I just wanna share my thoughts and experience with secured credit card in the Philippines. Until now, there are still a lot of people who are confused about it. I hope that this blog can help shed some light about it and also help you decided whether secured credit card is for you or not. BTW, the information that you can get here are purely based on my knowledge and experience. It is still best to ask more information from your bank of choice.
After working for several years, I came to a point where I wanted to have my own credit card. Why? It's because of the convenience and the privelege that comes with it plus I can buy things I want and pay it on installment basis. It can also help stretch out your cash flow provided that you use it properly. And when I say properly, what I meant was swiping only the amount that is not more than your monthly salary and paying your bill on time. Before I had one, I have applied numerous times to different banks but I always got declined despite being qualified based on their requirements. It was really frustrating until I decided that I will give secured credit card a try. I wasn't very familiar with it so I tried to search for information online about it. There were very few information at that time but then I still decided to take advantage of it so I can build my credit history and eventually get a regular credit card. I was initially torn between RCBC's instacard or BPI's express start. Since instacard offers a credit limit that is equivalent to 100% of your hold-out deposit while BPI only provides 80%, I decided to apply for Instacard. It was a decision that I regret coz I had an extremely horrible experience with my application which I will talk about in another blog. I ended up cancelling my time deposit and my application for Instacard and applied for BPI Express Start program to a branch near my provincial home. The bank rep discouraged me to apply for express start and recommended that I try applying for a regular card first then apply for express start in case I get declined again. My hopes became so high again because the bank rep said that based on her assessment, I am really qualified and has a very high chance of getting approved but then I ended up getting declined for the Nth time. I really wanted a credit card for myself at that time so I decided to apply for BPI express start program at their Ayala 2 Branch in Makati. I can't remember the exact date I applied but it was around last week of February 2014 if I'm not mistaken. Then, 7 banking days later, my credit card was delivered to my provincial address. Ever since then, I have been enjoying the privelege of having a BPI credit card. Then a year later, those banks who declined my application before kept on calling and offered a credit card from their bank.
Below are some of the questions that you may have in mind.
Philippine Secured Credit Card Q & A
1. What is a secured credit card?
A secured credit card is a type of account that requires cash, that will be put on hold by the bank, which will serve as a collateral in exchange of a credit card from them.
2. How is secured credit card different from a regular card?
Secured credit card requires a deposit, which will be held by the bank, in exchange of a credit card. A regular card, does not require any collateral.
3. How much credit limit can I get with a secured credit card?
It actually depends on the amount of deposit that you will allow the bank to place on hold while you are using their credit card. Depending on the bank where you will apply, they may give you a credit limit that is equivalent to 80-100% of your hold out deposit.
4. Is there a minimum or maximum hold out deposit required to get a secured credit card in the Philippines?
From what I know, the lowest minimum hold out deposit is Php5,000. Some banks require at least Php10,000 or more. I haven't heard or read aything about maximum hold out deposit though. I think Philippine banks doesn't have maximum hold out deposit. You may deposit as much as you want provided that you will allow the bank to put it on hold while you're using their credit card.
5. Can I choose which card type I want?
Yes, but it is still subject for bank approval. Usually, they will give you a credit card that will match your hold out deposit. For example, if your hold out deposit is Php10,000 then the bank will allow you to choose from their classic cards. If your hold out deposit is Php100,000 or more then the bank may offer a gold or platinum or their other premium card.
6. Does secured credit card have annual fee?
Yes, except if you apply for secured credit card at the time that your bank of choice has free annual fee for life promo.
7. Can I use my secured credit card for installments?
Yes, provided that your available credit limit is equivalent or more than the total amount of the one you are purchasing. Sometimes, it will also depend on the merchant or bank. There are merchants that only accept installments for a specific bank. There are also credit cards that can't be used for installments though. But from what I know of, most if not all banks that offer secured credit cards can be used for installment.
8. Can I withdraw my hold out deposit after I got the credit card?
No. Unless the bank where you applied agreed to release your hold out deposit.
9. When can I request release of my hold out deposit?
Usually, a year after you applied for secured credit card. By that time, you already built a credit history.
10. Can I request conversion of my secured credit card to a regular credit card?
Yes, but it's still subject for bank approval. Usually, they will require you to submit income documents for evaluation. If you pass their evaluation then they will release your hold out deposit and convert your card to a regular card.
11. Can I cancel my credit card and request release of my hold out deposit?
Yes, provided that you do not have an outstanding balance on your card.
12. Can I use my hold out deposit to pay for my final bill?
From what I know of, you have to pay for your outstanding/final bill then after that will be the time that the bank will release your hold out deposit which will take around 30-60 days. I am not sure if the bank will allow you to use your hold out deposit to pay for your final bill without affecting your credit score.
13. What if I have unpaid credit card from another bank before? Can I still apply for a secured credit card?
From what I know of, you may still apply for a secured credit card. It will help you rebuild your credit history but it will be best if you settle your unpaid credit card bill first before doing so. I have read a story wherein someone applied for a secured credit card from the same bank where she has an unpaid credit card and the bank took her supposedly hold out deposit to pay for her unsettled bills.
14. Is secured credit card 100% approval?
According to advertisement, yes, but I read somewhere before wherein a woman was still declined despite having hold out deposit. She assumed it was because of her bad credit score due to unsettled credit card bill from another bank. There was also an instance wherein a guy with a bad credit score from unsettled credit card was able to get a secured credit card. I guess, it's a case to case basis but I personally think that settling your unpaid credit card first will be the best move for you.
13. Who can benefit from secured credit card?
People who has always been declined for a regular card. People who does not have income documents to provide but has enough money to shell out as a hold out deposit. People with bad credit history wishing to rebuild their credit score.
14. What are the documents needed?
In my experience with BPI, they only required me the submit a copy of valid IDs, proof of billing and my hold out deposit. Other banks may require other documents.
15. What are the banks in the Philippines that offers secured credit card?
As of this writing, these are the only banks I know that offers secured credit card. Please let me know in the comments section if there are other banks that I missed.
Bank of the Philippine Islands
Union Bank of the Philippines
RCBC
Security Bank
Metrobank
16. Which bank should I get a secured credit card?
I will be biased since I only had a BPI secured credit card. I haven't experienced secured credit card from other banks but I highly recommend BPI or Metrobank since they are "major" banks in the credit card business. And when I say major, what I meant was that if you have a credit card from BPI or Metrobank, it would be easier for you to be approved for credit card from other banks. It's not gonna be a guarantee but it will be like additional pogi or ganda points for you.
17. Should I get a Visa or Mastercard?
Both are widely accepted. You may want to review the perks from every bank and compare them. It will depend on your lifestyle and the perks that you can get from it. I have several credit cards now but most of it are mastercard. I only have 1 visa card so I can't say for sure.
18. Can I use my secured credit card as reference to a regular credit card application?
Yes, but most of the time, banks require that you have been using your credit card for at least 9 months or more before you can apply.
19. Will the other bank where I am applying for a regulard card know that I have a secured credit card? Will it affect my chances if getting approved for a regulard card?
I am not 100% sure of that. My hold out deposit was 37,500 and BPI gave me a Php30,000 credit limit and I was approved a regular card from other bank without being asked if I was usig a secured credit card or not. But I read somewhere before wherein the bank evaluator asked the applicant if he was using a secured credit card or not. He assumed it was because his credit limit was just Php5,000 or Php10,000. I really can't remember the exact amount of his credit limit coz it's been a long time and I wasn't able to follow up with him if he was approved a regular card or not. So I guess, if you're planning to get a secured credit card then after some time apply for a regular card, it would be better if your secured credit card limit is Php20,000 or more just to be safe.
20. How long before I can apply for a regular credit card from another bank?
It varies from bank to bank. Most of the banks require a minimum of 9 months but some requires at least a year of using the card before you can use your existing credit card as a reference card for your application.
I hope I was able to somehow shed some light regarding secured credit card. If you have any question or if you want to correct me, then please post it on the comments section below. I will answer your questions with best of my knowledge but then again, it is just purely based on my knowledge and experience. It will still be best to ask for more informatiom from your bank of choice.
Thanks for reading. Have a great day! God bless you. :)
I applied late last year for a credit card, first time ever and got declined... Considering I have peso/dollar savings with them and checking account. Well, I applied online which was probably my mistake. Nowhere in the online application form asking if you have existing account with them or not... I'm hitting my 40th birthday sometime soon. And I guess I'll be the next 40 yo virgin (credit card wise). I really don't know how they evaluate credit worthiness... What's their perception of someone who has the capacity to pay... I'd never go for a collateral CC, I understand some opt for it as a stepping stone for the "real deal". Oh well, never did sour grape when I got declined. But definitely I'm envious of people who enjoys a CC perks like monthly deferred payments on their purchase. Perhaps CC is not for me... (I-cash Ko nalang daw... Hehe)
ReplyDeleteHi Lawrence! I know how it feels like to be declined. Believe it or not, even if I have a regular card now, I was still declined by other banks. I also do not know how banks evaluate credit worthiness. Anyway, just try applying to other banks, maybe one of them will approve your application. You'll never know. I have a friend who also got frustrated because he was always declined but he tried applying to other banks and luckily, one bank entrusted him a high credit limit despite not having an existing credit card. Goodluck on your next application!
ReplyDeleteGood evening, I thought I should get back to you. I was able to muster enough courage after venting out here on your blog that I re-applied after 5 days. Got approved and got my cards earlier today. I actually have 3 cards now. First card I got last week. it's from a different bank that I have no existing account, I was given a basic card and a fair credit limit. 2 cards arrived today from the bank that I have savings account with, they gave me 2 different gold cards. After being declined by them they gave me 2. Talk about kiss and make up. Bumawi Sila.
ReplyDeletehi Lawrence. thanks for updating. wow! that's great! just make sure you use your card wisely. only swipe what you can pay every month. managing multiple cards can be hard but if you're disciplined enough then it won't be. congrats! happy swiping! ☺
ReplyDeleteThis post is very interesting. I love you're writing style, I pray you keep up the amazing blogging, I'll definitely come back
ReplyDeleteI have applied for a regular credit card from my mother bank (bdo). While waiting for approval, i applied for a secured credit card from bpi with 200k hold deposit. Now i was approved for a regular credit card from the bdo with 10000k limit. Should i cancel the secured credit card from bpi then? My bpi is platinum skymiles mastercard. Bdo gave me shopmore and jcb happy cat which share credit limit. Quite confused, first time cc user here. I am 30 y/o virgin.
ReplyDelete100k lang po
Deletehi mejo pogi. thanks for reading my blog. :) sorry for the very late response. i'm not active here but because of the quarantine, I suddenly remembered this. haha. anyway, if you think that you wouldn't need that money yet then just wait until a year and you can request your secured credit card to be converted to a regular cc but of course, if you need it then cancelling your bpi card would be the best choice. you may want to check with bpi if you can keep your card despite cancelling. they might give you a good deal. hope you can update us what happens. thank you and God bless!
ReplyDeletehi Batanguenio in the city. It has been a little over 6 months since I got my BPI secured cc with 180k CL. I received my BPI sky miles delta mastercard last january 13,2020. my BDO JCB lucky cat has been upgraded to JCB gold with increased CL from 100k-120k. nagpa increase ako this month lang ang reason ko is dahil sa installment offer sa sm pra hindi ko na i straight payment using ibang CC at nung maaprove ung increase CL nag try din ako nag request ng upgrade at sinwerteng inapproved ulit, puede na siyang pang apply sa korea after lockdown. By the way, around february this year nag apply din ako sa maraming banks for a regular cc using both my bdo and bpi cc as my reference kahit bagong bago, try lang ako libre naman mag testing hehe denied ako sa metrobank (may savings ako pero minimum lang laman for the past years sa metrobank), denied din sa AUB, Robinson's bank at Citibank. but surprisingly, na approve ako security bank,they grant me a platinum mastercard with what i have applied for with 180k CL. naalala ko pa kung gano ako kasaya nun lols kasi lahat ng inapplayan ko elite cards trip trip nlng kasi. at recently nga nag reapply ako sa Citi kulit kasi sa FB ng advertisement nila laging nag pa pop up sa FB pero denied parin siguro kasi wla pang 6months since the last time na nag apply ako. as of now, waiting ako sa rcbc nag apply ako last feb pa pero last week lang tumawag asking for the name na ilalagay sa card pero wla pa namang approval.
DeleteGoing back sa BPI secured cc with 200k hold out deposit, mag rerequest na akong ipa lift ito this week. try ko na ipa retain ang card pero kung denied. okay na kasi may 300k combined limit na sa BDO na 120k at SB na 180k more than enough na yun at magagamit naman sb sa Airport lounges so nit necessary na ikeep ko pa ung bpi secured cc ko. happy naman na ako dun. hopefully ma retain yung card. will give u an update once na may result na. hehe thank you po and God bless.
nakalimutan ko banggitin na 2cards pla ung ibibigay sna ng BDo kaya lang nag ka problema sa delivery nung isang card shopemore until now di pa nadedeliver. 7mos na lol. siguro kulang lang ako sa ff up. shared naman cl nila sa jcb kaya di ko na inasikaso. hehe
DeleteHi. Thanks for taking time to read my blog. Good to know that you now have regular cards because of your secured credit card. However, I personally recommend that you only keep about 2-3 credit cards kase the more limit you have, the more temptation magswipe (pero more fun din! Haha) Magiingat lang sa pagswipe. Always remember to swipe what you can pay. Please don't take it na minamaliit kita ha. Let us know what happened sa other application mo. God bless and stay safe. :)
DeleteHello, hiningan ako ng ITR ng BPI upon request ng card retention and hold out release, pero inassure ako ng kausap ko sa banko na maaapproved daw yung CC kasi marami naman ako accounts sakanila including investment funds unfortunately dun ibe base sa ITR CL ng CC ko sakanila. katatapos ko lang magfile ng quarterly sa BIR at since pandemic wla tourism dito samin kaya zero ang nilagay ko na income. Pointless pa na kumuha ako ng ITR kung wlang income na nakalagay dun, so i just decided to proceed with card cancellation pra marelease na yung hold out deposit ko. then kinancel nga yung card and the next day nakuha ko agad yung holdout deposit sa bank. By the way, yung rcbc na inaplayan ko last feb pa inaprove nila. i am so glad kasi visa platinum with 127k na CL
Delete, ganda ng perks when travelling. yun lang po salamat.