Are you qualified to own a credit card?

MANILA, Philippines – If you think it’s a wise choice for you to own a credit card, and you are willing to sign the dotted line after a few questions to yourself, the next thing to do is find out if you’re eligible to own one.

Here are the things you should be prepared for:

1. Credit history

If you have a low credit rating, balances in other credit cards, unpaid loans, or any kind of debt, you are less likely to qualify for a new credit card. It is important to pay all your debts first before applying for another credit card. It will save time on both ends – your time on applying and your bank’s time on processing your application. Make sure you prove to your bank that you have a good credit rating for a higher chance of approval.

2. Age

For sure, you can’t do anything about it, but age is essential if you want a credit card. Usually, banks grant a card within the age bracket of 21 to 65. They won’t give you a card if you’re 16, but you’re allowed to possess a supplementary card. Those who are 65 and above are often times subject to retirement so employment or regular income can no longer be verified.

3. Proof of stable Income

It’s not enough that you are decently endowed, or earning an income, your tenure is also important. Most banks prefer tenured applicants or those more than 6 months employed or regularized. These people have stable jobs and steady income. Documents such as Certificate of Employment, payslips stating your monthly salary, and income tax returns are required by most banks. If you’re not employed but own a business, documents such as Business Permit and Audited Financial Statement with BIR are important. Generally, anything that can prove that you are capable of credit card repayments are useful.

4. Proof of billing

You have to prove to the bank that you are a good payer by presenting documents such as utility bills. Bills under your name such as your phone, or electricity and water bills are needed. Previous credit card bills and proof of payment on your loans are preferred since these are similar to what you are applying for.

5. Residential status

If you own a house, you will be asked for the number of years you are living in the house. While if you’re still paying for it, you will need to indicate your monthly mortgage and the duration of your payment. Your monthly amortization and your monthly rent are vital points because the amount is surely deductible to your monthly income, which could possibly affect your payment behavior with your credit card.

6. Citizenship

If you’re a foreigner in the Philippines and you’re applying for a credit card, you will be asked for more documents than the usual. The length and purpose of your stay will also be taken into consideration.

In general, banks prefer people who are more likely able to pay back what they owe in their credit cards or any applicant that can prove they have the capacity to pay what they borrow using the credit card. Do you think you are eligible to own one? – Rappler.com

Image of woman holding credit card from Shutterstock

MoneyMax.ph is an online platform for comparing financial and telecom products and services. It aims to give the power of smart purchase decisions back to Filipino consumers by providing everything they need to become financially savvy.