The Philippines may be the world’s social media capital, but when it comes to financial management, the people are woefully unable.
Only 15.8 million Filipino adults, or 22.6 percent, have bank accounts, according to the Bangko Sentral ng Pilipinas’ (BSP) 2017 Financial Inclusion Survey (FIS), leaving 77.4 percent unbanked.
Sixty percent of those without bank accounts said they couldn’t open one because they didn’t have enough money. Given this, it should come as no surprise that the percentage of Filipino adults who own credit cards is far lower.
In 2017, only 1.9 percent of adults had an active credit card, while only 21% had debit cards, according to the same poll. Only slightly more than a quarter of respondents (25.1%) made or received digital payments.
However, with the advent of ecommerce and internet purchasing, those figures are certain to rise.
What is the definition of a reloadable prepaid card?
The relatively tight restrictions for obtaining a credit card are one reason for the low rate of credit card holders in the Philippines. To be qualified for one, you must have a high enough salary and good credit.
To maintain them, though, you’d need financial discipline, since we’ve all known someone who let the temptation of spending without paying get the best of them, landing them in debt and having their credit card cancelled.
Reloadable prepaid cards are the better option in this situation.
The available funds in these cards are either placed by the cardholder or have been directly put into the card account via payroll direct deposit or government benefit deposit. This means you can’t spend money you don’t have, despite the ease of not having to carry cash.
Credit vs. Debit vs. Prepaid Card
All three card payment choices, as you might expect, have advantages and disadvantages.
What works for others may not work for you. Continue reading to get a better understanding of what you could require.
The credit card’s ideal for:
Big ticket purchases
If you’re moving to a new place and need a few appliances, spending your own money from a debit card will deplete your savings quickly.
However, many retailers accept credit cards and offer deferred payment plans, which allow you to pay in installments for 3, 6, 12, or even longer.
You can avoid paying cash up front by using a credit card. So, if you’re the sort who can keep oneself in check when it comes to credit card spending, having one would be quite useful.
People are hesitant to shop online due to security worries.
Unlike revealing your debit card information, which might allow a hacker to wipe your bank account clean, credit cards add an added degree of fraud protection. In the worst-case situation, it will take some time to deduct the illegally charged amount, but that is preferable than not having it at all.
Deferred payment options for some credit cards are also available on marketplaces like Lazada, which is always a benefit.
Increasing your credit score
Most people do not believe they are required to do so until they are.
If you ever need to apply for a mortgage or a vehicle loan, having high credit via your credit card history will help you get approved. If the banks see that you’ve been punctual in paying your credit card bills, your credit score will improve.
The debit card’s ideal for:
Small, routine purchases
Yes, credit cards are accepted, but when it’s a Grab charge here and a few items there, it’s easier to lose track of how much you’ve spent. Those few hundreds can quickly build up, and before you know it, you’ve racked up thousands in credit card debt.
Because debit cards (or even reloadable prepaid cards, more on that later) are directly debited from your bank account, you can keep track of these lesser expenses.
If you don’t manage your money well.
As previously stated, we’ve all known someone who forgot about their credit card limit and had to pay it back. Many of them have gotten themselves into credit card debt and have had their credit scores harmed.
If you’re concerned that this might happen to you, stick with debit cards. You can only spend what you have this way.
Prepaid cards with reloadable balances are ideal for:
Basically, a debit card is ideal for anything. You won’t go into debt because you can only swipe for what’s deposited into it, and you’ll be able to control impulse spending.
The extra benefit is that you can only load a limited amount of money onto your prepaid card, leaving your savings account untouched.
Pros and Cons of Visa/Mastercard Prepaid Cards
- Prepaid cards are often easy to obtain for almost everyone. Background checks and accompanying documentation are usually not necessary, as are current bank accounts. Simply provide a legitimate ID and, depending on the provider’s turnaround time, you should be ready to go.
- Reloading is simple – There are several reloading stations for the most popular prepaid cards. You can also transfer funds from your bank account to your prepaid card if you’re enrolled in your bank’s mobile banking.
- There is no requirement to keep a balance on prepaid cards because they are not linked to a bank account. You will not be charged any fees if you go without funds on your card for an extended length of time.
- If your prepaid card has the BancNet, Visa, or Mastercard logo on it, it will be accepted in any place that has a card terminal as long as it has sufficient money. Furthermore, some prepaid cards allow cardholders to accrue points that can be used for refunds, incentives, and other benefits.
- Fees — For all of the convenience that prepaid cards provide, there are a variety of fees that cardholders may face. There may be loading fees when you put money into it, withdrawal fees if you wish to put the money back into your bank account (if you’re even allowed to), balance inquiry fees, and fees from overseas transactions. Furthermore, unlike credit cards, which require you to purchase a new card when it expires, prepaid cards need you to purchase a new card.
- Loading limit – The amount of money you can load onto a prepaid card varies depending on the issuer. Reloading the card can become inconvenient if you’re a frequent user.
Best Reloadable Prepaid Cards in the Philippines
- PayMaya Visa EMV
- GCash Mastercard
- EON Card
- Amore Visa Prepaid Card (BPI)
- BDO Cash Card
- YAZZ VISA Prepaid Card
- PSBank Prepaid Mastercard
- SMART Money Card
- EastWest Prepaid Card
- Bayad Center Visa Card
- PNB Prepaid Card
- Landbank Cash Card
- UCPB Visa eMoney Card
- RCBC MyWallet Visa Prepaid Card
- Ceb GetGo Prepaid Card