Choosing the best credit card can be overwhelming. It depends on your lifestyle and spending habits. You’re the only one who can decide which is the best.
These days banks are doing the best they can to entice Filipinos to apply for a new card with freebies, promos, and welcome e-gifts.
You have probably seen one or two ads for credit card applications and promos on your Facebook feed recently.
There are 3 common credit cards in the Philippines—cashback, air miles, and rewards credit cards.
So, which one should you choose? First things first, do your homework. Find out how each type works and if it suits your lifestyle, spending habits, and the pros and cons.
| Credit Card Type | Pros | Cons |
| Cashback card | Get cash rebates, ideal if your spending habits are predictable | Watch out for the minimum spend required, comes with a monthly or annual cap for rebates |
| Air miles card | No minimum spend, get free flights | Takes time to earn those points and redeem the air miles, like years, requires you to spend more to earn more points |
| Rewards card | Accelerated points for shoppers and dining transactions, frequent spender means more points | Takes time to redeem the exclusive merchandise items, some points expires, and other reward catalogues could be irrelevant to your interests or hobbies |
Cashback credit cards in the Philippines—is it for you?
You won’t literally receive P1,000 cash in hand if you have this card. But most credit cards have rewards points that can be converted into a cash voucher or manager’s cheque.
A cashback credit card offers you cash rebates, which are based on your spending for that billing cycle.
For example, you spend P10,000 for a billing cycle. And your cashback credit card offers 5% cash rebate, P500—this will be automatically credited to your account on your next bill. Some banks have a minimum amount required before the rebate is credited. For example, the EastWest EveryDay Titanium Mastercard will only credit the rebate once you accumulated P200 cash rebates.
Most cashback credit cards in the Philippines offer a small percentage from 0.50% up to 8%. The rates vary as it may also depend on the specific categories (e.g. dining, shopping, and groceries) while other merchant partners (restaurants, coffee shops, and retail stores) have limited or seasonal offers to entice you to swipe your card.
Here’s the caveat. Most of these cashback credit card have terms & conditions and minimum amount spending for you to get those rebates.
And if you’re just going to use the card to qualify on bonus tiers, you’ll be at the mercy of monthly interest rates and additional charges if you can’t settle your total amount due on your billing cycle.
So, be mindful of these things.
A cashback credit card is for you if…
- You don’t care about rewards points – if you don’t like collecting rewards or browsing the catalogues as to which voucher or gift certificate to claim, this one is for you.
- Your spending habits are entirely predictable and manageable – most of the cashback credit cards have minimum spend requirements and restrictions (e.g. a cap every billing cycle). If you think your monthly expenditure matches the sweet spot of the minimum spend requirement to get that rebate regularly, then this could be a good card type for you.
- You’re laidback and steady – you’re not aiming for those free trips to South Korea or Japan. You just need extra money to pay for bills. You’re just practical and steady.
Still thinking if this one is for you? Here’s what to look for when choosing a cashback credit card in the Philippines.
Should you get an air miles credit cards in the Philippines?
Browsing where to go next month and counting your Air Asia BIG points? You may want to consider air miles credit cards.
Some premium credit cards have both rewards and air miles offers, allowing you to convert your total rewards points to air miles like GetGo points for Cebu Pacific flights and AirAsia BIG points.
Other credit cards also offer free travel accident insurance aside from the air miles you earn like Mabuhay Miles, including exclusive access to airport lounges and other travel privileges.
But there’s a caveat when earning air miles. The multiplier to earn (1) one air miles isn’t always 1:1 for P1.
To be honest, it can take a long time for you to earn miles and you need to spend a lot and watch out for seasonal promos.
For example, to earn (1) one Mabuhay Miles, you need, five (5) regular points if your card is any of the following: BDO Classic MasterCard/Visa, JCB; BDO Gold MasterCard/Visa, JCB, UnionPay.
BDO premium credit cards like Platinum/Titanium Mastercard, Platinum Visa, and Diamond UnionPay can earn you two (2) elite points equivalent to one (1) mile.
If you have BPI SkyMiles Mastercard, every P45 spend earns you one (1) SkyMiles mile.
Earning points varies from one card to another, so it’s better to do the math if you think your monthly expenditure will help you earn more.
Air miles credit card is for you if…
- You spend a lot and plan to travel overseas – cardholders who spend a lot and have an air miles credit card will find that using it is quite frustrating unless you’re a big spender and travel overseas. If your work involves travelling overseas frequently, this card is for you.
- You like crunching numbers and being up to date with the latest promos – to maximise this card, you like numbers and are willing to compute and experiment on calculating your expenditure and the air miles you can possibly earn the next billing cycle. You’re also a keen watcher of travel promos.
- You like travelling, of course – this card is your lifesaver if you’re travelling for business or pleasure.
Are rewards credit cards in the Philippines really “rewarding?”
Most banks in the Philippines offer rewards credit cards where you earn rewards points for every peso you spend. When you accumulate these points (and reach around 3,000 points or more), you can redeem merchandise items, gift certificates, vouchers, air miles, or convert them into cash vouchers.
These rewards cards have a standard rewards point system, where you earn one (1) for every peso.
The lowest rate so far is P20 for one (1) rewards point. For example, if you spend P100, you earn five (5) rewards points.
Some rewards cards offer up to 5x accelerated points depending on the spending category of your transactions. For example, you earn 4x rewards points if you use your HSBC Red Mastercard for shopping transactions with their merchant partners.
The higher the multiplier or bonus points, it lets you collect more points quickly. The more you spend, especially if you strategise on your spending habits and how you use your card, you’ll earn more.
But you also have to check if there are expenditure caps per billing cycle. You might end up spending beyond your limit per month, and then those excess rewards aren’t credited to your card.
The rewards credit card is for you if…
- You want to earn air miles quickly – if you don’t spend much or you have a monthly budget for your expenses, you can already calculate how much rewards points you can earn. Pick a card that lets you earn accelerated points and then convert them to GetGo or AirAsia Big points to earn air miles. You can even earn faster this way if you pick the right card and spending categories.
- You don’t mind browsing rewards catalogues – let’s face it, some of us enjoy calculating our rewards points potential and browsing gift-certificates and vouchers.
Either way, we’d recommend that you browse the rewards catalogue first of the rewards card you’re planning to apply for, and if you think it suits your lifestyle, status, and spending habits – go for it!
So, which among the three should you choose?
Choosing the best credit card for you is always subjective. There are also contributing factors like annual income, lifestyle, spending habits, and how you want to use the card on spending categories.
To wrap up, a cashback credit card is for you if you like cash rebates and expenses are quite predictable.
Air miles credit card is for you if you consider yourself a to be a globetrotter and willing to spend money overseas.
Rewards credit cards are for you if you’re the type who knows your common spending categories and you probably would like to convert those points to air miles and travel once in a while.
Overall, you’re the only one who can decide which is best for you. But hopefully, we’ve got you heading in the right direction.