Ultimate Guide to Cards Issued by Philippine Banks in 2022

In an ideal world, you and I would only use one card for all of our banking needs. In reality, this is simply not the case. Let me explain the various plastic cards issued by banks, what each is intended for, and which card is best suited to your needs.

In this article, we will discuss the following products:

  • Debit card
  • Payroll card
  • Credit card
  • Prepaid card
  • Prepaid debit card
  • Gift card

Debit card

A debit card is similar to cash. You can use it to make purchases in stores that accept electronic payments (EPS). It can be used to withdraw cash from an automated teller machine (ATM) and then use it to make payments. It is linked to a savings account.

What are the advantages of a debit card in the Philippines?

  • Security. You have a safe place to keep your cash that you are not currently spending.
  • Interest. The deposit earns a small amount of interest.
  • Deposit Insurance. Deposits are protected from the bank’s poor financial health, ensuring that you get your money back even if the bank fails. The Philippine Deposit Insurance Company (PDIC) insures your combined deposits in each bank up to 500,000 pesos.
  • Liquid. It’s a liquid. It can be easily converted to cash and used right away.
  • No Expiry. It is active as long as the savings account is open and has funds in it.

What are the disadvantages debit card in the Philippines?

  • Encourages Spending. Perhaps the most significant disadvantage is the ease with which it can be converted to cash. It’s far too tempting to withdraw your money for any reason. It is not an effective method of encouraging you to save.
  • No cash advance. Your ability to obtain funds is determined by your available balance. Unlike a credit card, it does not facilitate borrowing or small loans. You can only withdraw what you have in your deposit.
  • Restrictions. At all times, you must maintain a certain level of balance. If your deposit is insufficient, you may be penalized. You may also be limited to the number of withdrawals you can make in a single day.
  • Cost of missed opportunities. It is not a good option if you want your money to grow. The interest you earn over the course of a year is less than what you could earn by investing in a managed fund, for example. In exchange for the small earnings, you can be certain that your money is safe, as opposed to the real risk of losing money in poor investments.

That is why, in our opinion, it is critical to consider how much of a “rainy day” fund to set aside in a savings account (or debit card) and how much money you can spare for investing.

Purpose of a Debit Card

Its purpose is to keep things safe. It is safer than carrying actual bills with you or stashing money that you do not intend to spend in a hidden place. It’s a safe way to keep cash on hand and allows you to get money whenever it’s convenient or when you need it.

A good example of its application is as a means of storing money for your weekly allowance and later withdrawing it when you’re running low on cash.

Another reason to get a debit card is to start or build a “rainy day” or emergency fund. It is typically used in an emergency situation because you can obtain cash quickly. Personally, as previously stated, this can be a disadvantage.

It is possible to use it in some banks when traveling abroad. Upon request, international access can be activated. You can then withdraw money from ATMs of partner banks in another country.

How to Apply for a Debit Card in the Philippines

Go to your bank. Bring proof of billing, a picture (either 2×2 or 1×1), a valid ID, and a minimum opening deposit.

Payroll ATM card

An employer will provide you with a payroll ATM card in order to credit your salary. It functions similarly to a debit card. It is used to obtain cash from an ATM in a convenient manner.

Most of the time, it can also be swiped at an EPS for in-store purchases. The majority of payroll cards are not linked to an account that can be actively managed.

Instead of you depositing money into the account, it receives funds from an employer who transfers funds during payday.

Advantages of a Payroll ATM Card

It has all the advantages of a debit card, plus the following:

  • Ease. You no longer have to be concerned about how to best conceal a large pay-out traveling from work to your home. Instead, all of your pay can be viewed and withdrawn in smaller amounts from a secure ATM.
  • No Maintaining Balance. In contrast to a debit card, it can be zeroed out without penalty.

Disadvantages of Payroll ATM Card

It has all of the drawbacks of a debit card. Some banks will not accept deposits from anyone other than the employer.

This means that if you quit or are fired from your job, its only source of funding (your salary) is cut off, and it is eventually deactivated.

Banks can sometimes convert it to a debit card, but you must first open a savings account.

Purpose of a Payroll ATM Card

The purpose of a payroll card is simply to serve as a means for your employer to pay you. It cannot be requested in person, as a debit card can.

Instead, only businesses with a certain workforce size that meet the requirements can set up an account that allows it to be issued to employees.

How to Apply for a Payroll ATM Card in the Philippines

Applying for a payroll ATM card depends on your employer. Please consult your manager about this product.

Credit Card

A credit card is given to someone who has a credit agreement with a bank. It is a type of card that allows for small loans and payments for purchases without the need for cash upfront.

It can be used to withdraw cash from ATMs and make payments in stores that accept EPS, just like a debit card. It can be used to have your PayPal account verified.

However, unlike a debit card, it provides cash without requiring a deposit. The cardholder receives a bill or a statement from the bank detailing the amount of borrowed cash and total purchases that must be paid. Its continued use is contingent on whether the bill is paid in full or in part.

Advantages of Using a Credit Card in the Philippines

  • Cash advance. Unlike a debit card or payroll card that requires a deposit before you can get money from an ATM, it allows borrowing of instant cash when needed.
  • No deposit. The cardholder does not need to make a deposit to an account. The bank stands by the cardholder, and guarantees his or her loan and spending. Cardholder will then pay when the bill is generated.
  • Credit score. also helps establish a good credit history when the cardholder pays the bill on time. A good credit history makes the cardholder attractive to banks and institutions for more borrowing, such as getting a house or car loan.
  • Accepted locally and abroad. There is a wider range of participating stores, physical or online, that accepts it as a form of payment than that of a debit or payroll card.
  • Perks. Lastly, its use allows one to join promos, get rebates, and enjoy special discounts.

Disadvantages of Using a Credit Card in the Philippines

  • Application. Applying for a credit card is more difficult than opening a savings account. It takes longer for an application to be approved, and there is a chance that it will be denied. It necessitates a certain level of income and lifestyle. It is sometimes necessary to put up collateral, such as real estate or vehicles. Due to accumulated debt from unpaid bills, they may be seized by the bank.
  • Charges and fees. Even if it is not used, the cardholder is still required to pay the annual fees. Every purchase or small loan must be repaid with interest. A late fee is imposed if the bill is not paid on time. Some purchases, such as those made abroad, may also be subject to a transaction fee.
  • Credit limit. The bank also establishes a credit limit, which is the maximum amount of debt that a cardholder may incur. When the limit is reached, three things can happen: the credit card is temporarily disabled, all additional purchases made with it are no longer permitted, and an overdraft fee is charged to the cardholder.
  • Ruined credit score. The charges, fees, and actual debt, combined with a lack of sound financial planning, may render the cardholder unable to pay on time and difficult to settle the bills. A poor credit history or credit score makes it difficult to obtain loans such as a home loan or a car loan.
  • Expiry. It usually expires after a certain period. A new card will then be issued by bank. If you haven’t receive the replacement yet, you won’t be able to use the old card anymore.

Purpose of a Credit Card in the Philippines

The use of a credit card is not inherently bad. It must be used with intention and discipline.

Our entrepreneur friend believes he requires it for his small but thriving business. It also aids him in making online purchases, booking tickets and trips, and saving for emergencies.

However, encourages bad spending habits. It makes it more difficult to begin and maintain savings. Either stop using it immediately or find a way to repay the debt and close the credit card account. This is sound financial advice.

How to Apply for a Credit Card

Go to the bank that is most convenient for you. Bring billing proof, a picture of yourself, and government-issued identification cards.

You may be required to provide proof of income, such as payslips, income tax returns, certificates of employment, and other similar documents.

Prepaid Card

A prepaid card is a combination between a credit card and a payroll card. It, like a credit card, is an accepted form of payment at a wide range of local and foreign stores, both physical and virtual.

The difference is that you do not need to have a standing credit arrangement with the bank. That is, you can only use it when it has an available balance.

You can load it with cash at a teller or with an electronic transfer from one of your other accounts. It does not need to be linked to a savings account, as a debit card is.

Advantages of a Prepaid Card

  • Better than credit card. It’s an excellent alternative. It is accepted in domestic and international stores as a form of payment. You can shop at the same participating stores, whether online or in person.
  • Paypal. It can also be used to verify your PayPal account.
  • Less fees. There are no annual fees, late payment fees, interest charges, or other similar costs. There are no bills to be concerned about.
  • Control spending. The most significant advantage is that it allows you to manage your spending. You can choose how much money to put into it.
  • No maintaining balance. There is no maintaining balance, so you will not be penalized.
  • Perks. You can also participate in promos, rewards, and rebates.
  • 100% approval. Application is also easy. In fact, some banks offer to approve every application they receive.

Disadvantage of a Prepaid Card

  • Expiry. Prepaid cards have an expiration date. It is valid for two to four years. When this occurs, it is automatically deactivated and no longer usable.
  • Fees. Applying for a new prepaid or renewing an expired one costs around Php350-500. If no purchases are made for six (6) months, an inactivity fee may be assessed. For international purchases, Visa/exchange Mastercard’s rate is used, which may be higher than the published rate on the day of purchase. A transaction fee is possible. If the funds are not used by the expiration date, a fee is charged.
  • Not liquid. That is, unlike a debit card, a payroll card, or a credit card, it cannot be converted to cash. Once funds are loaded, the only way to spend them is to pay for goods and services electronically.

Purpose of Bank Prepaid Card

This is best for people who want to make online purchases but don’t want the costs and hassles of a credit card. It is also suitable for those who want to keep track of their spending.

How to Apply for a Prepaid Card in Banks

The application process is also simple, and some banks accept all applicants. Visit a bank. Bring billing proof, a valid ID, and the application fee in cash.

Prepaid Debit Card

A prepaid debit card combines the convenience of a prepaid card with the power of a debit card. It is linked to a savings account for deposits, which can then be used as payment for purchases made in participating physical or virtual stores across the country and internationally.

Advantages of a Prepaid Debit Card

  • One account, one card. There is no need to open a separate account for each debit card and prepaid card. Both can be done with the same account. And only one card is required to handle the majority of your transactions.
  • Remittance. Some banks provide direct remittances from people living abroad. This is possible because it is linked to the international banking system while also being linked to a personal savings account.
  • Cashless shopping. It is generally accepted as a valid method of payment when shopping in stores.
  • Paypal verification. It can be used to verify PayPal, but this can vary between banks. Some allow it, others don’t.
  • Liquid. It can be cconverted to cash easily by withdrawing from an ATM or via a teller.

Disadvantages of a Prepaid Debit Card

It has all the disadvantages of a debit card, including:

  • Cashflow management.  If only one card is used, it is difficult to track spending and saving. It’s easy to succumb to impulse buying.
  • Fees. The fees are almost the same as, or even the same as, those for a prepaid card. Use the Visa/Mastercard exchange rate if you make a purchase outside of the United States. There may also be a currency conversion fee or a fee for making a deal.

Purpose of Prepaid Debit Card

This is appropriate if you want to keep all accounts in one place, saving you from having to deal with multiple statements, multiple accounts, and so on.

How to Apply for a Prepaid Debit Card in the Philippines

Go to your bank. Bring proof of billing, a picture (either 2×2 or 1×1), a valid ID, and a minimum opening deposit.

Gift Card in the Philippines

A gift card is another type of card that can be loaded with funds and then used to pay in accredited stores across the country, both physical and virtual. Some, particularly those with the Visa/Mastercard logo, can be used to make purchases all over the world.

It differs from all other cards in that it expires when the load is depleted or when the expiry date is reached, whichever comes first. The expiration date is less than that of a prepaid card or credit card. Some banks allow for a long expiry date, such as two years, but charge fees to keep the card active.

Advantages of a Prepaid Debit Card

  • Easy application. Few documents are required to request for a gift card.
  • No savings account. It does not need a savings account to be active.
  • Cashless shopping. It is accepted as a valid payment in affiliated establishments. Check with your bank whether it can be used for online and worldwide payments too.
  • Affordable loading amount. A few banks allow you to load as low as Php150. Some of them also allow a high maximum amount of Php20K.
  • No PIN. It does not require an code or PIN. The card and your signature on the purchase slip is enough to validate the payment.

Disadvantages of a Prepaid Debit Card

  • Fees. Getting one requires paying an application fee.
  • Not liquid. It cannot be used in ATM’s to withdraw cash.
  • No interest. The money loaded to it does not earn any interest.
  • Expiry. It deactivates when the load reaches zero. When the load is not consumed, it expires automatically after a certain period. A couple of banks allow some gift cards to be active as long as a year or two. But it charges a fee on the third month from application day.

Purpose of a Gift Card

It is intended to be given as a gift or reward. It is appropriate for those who do not want to give cash and prefer that the recipient choose what to purchase as a gift.

It is also ideal for businesses to reward and recognize deserving employees, or for parents to give to their children in recognition of achievement or good behavior.

How to Apply for a Gift Card in the Philippines

Bring a valid ID and proceed to your bank.