDO doesn’t offer secured credit cards. No feedback yet from RCBC Bankard if they offer secured credit cards. B

Issuer Unionbank Metrobank BPI HSBC
Card VISA Classic Value MasterCard Any BPI Card Any HSBC Card
Minimum deposit P12,000 P15,000 P10,000 P12,500
Credit limit (based on deposit) 90% 90% 50-80% 80%
Annual fee TBD P1,000 or P100/mo x 12months waived 1st year waived 1st year
Cash advance 3.5% Up to 50% of CL; 5% or P50, whichever is higher   3% of amount drawn or P300, whichever is higher
Interest 3.5% x ADB 3.5% 2.75% - BPI Classic; 3.4% - MasterCard 3.5% x ADB; 2.75% - Mabuhay Miles Gold
Late Payment Fee 6% based on min. amount due or P300, whichever is higher 7.5% of total amount due or P500, whichever is higher, on payments made after payment due date 6% of past due amount 5% of min. due or P300, whichever is higher
Minimum payment 5% or P500 5% or P500, whichever is higher ? 5% of outstanding bal. or P500, whichever is higher
Overlimit fee P500 ? ? P300
Reprinting of statement fee P300    
Close the credit card/account   Allowed to close the deposit account 35 days after closing the credit card Allowed to close the deposit account whenever or after 1 year and pending income documents and Credit Committee approval Allowed to close the deposit account 14 banking days from closing the credit card
Payment thru Unionbank, Bancnet Metrobank, BancNet BPI HSBC, selected LBC Express Inc. branches, Allied Bank, Banco de Oro and service counters of SM Department Store, SM Hypermarket and selected SM Supermarket branches nationwide. Online - HSBC, BPI Family Bank, Bancnet.
“Perks” U-Protect, U-Secure Metrobank Credit Card Rewards Program, Cash 2 GO (BEAT Installment Plan) BPI Rewards HSBC Rewards
Customer Service 84-186 8-700-700 89-100 85-800

HSBC people are soooo nice. Their phone customer service and personal bankers… I went to the RCBC Plaza branch to inquire and I wanted to open an account right then and there! (No, I haven’t yet) I added a new column in my matrix.
Disclaimer: I inquired with the banks as part of my due diligence. Don’t take what I write as gospel. Please call or visit the banks and conduct your own due diligence if and when you decide to apply for a secured credit card.

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Viewing 4 Comments

    • ^
    • v
    this article has helped me a lot. to add: if you are after the higher credit limit and convenience, go for metrobank value mastercard as the process is really easy (i just opened a time deposit account with them and signed a pledge document) then i got my card in a month. the downside is that metrobank value mastercard has only one credit limit, that is, if you max your credit limit and apply for installment, you would only be able to free your credit limit either by waiting for the installment period to end, or if you pay full.

    bpi's card on the other hand offers two credit limit, one for the installment and the other similar to a revolving credit line. the downside of bpi's credit card is that the credit limit ranges from 50%-80% of your deposit. i know somebody who made a deposit only to find out that he can only use 50% of his deposit as his credit limit. it was so frustrating because he set up the account to purchase a laptop. i think it's because they still do some CI, and the process is more complex with bpi.

    for hsbc, they offered to give me the card a week after the deposit and they offer 80% of the hold out amount for the card's credit limit. i did not know if they could deliver on their promise, but if they can make it possible then it's a great deal. the upside is that you can increase your deposit anytime then ask for an increase in credit limit; not like metrobank where you have to wait until you reach the period when the time deposit ends, and only then can you increase your deposit to increase your credit limit.
    • ^
    • v
    So I closed my HSBC credit card a few weeks ago. Didn't do much. I got an unsecured RCBC Bankard, probably from my HSBC records. So I guess in that way, a secured CC helps you build credit but not really with the same card company. Even with my impeccable payment record at HSBC, I didn't get a credit limit increase or unsecured CC from them. I did get my annual fee waived though.
    I'll probably open a new one with Metrobank this week just so my capital, is, well, secured. Let you know what happens.
    • ^
    • v
    tumawag ako sa HSBC. 100k daw ang minimun... nalilito ako...

    ano ba requirements nila? other than those listed above...

    thanks
    • ^
    • v
    Ouch maybe HSBC changed their policy. Try asking sa branch. Or opening with Metrobank was pretty hassle-free too. I have a bunch of application forms with me, actually. :)
 

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