Updated on March 22, 2009
Secured Credit Card
No credit investigation. No income documents required. â€“ Metrobank Value MasterCard application
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 didnâ€™t have the discipline to control my spending yet (and my mom discouraged â€“ thatâ€™s all). Iâ€™ll never know now what crazy stuff I wouldâ€™ve bought before. I probably wouldnâ€™t have quit yet because I probably got â€œnecessitiesâ€ (like clothes from Zara or an iPod) on installment.
Now, Iâ€™m just thinking of the convenience because itâ€™s such a hassle to manually reconcile my cash on hand with the money I spend. My dilemma now is Iâ€™m newly self-employed so I canâ€™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, Iâ€™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.
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. Iâ€™m not keen on getting BDO because itâ€™s more advantageous if you buy SM, which I rarely do. And I donâ€™t like dealing with the people at the branch near me. B
|Card||VISA Classic||Value MasterCard||Any BPI Card||Any HSBC Card|
|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|
|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.|
|â€œPerksâ€||U-Protect, U-Secure||Metrobank Credit Card Rewards Program, Cash 2 GO (BEAT Installment Plan)||BPI Rewards||HSBC Rewards|
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.