Few things are more enthralling than the idea of finally coming into adulthood, but one of the least anticipated aspects of it is becoming more independent and self-determined with one’s finances. One of the biggest decisions you’ll soon face when you start “adulting” is whether to stick with a simple debit card attached to your primary bank account, or to branch out and get a credit card as well.
It’s true that credit cards can serve as a convenient way to make purchases, even when you don’t have cash on hand. But they come with responsibilities, fees, and risks, too. No one should think of a credit card as free money—every peso you spend has to be paid back, usually within a month. Interest charges can add up quickly otherwise; for example, if you charge PHP 1,500 to your card and miss the payment deadline, you could add as much as PHP 750 in penalties to your bill.
Before any young adult in the country applies for their first credit card Philippines program, they’ll need to know how they work and whether they’re prepared to meet the financial obligations that come with a credit card. If you’re wondering whether you’re ready to get your first credit card, here are six signs that you may be:
1) You Have a Strong Financial Foundation
First, you’ll want to have enough in your savings account before you even think about getting a credit card. Your savings should act as your emergency funds for unexpected costs like medical bills, vehicle repairs, or the sudden loss of your job. If you don’t have a substantial enough amount in your savings account, you might end up relying on a credit card for emergencies, which can spiral into debt if you can’t pay it off quickly.
Your savings should also provide a safety net for your credit card bills. If you accidentally overspend one month, you should be able to dip into your savings to cover the payment and protect your credit score. A good financial cushion makes managing a credit card and avoiding long-term debt much easier, so if you know that you have one, it may be a good time to apply for a credit card.
2) You Have a Stable Income
Responsible credit card use will only be possible if you have a reliable source of income. While you don’t
need to earn a huge salary, your income should be consistent and substantial enough for you to regularly pay off your balances.
If you’ve recently started a job, spend a few months practicing good financial discipline with your salary before taking on the added responsibility of a credit card. Only when you feel like this is possible with your income should you pursue your credit card application.
3) You’ve Mastered the Art and Science of Budgeting
Budgeting is all about organization and control—knowing how much you make, where it’s going, and ensuring you’re spending less than you earn. Your ownership of a credit card should improve and not detract from the self-discipline you’ve built with your budgeting skills.
For example, impulse buying is a common pitfall for new credit card users. But with solid budgeting skills and good organization, you should be able to plan and track your purchases, regularly monitor your expenses, review your billing statements for errors or unauthorized charges, and avoid spending more than you can afford.
Staying organized will also allow you to maximize card rewards like points, cashback, or travel miles by aligning your spending with the card’s benefits. Thus, if you’re confident about how organized and disciplined you can be with your budget, perhaps you can say yes to a credit card.
4) You Understand How Credit Cards Work
Many banks offer starter credit cards designed for beginners. These often come with low fees, manageable credit limits, and easier approval requirements. However, don't just sign up without reading the fine print! It's important to understand key terms like the card’s annual percentage rate (APR), which is the interest rate on unpaid balances; the minimum payment, or the smallest amount you must pay each month to avoid late fees; and the credit limit, or the maximum you can charge (which may increase over time with good credit history).
A credit card may seem like a convenient “swipe-and-go” kind of financial tool, but each transaction will impact your credit score. In the Philippines, the Credit Information Corporation (CIC) tracks your credit data. When you apply for loans or mortgages in the future, banks will review this history to determine your financial reliability. This can’t be emphasized enough: pay on time, every time.
Timely payments are the foundation of good credit. Whenever possible, you should be prepared to pay your balance in full to avoid interest charges. If that’s not feasible, you should be ready to at least cover the minimum payment to avoid late fees. Only if you know you can maintain your creditworthiness should you apply for a credit card with your bank.
5) You’ve Paid Off Your Existing Debts
Do you already have debts, like personal loans or payday advances? Remember that adding high-interest credit card debt to your financial mix can make things worse. Focus on paying off your existing debts first before getting a credit card. If you have, and you can confidently say that you have a clean slate, you may be ready for your first credit card.
6) You Know What You’ll Use Your Credit Card For
Lastly, think about why you want a credit card in the first place. Are you looking to build your credit, earn rewards because you’ve started traveling a lot for work, or make online purchases that reflect a lifestyle change? Your choice of card should be able to serve you in fulfillment of those goals.
If you love to travel, for example, you’ll benefit from a travel rewards card offering miles or flight discounts. On the other hand, if you plan to use your card for everyday spending, check out cashback cards for savings on groceries, fuel, and bills. Once you have a handle on the kinds of benefits you desire, as well as an idea of how your credit card will fit into your lifestyle, that’s when you can apply with full confidence.
Evaluate Your Readiness
If you answered “yes” to all the items above, you might be ready for your first credit card. But remember: there’s no rush. Take your time to do some research about local credit card programs and look for low fees, simple terms, and benefits that actually match your financial goals.
Begin with a modest credit limit, stay disciplined in your spending approach, and enjoy the perks of responsible credit card use. As long as the timing is right and you have the correct mindset for practicing financial discipline with your funds, your first credit card can be a powerful stepping stone towards greater financial freedom in the future.