The Dangers of Holding Philippine Credit Cards, Updated…


I wrote the post below about 3.5 years ago, and I am posting it again today for a number of reasons, one of which is that I am in the middle of another credit card situation and am working it out as I type this. However, I wish to reiterate (to a much larger audience/readership of today) several risks that put the onus or burden on the consumer rather than the credit card company. I am getting so sick and tired of credit card companies charging what are in my opinion close to usurious interest rates, using profits from responsible consumers to fund unusually high delinquent accounts and yet still make very high profits, AND effectively placing the bulk of the risk of loss on the consumer even in cases of theft, forgeries, etc. I wish whoever wins the May elections for President will support a NEW consumer rights bill with respect to credit cards… it would affect/protect some 2+ million productive members of Philippine society and force big business/banks/credit card companies to act in a manner consistent with other countries with extensive credit cards businesses around the the globe.

Here’s a bit of a reminder in case you have had blinders on lately:

!. If your current credit card company charges a 3.50% Monthly (compounded) interest rate on outstanding balances, you are effectively paying an annualized interest rate of 51.11%!!! Considering that the best deposits on your funds today are probably yielding some 2-3% per annum, that translates to a gross spread for banks of some 48.00% per annum! If you are a prime customer, and are only being charged 3.00% per month, then the annualized rate is 42.58%! If you miss making a monthly payment on time, the late fees and interest rates of some banks at 7.5% are EQUIVALENT to an annual rate of over 130%!!! These rates are comparable/even far worse than what pawnshops charge and other forms of “fringe” financing. It is interesting to note that the term “USURY” is often defined as “charging excessive or exorbitant rates of interest”. Now when are lawmakers going to decide what is usurious or not? Calling any credible congressmen… I would be willing to volunteer my analytical and financial background for FREE if you want to make these credit card laws more consumer friendly!

2. Credit card companies in the Philippines appear to have very high loan losses on credit card outstandings, estimated between 15-20%, so it seems that the credit quality of borrowers is something that banks don’t seem to strictly manage. Why should good customers who have paid their bills on time, be penalized with high interest rates to make up for an unusually high delinquency rate? Having said that, even if 20% of all outstandings aren’t paid back, since the card companies are charging some 40%+ in interest, they STILL potentially make a lot of money on their credit card businesses.

3. The Philippines is one of the few countries where the credit card companies have CLEVERLY managed to get LEGISLATION that is ANTI-CONSUMER in that if your credit card is stolen and used by a thief, it is the CARDHOLDER who is liable for the charges until the credit card company is verbally or in writing advised of the loss. Therefor, no merchant, no credit card company has the legal incentive to PROTECT its clients, rather they have the RIGHT to go after innocent cardholders, more on this, read below…

The general intelligent wisdom is that one should carry “plastic” or credit cards instead of cash, so that if you are pickpocketed or murdered and your wallet is stolen, then the thief gets your cash and possibly attempts to use your credit cards. In most intelligent, logical and consumer friendly societies, any fraudulent use of your credit card would not be your liability and the credit card companies swallow the loss and use their insurance or their specific reserves to cover such instances. That makes sense, right? In fact, credit card companies in the United States specifically tell you that you are only liable for say $50 in case of theft, whether or not you had the chance to call the card company before the thief got to use your card. That would be a reason why one would carry plastic instead of cash. But we live in the Philippines, the land of occasionally utterly stupid, senseless and bizarre credit card and other laws put in place or perpetuated or unchanged by some idiots who themselves have been reported to charge on their local credit cards outrageously expensive watches for their teeny bopper kids while they “serve” their countrymen…

What am I blathering about? It seems that in the Philippines, if you own a credit card and it is stolen, the cardholder is completely liable for all the fraudulent charges up until your credit limit unless you have already phoned the credit card company to warn them you have lost your card. So what if your card was stolen from your hotel room or gym locker room while you were playing tennis and you didn’t notice the loss till the next day? Yup, you got it. It’s completely YOUR ass that is on the line. In other words, if you don’t inform the card company, they hold you liable for the losses, and that is the ridiculous law at the moment. In other words, it is actually potentially far more costly for you to carry a Philippine credit card as you could lose thousands and thousands depending on your credit limit rather than just the cash in your wallet.

When I learned of this pathetic situation a few months ago when acquaintances lost their wallets and thieves racked up massive bills on their behalf, I intentionally started to leave most of my local credit cards at home. I didn’t put a post on the matter then as it would seem like I was just harping at a law that is impossible to change. But events in the past 24 hours lead me to post this warning for the benefit of my readers and your friends. I kid you not. If you have say a PHP100,000 limit on your card and someone else charges on it, you will be required to pay that PHP100,000 or be in violation of the law as it is currently written; in fact, in theory, you would be the criminal with the liability to the credit card company.

Never mind that your card was stolen, that the charges were fraudulent, that the signatures are false and that you had an unusual level of charge activity…it is YOUR ass on the line. And for that privilege you pay a hefty annual fee and a nearly usurious (in my opinion) 3.5% per month interest charge on any outstandings (that translates to over 50% in compound annual interest for those of you who never bothered to calculate it!). So what good is the local credit card if your potential liability is worse than the cash in your wallet??? Why can’t lawmakers read this and do something about it? Where do all those annual fees go if not to put measures in place to protect customers? Out-bloody-rageous, if you ask me.

Here are Marketman’s serious tips to help insulate you from unnecessary credit card losses; please forward to your friends if you care about them:

1. Check your local credit limits right this instant. If the total credit limits far exceed your normal or even peak usage, call your credit card companies IMMEDIATELY and ask them to lower your limits to a level you can truly manage.

2. When you go out and it is not likely that you are going to max out your cards, do NOT bring all of your local cards with you…leave some safely put away at home.

3. Every evening when you get home, check your wallet to make sure all of your credit cards are in their slots, if not, call the credit card company immediately even if you are unsure where your card is. It’s easier to have a new one issued than to risk a PHP50,000 charge on your stolen card.

4. In a restaurant, always leave those faux leather jackets/folders that they use for credit cards OPEN on the dining table, this will make you more cognizant of the fact that you may have left your card still in the jacket.

5. Beware of unsolicited increases to your credit limits, reject these unless you really use the additional limits. Just think, if 500,000 consumers are given a PHP20,000 increase that is PHP10 billion more in open credit limits and if only 1% are subject to fraud, that is a potential PHP100 million that the credit card companies can come after clients like you and me for!

In other countries where they protect consumers, it is fine to have huge credit card limits for that occasional, “just in case” need. In the Philippines, it’s best the have the lowest possible limits instead.

Share on facebook
Share on twitter
Share on pinterest

86 Responses

  1. I used to have a Philippine credit card, from Citibank, and it gave me a lot of grief. I cut up the card in half with a lot of glee last year. Never getting a credit card from the Philippines again, even when I return to live there.

  2. I completely agree with your sentiments Marketman. Aside from the sky-high interest rates, most credit card companies charge interest on your total balance, including new purchases, when you do not pay the full balance due from your previous billing cycle. So in effect, one is already paying interest on items bought only recently and had every intention of paying in full upon due date.

    My wallet has been stolen a number of times the past 2 years and I’ve had to replace my credit cards each time. They usually charge P400 for a replacement card. Does the plastic and magnetic strip really cost that much?! More annoying is the fact when I had a BPI Edge mini and a regular-sized BPI Edge card for the same account and I was charged P400 to replace each of them! On one occasion, my card was fraudulently charged by an internet music website. Upon disputing the charges with HSBC, I was told my card had to be cancelled and replaced because the card details had been compromised and I would need to foot the P400 replacement fee!

    Another policy that irks me is that when I receive refunds for purchases I made online usually in foreign currencies. I may be refunded for the full amount in foreign currency but they currency conversion changes every single day. As a result, I may actually LOSE money if the currency exchange dips on the day the refund is performed!

    Their policies are simply outrageous!

  3. MM, Here’s one-way you could be scammed of your credit card information and having a Philippine credit card would be the worst nightmare, if it happened to you.

    This is kinda scary if only because of how simple it is.

    You arrive at your hotel and check in at the front desk. When checking in, you give the front desk your credit card (for all the charges for your room). You get to your room and settle in.

    Someone calls the front desk and asked for (example) Room 620 (which happens to be your room). Your phone rings in your room. You answer and the person on the other end says the following, “This is the front desk. When checking in, we came cross a problem with your charge card information. Please re-read me your credit card number and verify the last 3 digits numbers at the reverse side of your charge card.”

    Not thinking anything you might give this person your information, since the call seems to come from the front desk.

    But actually, it is a scam of someone calling from outside the hotel/front desk. They ask for a random room number. Then, ask you for credit card information and address information. Sounding so professional that you do think you are talking to the front desk.

    If you ever encounter this problem on your vacation/business trip, tell the caller that you will be down at the front desk to clear up any problems… Then, go to the front desk and ask if there was a problem. If there was none, inform the manager of the hotel that someone called to scam you of your credit card information acting like a front desk employee.

    This was sent by someone who has been duped……. and is still clearing up the mess….hopefully not a Philippine credit card.

  4. Just asking is Debit Card used in the Phils., because from personal experience it is much safer to use Debit Card than Credit Card, security and money wise. Thanks

  5. GJO: For debit card anywhere, don’t you run the risk of having your bank account emptied? Granted the card was issued outside the Philippines and is covered by insurance for fraudulent use, it will still be a big nightmare! I leave my debit card at home and take it with me only when I feel I absolutely have to. I know it is an inconvenience especially for large purchases and carrying large amounts of cash is likewise not safe. I also do not sign my credit cards. At the back where it asks for your signature I write “Ask for ID” though I notice in many establishments they don’t even follow that.

    Maybe this credit card problem will force us to consume less.

  6. Oh, thanks for the tips MM. Now I am rethinking about applying for a credit card in the Philippines…mainly for buying plane tickets online as airline carriers do not take credit cards issued out of Pinas. Glad my sister allows me to use her credit card and promptly checks her charges.

  7. I carry my credit card everywhere I go without giving any thought to any of these dire scenarios mentioned here. Thanks to this wake-up call, MM, I just had my credit limit reduced a few minutes ago.

  8. Thank you for the warning. That’s scary. Philippine laws I heard and I see it now in your case, always protects the businessman rather than the consumer. Kawawa naman si Juan de la Cruz, who’s looking after him?

  9. Thanks for this article, MM. And I thought US card companies are outrageous. I wonder what happens if the cardholder was killed during a robbery and the robbers use his/her card after the incident? Will the deceased still be responsible? ;) Are credit reports/scores used in PI?

  10. MM, you forgot to add the harassment creditcard holders receive when they are a wee bit late in paying their dues.

    and to add some grief about the late payment charges…one time my dad’s Citibank card had a P5.00 (five pesos!) charge which I think was some kind of admin fee or roll-over charge from the previous month, and he laughed it off and didn’t bother paying…lo and behold the following bill it had ballooned to more than P500!!! due to the late payment charge and interest rate…good thing he called up the call centre and had it dropped

    I currently have just one Philippine credit card with BDO..I didn’t apply for it, they automatically sent me one…with a fairly manageable credit limit … I think that’s their new thing since other people I know who have BDO accounts of upwards 5000PHP deposits got one

  11. Mr MM thank you for this article. I was about to apply for a credit card with HSBC in Manila for use during our stay in the Philippines to furnish a place that we bought in Ayala for convenience.

  12. For years I considered having a credit card as some sort of status symbol, something to aspire to. When I finally got mine, it was bliss the first few months and then the stark reality sank in.

    Exorbitant interest rates, trigger-quick late fees and finance charges, plus the added bonus of harassment the moment you skip a payment.

    Did you know that, should you miss a payment, C*t*b*nk’s agents will call you as much as 20 times a day to ‘remind’ you and practically force a payment deadline out of you? I’ve gone through this experience several times as, in trying to manage finances I’ve had to skip a few payments (although when I do pay I pay a huge sum to decimate my balance).

    These lovely call center agents, in repeatedly calling me no matter how inconvenient it may be for me (I’m in transit, a meeting, or up to my neck in work), have given the excuse that these calls are automated by a machine and thus cannot be stopped/controlled despite the fact that I have committed to a payment deadline.

    They themselves have admitted how useless it is to talk to/negotiate with them since the automated machines will be calling again a few minutes later.

    Another consumer-hostile tactic is their refusal to alter cut-off/due dates that will be more convenient to the consumer, but in effect can deprive them of late charges.

    I am so angry that we are not being protected from these sharks who do everything in their power to persuade us to avail of their offers and then milk us at their own convenience.

    I am so frustrated that our laws are useless, our legislators even more so when it comes to this matter.

  13. i followed MM’s advice during one of his previous post on credit card usage way back then. i noticed at that time that citibank had indeed doubled up my credit card limit without asking me. so i called up their helpdesk and asked that they return my original credit card limit. the one taking the call seemed so surprised to receive what he calls a very unusual request. told him that in case of credit card loss, then the increased limit will be a big headache to me.

    i never thought of the automatic increase in limit if you are a good payee as a potential source of problem until MM pointed it out. thanks to MM, i am now a more enlightened user, i hope others follow and check their limit. call your helpdesk if you have such a big limit and don’t really use it.

  14. Suddenly I’m paranoid about carrying my credit cards around and to think I hardly use them. The credit card law of this country is crazy! It’s got to be changed!

  15. Thank you so much for this article. I had been toying with the idea of getting a credit card for the past half year, and only the hassle of applying and paying fees was stopping me. I was aware that losing your card is one large headache, but I never imagined how very terrifying this actually is. International media (i.e. TV shows, etc.) teaches us that credit card companies help you when you do lose your card, but I didn’t think Philippine c.c. companies would be that much different. Thank you so much for letting us know!

  16. I have just one card that i have been keeping for emergency use. I think I’d rather have an debit card / ATM on hand than a CC. I’m sharing this with my friends. Thanks MM!

  17. Hi MM,

    I would have wanted my first post to be on food, which I am passionate about, but allow me to provide some thoughts that may be helpful:

    1. While there is currently no usury because there is no ceiling in interest rates, the Supreme Court has struck down interest rates which are unconscionable (i.e. “shocking” to the senses). In fact, just last September or October, I think, in a case called BPI v. Makalinao, the Supreme Court knocked down the credit card interest rate (3.5% per month) and penalty (something like 6% per month) for being unconscionable and ruled that the consumer can only be held liable for 1% per month as interest and 1% per month as penalty, or a total of 24% per annum. Note, this is not compounded.

    2. I am not aware of any legislation that provides for consumer liability in the event the card is stolen or lost and used before the consumer is able to report the theft or loss to the credit card company. As far as I know, this is only a stipulation found in the very fine print in the contract with the credit card company.

    I also do not know of any legislation in which the consumer is held liable if the credit card is fraudulently copied and used.

    But if you or any reader out there is aware of such a law, please let us know.

    In any event, assuming there is no law, the credit card company cannot hold you liable if the credit slip is signed and the signature does not match yours, even if you had not reported the loss yet to the credit card company. It might be different though if the one who used it is an excellent forger. If the credit card was used for an online purchase, or one where no signature is procured, then this can still be contested. If the delivery of the item is made to your address, then you could be held liable. Otherwise, the credit card company will have to investigate the delivery address to see if perhaps you know the person thereat.

    I recall speaking to an investigator about 8 or 9 years ago, as he was in a restaurant investigating instances of copying of credit card data. In his investigation, he noted that the victims had all used their credit card at the restaurant prior to the alleged fraudulent activity. I asked him about liability of the consumer. He said that normally, this can’t be charged to the consumer unless his signature appears on the credit slip.

    3. The problem with the banks and credit card companies is that even if they know a stipulation in the contract is void or can’t be enforced in court, they do not remove it. I guess they look at it as some sort of deterrent for consumers not paying on time or not reporting a loss immediately, or perhaps to implore the consumer to take better care of their cards.

    The hard part is that you would still have to go through the hassle of fighting them, and while doing that, your balance continues to increase due to the interest and penalties. While you can fight this, you still would have to go through a court process (assuming the bank stops sending ridiculous demand letters through collection agencies and actually sues you) and hire a lawyer and incur all sorts of costs. I can feel your aggravation.

    And I totally agree with your tips.

  18. Very well said, MM. There are also cases that credit card companies renew your subscription/account without first asking the cardholder. So automatically, may renewal fee ka nang babayaran.

  19. My husband has credit cards from two different banks. One card has twice been fraudulently used, once for a A$8000 furniture purchased in Europe and then a A$54 airline ticket purchased in the US. This card has always given him problems despite the high cost of membership and security features supposedly included in the membership. His new card from this bank has a security chip.

    With his other card, if an attempt is made to use it illegally (one big purchase, or several smaller purchases within the same time frame, or purchasing outside Australia), the bank immediately rings him on his mobile and asks him if he is in that particular country and if he is using it at the moment. If he answers in the negative, the bank immediately cancels the card and sends him a new one within a week or so. One time, his bank rang him that someone is attempting to use his card at an on-line music store for a A$1 purchase. When he verified that he was not using the card at the moment, the bank refused the transaction and canceled his card. The bank said the small purchase seemed to be a practice run for a bigger one. This bank also has a high membership fee that includes security features.

    In both cases, all replacement cards were for free (probably part of membership fee already).

    My husband says that if another illegal transaction is done on the first credit card, he will just give it up. Yeah right.

    What lessons did I learn from my husbands credit card woes? I practice credit card “hygiene”. I only use the credit cards to purchase from the same shops (and never from the European home furnishing store ever, I use cash there); I never let any salesperson, wait staff, cashier, etc. to handle my credit cards, I swipe it myself, even in posh places I do this; I always keep it in my person and never leave it unattended. If I’m not using it, l leave it home. Yes, you can leave home without it.

  20. Tip… instead of the authorized signiture written at the back of the credit card i also write in there “I.D w/ Photo required”. i use this to protect me from unauthorize payment if in case my Credit card gets stolen.

  21. Thanks for the head’s up MM. These companies really are a pain in the @ss!

    Also, some banks just give you a credit card (automatically) because you have an account with them. Another thing is that if they see in their files that you are married, they send your significant other with a supplementary card without even asking you! And with H_BC, they send me additional cards and even if I haven’t activated them or used them I get charged for annual fees!

    The interest rates are ridiculous, really! Sometimes it happens that you forget to remit your payment just 1 day off the due date and their agents start calling you! Minsan ka lang makalimot tapos mababastos ka na nila and I’ve had these cards with me for years!

    I do hope that we have legislation to protect us consumers from this veiled profiteering of these companies.

  22. This post was really helpful… I myself have a bad experience with credit card companies, although it was also my fault.

    Unionbank gave me a credit card which doubles as our school alumni card. Since I already have a credit card under HSBC, I did not activate my card upon receiving it.

    After a month, I received a billing statement for the annual fee, to which I was surprised because I never activated my card. My mistake was I was not able to tell the credit card company, so they charged me with a huge interest on my bill for doing absolutely nothing :P

    It was a good thing that the fee will be waived after I have raised it to the Credit Card company. They’ll just do anything to get money out of you.

  23. Thank you for this post MM. Will be forwarding the link to my friends who own multiple credit cards. =)

    If I may add on your tips listed above: If you use your credit card for installment purchases and regular purchases like grocery items, make sure you pay the total amount due on the bill and not just the minimum amount due. Let’s say you have installment purchase of P50,000 with monthly of P2,000 and total grocery purchase of P6000. Your bill arrives with minimum of P6000(just an example). YOU NEED TO PAY P8000 INSTEAD OF ONLY THE MINIMUM AMOUNT DUE. Otherwise you pay for finance charges on the total amount of your Installment purchase plus the remaining amount on the regular purchase.

    My husband had this bad experience from one credit card company who insisted we pay the finance charges on the installment amounts which are not yet due. After paying for the full amount, I immediately canceled that credit card.

    I myself have one but I only use it when I plan on purchasing items which costs more that P5000. I don’t like carrying my ATM card around since there are also those “persons” who lurk around ATM machine waiting to swoop your just withdrawn cash. I also make sure I pay my purchases on time and pay for the full amount on the bill not just the minimum amount due.

  24. Talaga!
    The rates are usurious! And even if you pay a portion of your outstanding balance, they still charge the interest against even the portion you paid. That is why I try as much as possible to pay the whole amount .
    It’s alarming ha, yes We better do something about carrying cards with the present credit limits. It’s just like carrying cash that can be stolen and used right away.
    Credit card companies have been issuing cards so liberally for a long time. So many people ill-prepared to take on the responsibility of credit have fallen for this. Who knows how many thousands of Filipinos have fallen into this debt hole, with responsible card-holders effectively footing the bill.

  25. I once charged to my Citibank credit card an installament purchase. Since they were charging me for the annual fee after a couple of months and would not waive it, I told them I will pay the balance in full then have the card canceled. After doing so and informing the bank that balance has been paid for (about 4 months of installments left), lo and behold, I’m informed by the CSR that I had to pay additional PhP500 since I paid in advance to the installment terms! Imagine that! Of course I did not pay the extra charges! What can I say? They really are idiots!

  26. Artisan Chocolatier, the one you mentioned exactly happened to me at the ShangriLa Makati but fortunately for me, the call was made at 2AM when I was asleep so I told the woman who is supposed to be calling from the front desk to go fu… herself and I’ll see her after I wake up (magbiro ka daw sa lasing, wag lang sa isang ginising, or something.) The following morning after breakfast (yumm, they have by the way one of the most sumptuous breakfast in town) I went to see the front desk why I have to be awaken at 2 AM just to get my credit card information. The short story is that they did not call but I protested where did the caller got my room number and yes she even called me with my name, how can they get those information. They promise to investigate but they even did not get back to me if my concerns were resolved….. and yes MM I don’t have a local credit card.

  27. thanks for the useful tips! i also requested that my credit limit not be increased and as much as possible only use my credit card to pay for online purchases, mostly for plane tickets. i’ve heard many horror stories from friends using too many credit cards and afterwards being unable to pay.

  28. I’ve found BPI is more diligent than Citibank in preventing fraud. Whenever we charge an unusually large amount (the 3x it happened to us, it was in excess of 50K) they conduct a verification process with a phone banker at the point of purchase/ store, and then a couple of hours later, in the evening, they would call the residential number to verify again. No such service with Citibank.

  29. Interesting topic. I still can’t get over how outrageous those practices are! Having left the Philippines before I had a job, I have never had a Philippine credit card. Anyway, I notice in your pic that the card at the top of the heap is Amex. How very apropos. I use Amex for 95% of my charge transactions. I have a MasterCard and Visa only for those times where the business doesn’t take Amex. It’s much easier dealing with them… customer service is better, and fraudulent charges are reversed immediately, pending investigation. Using Amex keeps my disciplined because I have to pay for almost everything in full at the end of the month. Plus, the year-end summary is a god-send and the perks are top-notch. :)

  30. Not to be preaching, in Judaism it is discouraged to be involve in usury, whether you’re the one charging or paying the interest (it is also in the Christian/Catholic Bible). It is a sin equal to having a sexual affair with your mother.

  31. UAE applies the same policies as US’ if a credit card is stolen. They are vigilant in effecting credit backs immediately when there are unauthorized transactions. In the Philippines, there’s too much paperwork to do and strong patience is required in following up.

  32. I have local cards as it seems more and more places take credit cards issued in the Philippines only. One this I do notice is stores here really seem to be on top of it in terms of checking signatures and/or asking for an ID. I have used my partner’s US credit card a million times in the US and have NEVER been turned down, including a my last trip when I went to the US and bought a $800 laptop. They asked for my ID, I gave it to the cashier. He looked at my ID, looked at the card, saw it was two different names and then completed the sale. (I guess he assumed that if I was a criminal, I would not have given a valid ID). That would never happen in the Philippines in a million years. While I understand that it appears way too easy to get screwed here if there are fraudulent charges, at least those charges may be harder to make.

  33. hi marketman! what a coincidence. my husban’s wallet was stolen a few weeks ago and we had no idea someone had stolen it bec we were home.the wallet was stolen inside our house.. we only found out it was missing when we received a call from the credit card company that someone made a purchase at a computer store worth 22k! we received a letter today that my husband is held liable for the purchase because it was reported lost after the transaction was made! HOW UNFAIR IS THAT!

  34. I too am in a huff now regarding a double charge made to my PruVisa credit card. Last Christmas I made a perfume purchase at Rustans Makati. I was told by the male salesperson to take a seat while he swiped my card. I normally don’t allow this but being tired from all the xmas shopping I allowed the guy to do so. When my statement arrived in January 2010, I found out that I was being charged twice for the 1(one) bottle of perfume I got. I have since complained by phone and email several times to the card company and sent them copies of my receipts of the purchase but to no avail. They said they will still have to verify this with Rustans. I just got my card statement again yesterday and the erroneous charges are still there! iT’S BEEN 3 MONTHS and the interest is adding up!I am now wondering if the salesperson or cashier (I have the cashier’s name on the receipt) maliciously swiped my card twice or does PrudentialifeVisa think I will just give in a pay. NO!I am a good credit card user. II pay in full when due and hardly every use it for purchases made in installment because I don’t like to have debts.

  35. Thanks everyone for those insightful, helpful, shocking, amazing comments. Yan and Miguel, particular thanks for those links and thoughts. I am glad to hear that it appears to be simply credit card companies applying onerous conditions, and that with legal challenges, they may lose ground. But it is up to government to help make broader more equitable laws that protect consumers and I hope that happens in future. The most recent ridiculous rule is one that reads the cardholder is completely responsible for keeping track of staying below limits or else… how dumb is that? If I go over my limit, I expect the company to deny my charge or call me, why should I be tracking every charge when I pay them for the card to begin with. Absurd.

    Fried Neurons, I am amazed you could make out an Amex card from that small of a snippet of it. And yes, it has been my favorite card for the past 20 years and I am VERY loyal to it in many ways. We even had one of those television ad type moments with the card. Mrs. MM and I were in Rome, a family member was taken critically ill back home, and with an hour’s notice, in the middle of the night, Amex concierge arranged to get us the next available flights home, cancelled all of our original flights and hotels, and made sure we were back in Manila ASAP! We just took a cab to the airport and someone met us with all the travel arrangements. For that instance alone, I am most grateful to AMEX and have given them lots of business since… :)

    Note to all, I am traveling this week to a local favorite destination and will have little or no wifi so I apologize in advance for erratic posts…

  36. eheheh ..i have not used credit cards since 2001!..thank god.! i only use debit cards.. still ok to use internationally.

  37. i was notified by my bank of some unusual activity and come to find out that someone actually was able to get my credit card numbers (the card was NOT stolen!!) from the slips or when it was used for one online purchase. in fact the bank was able to trace that one of them was actually used a “card!” the thieves made one up using my numbers. for those of you that do online purchases, talk to your bank and ask them to issue you one card that you can put only so much money for that particular purchase, or use one that generates a random card number for a specific purchase. that way that number is good for one time use only. another option is NOT to sign your card and write on the signature line, PLEASE VERIFY IDENTIFICATION. that way vendor should double check ID and card holder are one and the same person. talking from experience….

  38. Here’s my issue with credit card companies —

    A few months ago, I went to pay for my husband’s credit card bill on the due date (December 15) at a bill payment center. When we got next month’s bill, I was surprised to see that they we received penalties for paying late.

    We called the customer service of said credit card company and were informed that the charges were valid and we should’ve paid 3 days before.

    I even faxed them the receipt we got with the date and time stamped.

    The customer service gave us a lot of grief about this but eventually reversed the charges.

    I had a simple argument for the whole thing (maybe it’s too simple — I don’t know) — if I paid on the 10th, I would’ve paid early. Had I paid on the 16th, I would’ve paid late. I paid on the 15th exactly — didn’t that consitute paying “on time”?

    – tin, iloilo city

  39. please please please be careful with your credit card information especially online.

    i was once unfortunately involved with a man who was a “carder”. ‘

    he steals peoples credit card information online and sells the card numbers to other “carders” as well for as low as USD5.they would then buy items online using your credit card and sell it on ebay to other people at a cheaper price. they buy laptops ipods and gift cards and the like. then the profit they get in cash in hand, basically cash from your credit card.

    please be very careful.

    if you notice any charges on your card that you did not make please report it straightaway and try to find out the delivery address where the goods were delivered. if you can trace this you can trace the “carders” receiver of the items bought using your credit card. they never have it delivered to their own address. the “receiver ” may be unaware that they are receiving stolen merchandise so they may not be the ones to blame, but they would definitely know who is picking up the items from them. this might help you catch them. they would normally have this delivered in an obscure part of any neighborhood in manila and pick it up from there.

  40. My daughter here in Australia has her ninong in Manila who wanted to buy her a present recently. He tried via the internet several companies here in Australia to supply the gift but no one would honor any of his credit cards because they were issued in the Philippines. So despite the high fees and interest rates, Filipino credit cards have limited validity. I had to buy the present for my daughter on his behalf.

  41. Great timing on this post MM…two of our cards were just given an increase in credit limit and you are right, the risk is also higher in case of loss or fraud. I have recently filed a dispute claim against Citibank with a fraudulent transaction (from Mexico!) and I am grateful that the bank noticed this out-of-the-ordinary transaction and notified me before I was billed. I also hope lawmakers will do something with those interest rates!

  42. What if…

    Everybody maxed out their credit cards on say, tomorrow, and refuse to pay.

    What would happen? Would the card companies cry? Would they even have enough cash to go after everybody and collect? They are liable to pay their merchants right?

  43. For those of you who are purchasing items online and would not like to use credit/debit cards, try Paypal, almost all online stores now accept Paypal. Your Paypal account and not your card will be used as a mode of payment. The way it works, you sign-up on Paypal, register your debit/credit card and start shopping, once you make your purchase you will use Paypal as your mode of payment, thereby hiding your card number and ccv number from the online store. I’ve always used paypal on all my online purchases, never had a problem and when i have issues with the item, disputes are handled and guaranteed by Paypal.

  44. Yes, definitely. It just seems that I’d rather not do business with anyone who benefits if I screw up. It is a predatory relationship.

  45. You know, I am not trying to protect the credit card companies but we also have to be responsible for our credit cards, whether foreign or local. We should protect ourselves by making sure we have the credit card information in a safe place so that once it gets lost, we can retrieve that information to inform the credit card companies. We should also be mindful of our wallets. We should also not just give out credit card information over the phone, especially the last three digits that serves as the security feature. We should pay our bills in full once the credit card bill is received. The credit card is FOR CONVENIENCE. It is not meant to be used as a revolving credit. That should be the attitude one must take. My problem is most pinoys always wants somebody else to be responsible for their irresponsibility.

  46. In my experience amongst the local cards, BPI is the best. I can stretch my grace period beyond the due date until before they print the new billing statement and I don’t get penalty nor finance charges. :-)

  47. Yes, I definitely agree with your articles buddy this is base on my wife experience and I hate credit card actually.

  48. After reading your older posts about increased credit card limits, i had my ccard company reduce my P120,000 limit to just P 50,000…i would have wanted to forego all ccards completely but since i travel i cannot make any flight and hotel bookings without my credit card..

    i used to have a citibank.. i wanted to cancel my card already and they advised me to avail of their amnesty program that will provide fixed payment for 2 years…
    it was hassle free

    the collection agents/customer reps at AIG were disgustingly rude… i received a call on my direct line asking for me , my name is quite common so i clarified the full name of the person she was looking for…turns out it wasnt me but an officemate from another dept holding office 3 floors up from mine,…when i calmly told her that she got the wrong person she shouted expletives at me! as in ‘PI…tantantanan mo ako ng taktika mo …G*ga kala mo matataguan mo ako, wag ka na mag panggap balahura ka magbayad ka ng utang mo PI!”

    i was very traumatized because i had good credit standing with them and i wasnt even the person they were looking for…

    after paying my citibank i decided to call AIG to have my card canceled… i asked if some of the interest charges be waived since ive been a loyal and good customer…they said no..i then asked if they have an amnesty program similar to Citibank…guess what the rude customer service replied ” Wag nyo kami igaya dun…Citibank yun, AIG kami!

    i called again and talked to another customer rep who kept asking me why i wanted to cancel my card, i said im just streamlining my expenses and it would be easier to manage just 1 card… he said that i would have to obtain approval for their management if they will allow me to cancel!! what the F! i was willing to pay them and i had to obtain approval??!!…

    so i asked what would be the reason they will allow me to cancel my card, he said they only allow cancellation for deliquent payments but since my payments were uptodate, i was not qualified…what kind of twisted logic is that!

    you know what i did?? i deliberately missed my payments…. after a few months they were the ones calling me to settle … they gave me discounted interest charges but i still felt it was too high…after a few more months they called me up again to offer full waiver of ALL charges and HALF the Principal amount…i paid immediately after that and never contacted them again… GOOD RIDDANCE

  49. Thanks for your tips MM…I will forward this to my relatives in Phils…the CC company here, they send us SMS everytime we purchase using our CC that is from RMB100 above. One time, I bought earrings for my mom, the cashier had just finished swiping my card, when I received a call from the bank! I was so surprised but glad to receive that call. I hope we will have this kind of service in Phils. Also, I don’t need to pay yearly fees for using my CC, as long as I use my cards at least 6x in a year, the yearly payment is waived. My CCs will expire this month, have received the replacement already, your post makes me think twice of activating it…=P The bad side is, ang hirap makakuha ng credit points para ma-redeem ko mga gifts…the value of the gift is so cheap, unlike there in Phils…but that’s another story…

  50. MM said…
    “Note to all, I am traveling this week to a local favorite destination and will have little or no wifi so I apologize in advance for erratic posts…”

    Ok, Marketmanila readers. Why don’t we all try to guess where Marketman and company are?

    My guess, Palawan

  51. This post made me reduce my 2 cards’ credit limits as well to just 50k, just a quarter of my previous limits. At first, Citibank would not allow me to reduce my limit for a senseless reason of having their card for less than 10 months. I asked the call center agent the logic behind that policy and she could not give any, so she told me that she will forward my request to other channels instead. Later, I was informed that if ever I want to increase my credit limit again, it will only be possible after 6 months, which I don’t think I will do anyway. With Amex, I could just call them to increase or reduce my credit limit again anytime, and they haven’t charged me with annual fee for 10 years now.

  52. where is it over there that is nice to go to sa Semana Santa? Somewhere isolated in Cebu? or Negros?

  53. I had an overdue of php2000, and the next month BPI gave me a finance charge of almost php2000!

    I incurred a huge bill on a business trip, which I paid almost in full– except for a Php2000 balance–before the deadline. Imagine my shock when the finance charge the following month was almost 100% of the balance! I’m based abroad so had to call IDD to complain, as well as email 2 complaint letters. So much hassle.

    Apparently the rule is, once you get overdue, they base the charges on the whole bill, not just the balance. The charges are computed per day, starting from your statement date, NOT from the payment deadline. I complained that it’s ridiculous and morally wrong, because that amount was paid on time! Only 2000pesos went overdue so the computation should be based on that, and should start after the payment deadline.

    After complaining several times, BPI retracted the finance charge. Thank God for that, but still super hassle.

  54. Amazing where one finds internet cafes these days. The wifi in our hotel doesn’t work with my Mac so I am grabbing 15 minutes at a cafe to let you all know I will be back in less than 24 hours…with lots of seafood posts to boot! Keep yourselves amused with the archives! Thanks. :)

  55. Hi MarketMan! I recently had this problem and have frequently lambasted on my website one credit card company in particular (but I think they are all the same). If they can charge you those interests rates and you will not blink twice, God’s mercy be with you. I wrote about it in one of my posts:

    The usurious credit card charges were thankfully reversed, not after I almost suffered an aneurism, though. And please let me not get started about timeshare companies – mine just started penalizing us with a 2% interest per month that the balance (of the home maintenance charges) remain unpaid. All creditors are getting on the bandwagon and woe to us consumers. The trick, I think, is to raise hell. Most of the time, they relent. But I agree with you – it does not have to come to that. The laws should protect us. Yeah, hopefully the next administration…

  56. Yes, maybe he went to Amanpulo. But an internet cafe nearby? I don’t think so anymore.
    Hmmm, looking forward to your seafood posts, MM!

  57. Looking forward to your blog re your (and now mine also) fav destination, MM. That cafe, was that the one next to CVL or the one next to SeaDive?

  58. This is a great read. I only have one Philippine CC and another in the US. They are just BAD for you if you know what I mean. We don’t want to be a mini-version of the US during the subprime crisis, and anyway, Filipinos were raised on the values of saving up before buying, so I hope they stay that way. DOn’t spend what you dont have!

  59. how do we get legislation protecting consumers going? i never really understood interest rates and such, but now that Marketman’s explained what how much you’re actually paying on a 3.5% interest rate i do agree it’s usurious! know of any lawmaker/candidate championing legislation governing credit cards, for the consumer’s benefit? he’d get my vote!!
    ps. someone i know overpaid their card company but the bank has cut off their credit – writing them hasn’t helped recover the money, and the bank (actually banks, 2 different banks!) is still sending statements each month indicating the credit! any advice on recovering the money?

  60. Artisan, thanks for the links. On zero liability cards, note these are U.S. institutions, banks such as HSBC noted on that list, are NOT zero liability in the Philippines. Unfortunately, most Philippine cards put the entire liability of purchases on a stolen card back on the consumer… Have to get momentum and start writing some new posts… :)

  61. I lost my credit cards (4- mb gold, mb dollar, scb, hsbc) last oct 2009 (am) in makati (going to work) and the thieves used it in sm bicutan (pm) – department store, hypermarket, astrovision, surplus shop, photoline, etc. I only knew when I was about to pay for my parking. Within 1 hour, they consumed almost P 200,000.00. I was able to block it after they used it. The following day I went to the police station in makati to make a police report. A friend told me that mb would call her up everything she uses her card just to verify if she was the one who used it. I was wondering why they did not call me up where in fact the thieves where buying gadgets/jewelries amounting to 17,000+, 30,000+, etc. A supervision from the department store told me that the thieves presented a company ID and TIN with my name on it and her picture. These are not valid pictures because in the first place we don’t put a picture on our TIN ID. The cashier is not trained enough to check if the signature is the same or not. She claimed that they verified it with the bank and the bank approved the transactions. I was able to talk to the security head of department store and he said that they don’t have cctv cameras in the department store, is it true (?). Other stores don’t have a camera while another store has a camera but it’s not functioning (only as a props). Meanwhile, the customer service of hypermarket is not cooperative. I have a cousin who works in a credit card company and he said that everytime you use your credit card, they could see transactions made because they appear on their monitor. These banks dont’s care about their clients, they just want to earn money. Now, a lawfirm is now harassing me saying that they will sue me if i don’t pay within a certain period of time. A lawyer friend, working in a credit card company, told me not to pay. They can sue me in court but they can not prove that I was not the one made these transactions and he said that they are all insured, is it true? They want you to pay just to save face, is it true? By the way, I have all the evidences that proves that I was not the one who made the transactions. Thank you.

  62. so now… which bank in the Philippines has the best credit card.. in terms of interest, protection for the user…credit limit…


  63. marisa, I have not reviewed all credit cards, nor would I want to. But what I can say is that one should use credit cards with great care in the Philippines, as the fine print and other conditions are ONEROUS for the consumer, in my opinion. If possible, keep your credit limits as low as possible. Pay your outstandings in full at the due date and don’t borrow on a credit card. And watch the fees and interest rates as you will be paying huge annual interest rates, period. If I take an even more conservative approach, I would say if you have to borrow money at credit card company rates, you shouldn’t buy the item or service to begin with as you probably can’t afford it… but that’s just my opinion.

  64. Good am, i came across your article when i am trying to search online on what should i do if a credit card company sent me a demand letter threatening me to take me to court on the card which i never received and used.

    Kindly please give me some tips on what should i do with it. I did asked my sister to call the cc company to ask when, who and where the cc was received. Your advise will be most appreciated.

  65. Totally agree with your post, MM. I’ve found that using a secured credit card in the Philippines works well for me. It suffices for making Internet purchases and for racking up points and freebies. By putting a low amount in the time deposit account which secures the card, I’m assured that there will never be an automatic increase in my credit limit, nor will the bank even attempt to offer me one. No telemarketers too!

  66. I agree, dapat talaga may gumawa ng batas laban sa sobrang singil ng bank sa credit card.

    kaya ako napadpad dito, kasi hinahanap ko yung computation ng hsbc.

    how come ang previous balance eh 9000 na lang kasi nagbayad ako ng 8000, sinisingil ako ng hsbc ng 1+++.++ pesos, tumawag ako para magtanong na paano nangyari na 1k plus yun samantalang 9k lang ang natira kung utang meron daw akong current balance pa na unbilled.

    Di na ako nakipagtalo kasi, wala rin point na magalit ako kasi yun ang patakaran nila.

    The Filipino people need a strong law to protect us.

    Sana makarating ito sa ating bagong senador.

    to admin, sana may link itong post to share in facebook

  67. I need my high credit limit but I am also aware of the risks of carrying one with more than PhP300,000 credit limit. I solved this problem by issuing myself a supplementary card (the name on the card is a shortened version of my first name) and assigned a PhP10,000 credit limit on it. Then the issue of Annual Fee comes in, well, I never paid the Annual Fee in my entire life. I just tell them to cancel the credit card every year and it works like a charm, most of the time they credit card company reverses the Annual Fee right away. My Citibank Platinum charges PhP5000 for the Annual Fee, the minute I call, they reverse it–same with all my other credit cards and the supplementary cards. Note that I really do cancel my cards when they don’t reverse the annual fee, the funny thing is, after they cancel it, they send a new one a few weeks later with the waived first year annual fee.

  68. I beg to disagree..a good cardholder knows how to use his/her card properly, i.e. paying on time, keeping it securely…one should know that if he/she used it, therefore he/she should expect he has debt to pay..others say “i haven’t receive my bill so how can i pay?” – this shouldn’t be the mentality of a cardholder..there’s a lot of options to know your outstanding card issuers are now giving online statement for their card holders..or you can call their hotlines, mostly tollfree and just be patient…

    1. you can waive your annual fee if you properly use your card (paying the full amount on or before due date or overpayment)
    2. getting a lot of cards is not good…1 to 2 cards is enough..
    3. the credit limit set by the issuer depends on your ability to pay (if your just a plain office clerk whose salary ranges from 10k to 30k, a CL of 40k will do and its for your safety..
    4. keep your transaction receipts, this will help you in reconciliation with your SOA
    5. always put in mind your cutoff date and the payment due date
    6. pay the full amount always..interest charges are computed based on previous balance not on outstanding balance
    7. if you can’t receive your SOA, try enrolling your card with the issuer’s online statement or change your billing address into your office or to the card issuer’s address (you can ask if you can pick it up there)
    8. read the terms and conditions of the card issuer before applying for 1..

    That’s all i can share coz i work in a bank..:)

  69. slimjoe-bit.

    And I beg to disagree with several of your points of view.

    Much of this is an issue of risk. And while I agree cardholders need to carry cards with care, they should NOT be liable if the card has been stolen and used by thieves. In most other developed and western countries, a maximum of $50 in liability is charged to the client; in the Philippines it is the full amount. Even if fraudulently spent. So the complete risk of checking the signature, identity of the buyers, etc. DOES NOT fall on the merchant and the the total loss is the clients loss.

    Card numbers are irrelevant, it is the total credit limits that matter.

    Credit limits are based on ability to pay, but if you are worth PHP5 million in assets, frankly, the credit card companies provide huge limits based on your deposits/assets known to them, so it is NOT driven by salaries alone.

    Banks make billions on their credit card businesses because they charge near usurious rates. And they have the highest loss or fraud rates here compared to many other nations.

    So I stick by the post. Philippine credit cards are FAR RISKIER to carry than foreign cards. And worst of all, one of the most expensive cards to carry from a perspective of fees, monthly interest charges and penalties.

    But you SHOULD know that, since you claim to work for a bank.

  70. My first bad experience was when I used my Citibank to pay for my insurance billing (actually I have cash but I only swiped to get points) But I had previous purchases so I asked the Cashier at the insurance company to first inquire if I had enough credit limits (otherwise, I can still use other cards to gain reward points). The cashier told me that should I exceed my limit, it will be declined. So, the transaction was approved right away using my Citibank. When my bill came, it has an OVER THE LIMIT charge of P300. I called up the Citibank’s customer service operator and I was told that I did not have enough credit limits at the time I paid the insurance company, but they approved it so that I won’t be ’embarrassed’. I told the operator that I would rather be embarrassed than having to pay P300, besides, I have other credit cards should I be declined. I asked for a reversal of the charges, the operator refused and then I said I want to end my membership. The operator said “You still owe us, pay up first then have it cut.” It was quite insulting, so I did pay up then when I called the customer service again to have the card stopped, they offered to return my P300. I got really mad and said “that was what I wanted that in the first place, but because they gave me a hard time and I was insulted by the rude operator. My decision is final” The card was cut…After 3 months of calls from the Citibank asking me to return, they finally offered an additional 3,000 reward points plus the return of the P300 OVER THE LIMIT CHARGE.

    Bad Experience Part 2 :They won’t approve my boss’ Citibank Credit Card application (5 times) though they (Citibank telemarketers) have requested me to refer a friend. The reason? They were looking for an ACR (Alien Certificate of Registration) in which, is already ‘merged’ into my boss “Board of Investors Card”. Only foreigners who live or study in the Philippines have ACR. My boss is a foreigner/investor, doing business here… the Citibank employees should be updated on this… to think that my salaries came from my boss!

    Bad Experience Part 3 : I work as an office staff and our sales representatives usually request plane tickets for their provincial trips. I buy plane tickets online most of the time using my CITIBANK card..then for every plane ticket (on differnt days), I was issued a cheque payment from our company.. in Septmeber I had 4 online plane ticket transactions, by october, the bill arrived…I paid my bills right away using those checks (4 pcs). In October, I bought 3 more plane tickets, on different days.. the bill came also in October so I paid with the 3 cheques issued by our company. This December, I was surprised to see “Processing fee for October” of P120 in my bill. I called up the Citibank operator, then they said it was a valid charge and I can not reverse it… so they’re telling me not to be a prompt and responsible consumer??? For that small amount, I have finally decided to stop dealing with Citibank (after I pay up my 0% interest transactions… because pre-terminating the 0% transactions would mean another fee of P300…it’s totally a rip-off!!) I’m so disappointed!!

  71. Need help and advise. I applied for a loan facility recently and got advise that my application was declined since I was coming up with negative credit findings with a local bank. I phoned the bank and got confirmation that per their record, they issued a credit card to me in 2000. I never applied for or received any card from this bank. I am afraid that they issued the card to my name, and was received and activated by a fraudster. There were spending recorded on the account, and payments obviously not made. As such I am the one ending up with adverse credit finding. What can I do to get them to delete my name from their list, in the 1st place, the bank was the one who issued and activated card for fraudster.Pls help

  72. i have this issue with the pay easy program of hsbc. i was charged for the late fee just because theres a 15 pesos that was left unpaid in my account.i am not rcving any SOA frm them so i just assummed that i just need to settle the agreed monthly amt.i was advised that they cannot waive the charges unless i settle the amt first which i refused to do coz i knw that its not my fault. i am very upset at the moment and i am already thinking of not paying the bills unless they have it fixed.pls help :(

  73. Im facing a huge problem with my credit cards. My wallet was stolen and my cards was used up to its credit limit. My problem is the bank wants me to pay the unauthorized transaction. Although they admitted that this is a fraudulent case. Since they waive the transaction from my one credit card. And they want me to pay the charges from my other credit cards.
    They don’t want to compromise.

    If only there’a way all victims of this credit card would all join in together, maybe our government could do something about this to protect all the cardholders. Or maybe the media can help us disseminate these problems w ith credit card company.

    Do you know of someone who has experience the same as mine? Did they pay it?

    Thanks. I really don’t know what to do right now.

Comments are closed.