A credit card, just like any other form of debt, has often been vilified as a money sucker. But used wisely and responsibly, it can prove highly beneficial, especially for fresh college graduates who are on their adulting journey.

Like it or not, credit cards are one of those things we can’t quite live without, especially in this era of the digital payment ecosystem. In fact, Filipinos today own an average of 2.3 credit cards, with 11.3 million cards-in-force as of end-2022, according to the Bangko Sentral ng Pilipinas (BSP).

While card issuers are prohibited by law to issue a credit card to applicants who cannot show proof of income from employment or business, fresh college graduates or those ages 18 years old and below can still have access to this financial tool by being a supplementary cardholder. 

A supplementary credit card is an add-on card tied to the existing account (principal or primary cardholder). This allows the supplementary cardholder to enjoy the same credit card benefits as their parents (who, as principal cardholders, would assign a credit limit) while still having full control of how much to spend.

Having a supplementary credit card as an initial step can benefit those who are about to enter the formal workforce, said Credit Card Association of the Philippines (CCAP) Executive Director Alex Ilagan. “It is important for young people to be equipped with the right tools in managing their adulting life by knowing how a credit card can work for their cash flows,” he said.

Here are some of the ways credit cards can help in the adulting journey:

Be aware that you are just sharing a sub-credit limit with your parents (as the principal cardholder) so use your card wisely, like when you go on your job-hunting interviews or employment preparations. After gaining work experience and a steady income, you may already apply to be a principal cardholder.

Issuers look at job income, which can be P21,000 and up depending on the issuer. Applicants may present their income tax return (ITR), certificate of employment (COE), or pay slip as proof of income. Note that issuers, too, conduct employment verification as one of their many credit checks.

3. Choose a credit card that fits your lifestyle and what you spend on

If you’re a frequent traveler, look for a credit card that offers points and miles you may redeem for travel bookings or purchases. If you’re a savvy shopper, choose one that offers shopping discounts, rewards, and cashbacks.

Check out the welcome bonus offered to new customers but be aware that there’s minimum spending required within a time period. Check this information to qualify for the sign-up bonus.

You need to build a good track record of payment, credit line utilization, and frequency of new credit applications, among others. So be conscious of your credit behavior. Track your billing cycles and due dates. Avoid accumulating interest charges and debt to maintain a good credit score. This also helps you track your spending and spot any budget guzzlers you can do without.

Subscribe to your credit card issuer’s website or social media pages to get wind of their latest exclusive updates and stay informed about rewards and benefits.

In credit card use, as in other areas of your finances, think of saving money first before spending it. This will put you on the path toward good credit as well as set you up for a strong financial future. For instance, consider the 50/30/20 rule when creating a budget: 50% of your income on necessities such as rent, 30% on recreation and splurges, and the remaining 20% toward savings and paying down debt.

CCAP conducts credit awareness programs targeted toward the needs of graduating college students. “Our aim is to educate them as early as possible so they know what credit is and how they can manage their credit cards well when they get theirs. 

Any organization, not just schools, can reach us for these enlightening seminars,” Mr. Ilagan said. CCAP has been actively conducting credit awareness programs in various colleges and universities since 2017. Those interested in these credit awareness programs may reach out to CCAP at https://www.ccap.net.ph/contact-us/.

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• Empowering women through credit cards