Have you been offered your first credit card? Then congratulations! This must mean that you now have a steady income stream, and that banks feel confident that you can pay back money that you owe.
Before you activate the card, though, consider comparing it to several other credit cards so you can get the best deal. Here are some features you should look for:
1. Low interest rates
As a newcomer in the workforce, the last thing you want is for your entire salary to just go to paying off interest rates. Many credit cards try to lure you in with low "promotional" interest charges at first, and then start charging you their "regular" (read: high) rates just after a few months.
To make sure you don't fall into the trap, clarify how long the promotional rates will last. Better yet, sign up with a card that guarantees fixed interest for at least one year.
2. Minimal hidden charges
Most banks charge "miscellaneous" fees left and right. You pay an application fee, an annual fee, account service charges, overlimit fees, late payment fees, cash advance fees, etc. That's how they make most of their money.
You can generally avoid these hidden charges if you pay at least the minimum amount on time, every time. However, there may be months when you simply forget to pay or run out of funds, plain and simple. By getting a credit card that charges a sensible amount for late payment, you can save a few hundred pesos.
3. Perks that suit your lifestyle
If you travel a lot, choose a first credit card that gives you miles you can use for free flights or upgrades, companion tickets, and other airlines perks. Citibank's "Premiere Miles" card lets you earn a non-expiring mile for every P45.00 you spend. What's more, you can use them on more than 50 carriers, including Cathay Pacific, PAL, Thai Airways, and Singapore Airlines.
There are also providers that give you free life and hospitalization insurance coverage, such as EastWest Bank and BPI.
4. Manageable credit limit
Most first credit cards let you borrow anywhere from P10,000 to P40,000. That may seem small, but for a first-time user, that's enough. You're just starting out, so don't get too carried away. Start with a lower credit limit, and once you feel confident that you can already manage your finances properly, apply for more.
Have you been offered your first credit card? Then congratulations! This must mean that you now have a steady income stream, and that banks feel confident that you can pay back money that you owe.
Before you activate the card, though, consider comparing it to several other credit cards so you can get the best deal. Here are some features you should look for:
1. Low interest rates
As a newcomer in the workforce, the last thing you want is for your entire salary to just go to paying off interest rates. Many credit cards try to lure you in with low "promotional" interest charges at first, and then start charging you their "regular" (read: high) rates just after a few months.
To make sure you don't fall into the trap, clarify how long the promotional rates will last. Better yet, sign up with a card that guarantees fixed interest for at least one year.
2. Minimal hidden charges
Most banks charge "miscellaneous" fees left and right. You pay an application fee, an annual fee, account service charges, overlimit fees, late payment fees, cash advance fees, etc. That's how they make most of their money.
You can generally avoid these hidden charges if you pay at least the minimum amount on time, every time. However, there may be months when you simply forget to pay or run out of funds, plain and simple. By getting a credit card that charges a sensible amount for late payment, you can save a few hundred pesos.
3. Perks that suit your lifestyle
If you travel a lot, choose a first credit card that gives you miles you can use for free flights or upgrades, companion tickets, and other airlines perks. Citibank's "Premiere Miles" card lets you earn a non-expiring mile for every P45.00 you spend. What's more, you can use them on more than 50 carriers, including Cathay Pacific, PAL, Thai Airways, and Singapore Airlines.
There are also providers that give you free life and hospitalization insurance coverage, such as EastWest Bank and BPI.
4. Manageable credit limit
Most first credit cards let you borrow anywhere from P10,000 to P40,000. That may seem small, but for a first-time user, that's enough. You're just starting out, so don't get too carried away. Start with a lower credit limit, and once you feel confident that you can already manage your finances properly, apply for more.
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