If you are someone like me who has no luck in getting regular credit cards, then one of the best alternatives for you is to get a secured credit card.
In this article, learn what banks in the Philippines offer secured credit cards with the information about their required minimum deposit and how much they offer as credit limits.
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What is a Secured Credit Card?
A secured credit card is a type of credit card that uses a savings account or a time deposit as collateral or security deposit, which is not available for encashment while your credit card is still active and/or if you have an outstanding credit balance.
Since there’s collateral involved, applicants can expect 100% approval from the bank. Moreover, the application is quick and easy because secured credit cards don’t require the candidate to submit documents such as Income Tax Return (ITR).
How Much Is the Credit Limit of a Secured Credit Card?
The holdout deposit determines the credit limit of a secured credit card. This means that the higher your deposit, the higher your card credit limit is.
Generally, Philippines banks offer 80-100% of the holdout amount as the card limit. For example, if you have PHP 30,000 on your savings account as the holdout deposit, your credit limit can be PHP24,000 (80%), PHP27,000 (90%), or the whole amount.
Should You Get a Secured Credit Card?
There are a lot of reasons why you should consider getting a secured credit card. If you are someone who has a bad credit history, an online freelancer who is just starting, an unemployed with no income proof, or like me who are declined by banks several times for unknown reasons, then I highly recommend that you try availing of a secured credit card.
Furthermore, if you want to experience managing your finances with credit cards, then using a secured credit card is a good option. Since your credit limit is only a percentage of what you have in your bank, you can practice being in control of your finances without the risk of being buried in debt.
Now, let me give you a few more things that can help you decide whether or not a secured credit card is for you.
Benefits of Secured Credit Cards
- 100% Approval. Compared to regular credit cards, secured credit cards have a high chance of approval. A lot of banks claim that they have a 100% approval rate.
- Credit Limit Choice. Since your credit limit is dictated by your holdout deposit, you have control over it.
- Upgrade Option. This is one of the main reasons why people get secured credit cards. When you have proven that you are responsible in managing your credit, you can request your issuing bank to upgrade to an unsecured credit card.
- Credit History Building. Using your secured credit card responsibly will help you build your credit score and boost your creditworthiness.
Disadvantages of Secured Credit Cards
- Holdout Deposit Access. The money you deposited as the holdout amount won’t be accessible for you while you are using your credit card. This means that even if you have emergencies, you can’t withdraw your money.
- Fewer Rewards. One of the best things about using a credit card is the rewards that you can get. But with secured credit cards, there are fewer or no rewards for any transactions you made using the card.
- Small Interest. The cash deposit you have as collateral for your card will only earn little interest depending on your issuing bank. If you deposit that money into a savings account with high-interest rates, you can receive up to 6% per annum interest.
- Fees. Like a regular credit card, secured credit cards have fees that you should be aware of such as annual fees, late payment fees, and cash-advance fees.
The Best Secured Credit Card in the Philippines for 2021?
There are a lot of banks in the Philippines that offer secured credit cards. The list below is not in a particular order and the information I wrote are from my personal experience and from researches I conducted.
I highly recommend that you should still check the bank’s website for updated and latest information.
NOTE: The fees I listed are only SOME of the fees that you should consider understanding when applying for each of the secured credit card issuers I listed below.
BDO Secured Credit Card
BDO is one of the banks in the Philippines that promise guaranteed approval when you apply for their secured credit card.
BDO offers a 90% credit limit for a Peso deposit, while 80% is for a Dollar deposit account. Moreover, the holdout amount should not be less than PHP10,000.
As for the holdout deposit, you can only get it 60 days after you cancel your card given that you don’t have any outstanding balance on your account.
BDO Secured Credit Card Fees
Annual fee: PHP1,500 to PHP5,000
Cash advance fee: PHP200 or USD 4
Late payment fee: 7% of the overdue amount
Overlimit fee: PHP750
Security Bank Secured Credit Card
Security Bank also guarantees 100% approval for their Fast Track secured credit card. Moreover, their website claims that they can process your application within 3 banking days upon receipt of your documents.
Security Bank requires at least PHP15,000 deposit on your savings account and/or PHP100,000 on your time-deposit account. Furthermore, your credit limit will be 80% of your holdout deposit.
One thing I like about Security Bank is that they waive the annual fee for your card in your first year. In addition, you are entitled to rewards and rebates when you use your credit card.
Security Bank Secured Credit Card Fees
Annual fee: PHP2,000 – PHP5,000 after your first year
Cash advance fee: PHP 200 or USD 4
Late payment fee: 1.50%
Overlimit fee: PHP500
RCBC Secured Credit Card
With the option to determine your credit limit, which is 90% of your holdout amount, RCBC Bankard InstaCard is another great option to avail of a secured credit card.
RCBC requires a minimum of PHP10,000 or USD2,000 for the holdout deposit. This amount can only be withdrawn 60 days after your card cancellation.
RCBC’s secured credit card comes with a free membership fee for the first year and lower than usual for the succeeding years.
RCBC Secured Credit Card Fees
Annual fee: PHP0 to PHP3,600
Cash advance fee: PHP200
Late payment fee: PHP850 or the minimum amount due, whichever is lower.
Overlimit fee: PHP600
BPI Secured Credit Card
Bank of the Philippine Islands is the second to the last on this list of banks in the Philippines that offer secured credit cards.
BPI requires the applicants to open either an ATM or passbook savings account with at least PHP10,000 holdout deposit or PHP50,000 for a time-deposit account. This bank offers a credit limit of 90% of the holdout amount.
BPI Secured Credit Card Fees
Annual fee: PHP1,550 to PHP5,000
Cash advance fee: PHP200
Late payment fee: PHP850 or equivalent to the value of the unpaid minimum amount due, whichever is lower
Metrobank Secured Credit Card
With no income documents required and no landline requirement, Metrobank promises 100% approval for their Save & Swipe secured credit card.
Metrobank requires a minimum deposit of PHP12,000, which comes with a 100% credit limit.
Metrobank Secured Credit Card Fees
Annual fee: PHP0 to PHP6,000
Cash advance fee: PHP200
Interest: 1.88% to 2%
Late payment fee: PHP850, USD 20, or 3% of the outstanding balance, whichever is lower.
Overlimit fee: PHP750
Which is the Best Secured Credit Card?
Now that we have uncovered 5 Philippine banks that offer secured credit cards, you might ask me which of these is the best bank to apply for.
Well, my answer is it depends on your preferences and which card meets your requirements.
For example, if you are only willing to put PHP10,000 as your holdout deposit and you want to have a higher credit limit, then you should consider getting either the BPI or RCBC credit cards because both offer a credit limit of 90% of your holdout amount.
However, if you are looking for secured credit cards with a free annual fee for the first 12 months, then you should choose between RCBC and Security Bank.
Overview of the Secured Credit Card in the Philippines
|BANK||MINIMUM DEPOSIT||CREDIT LIMIT|
|BDO||PHP10,000||80% of deposit|
|Security Bank||PHP15,000 for savings account / PHP100,000 for time deposit||80% of deposit|
|RCBC||PHP 10,000||90% of deposit|
|BPI||PHP10,000 for ATM / PHP50,000 for Time Deposit||90% of deposit|
|Metrobank||PHP12,000||100% of deposit|
A secured credit card is a great alternative to a regular credit card. The main difference between the two is that to get a secured credit card, you need to have a holdout deposit to serve as collateral.
Since most secured credit cards have a 100% approval rate, they are a great option for people who have difficulty in availing of regular credit cards.
We hope that this article helped you learn more about secured credit cards and where to get one.
Do you have a secured credit card? Which Philippine bank did you get it from?