Secured Credit Cards

Credit Card - one of the most important weapons of a shoppingera, if and only if used WISELY. Everyone's familiar with credit cards, but not with SECURED credit cards.

What is a SECURED CREDIT CARD?
A secured credit card is similar to that of a regular credit card, the only difference from a regular one is that a secured credit card needs a hold-out deposit/money/collateral. You will be able to enjoy what regular credit card users get - installment schemes, discounts, reward points, etc.

Secured credit cards are perfect for:
- Those who don't have enough proof of income (new work, college students, etc.) but have enough money to deposit as a collateral.
- Those who have had bad credit history and want to re-establish a good credit score/history.
- Those who are repeatedly declined by credit card companies/banks.

How much is needed for the hold-out deposit? How much is the credit limit?
Credit card issuers/banks usually require a minimum of Php5,000 and up (banks differ with the minimum required deposit) and credit limit will be 50-90% of the hold-out deposit. You cannot withdraw the deposited money after a year or so from the date of application. Once you opt to withdraw the money within the holding period, you have to clear and settle your credit card transactions first, request the bank for cancellation of credit card and withdrawal of your hold-out deposit. This will take around 1-2 months to process.

Conversion of a secured credit card to a regular one is possible once you are already capable of showing enough proof of income or if you are paying your bills on-time and in full amount for at least 1 year. Once you had your credit card converted to a regular one already, you can now withdraw your hold-out deposit without cancelling your credit card. You can also use your secured credit card in applying for a regular credit card with other banks since there is a bigger chance that your application will be approved if you are an existing credit card holder with good credit standing.

As far as I know, these are the banks which offer a secured credit card program:
1. Bank of the Philippine Islands (Express Start Program)- Php10,000 minimum required deposit / 50-80% credit limit
2. Metrobank (Save and Swipe Program) - Php12,000 minimum required deposit / 80-90% credit limit
3. Union Bank - Php10,000 minimum required deposit / 80% credit limit
4. RCBC (Instacard) - Php5,000 minimum required deposit / 100% credit limit

How to apply for a secured credit card?
1. Just visit a branch of your bank of choice and bring with you the basic requirements when applying for a savings account, like valid IDs, ID pictures, etc., and of course, your money for the hold-out deposit.
2. Inform the staff that you are interested in applying for a secured credit card.
3. They will ask you to sign a lot of documents, like the credit card application form, deed of assignment (for the hold-out deposit).
4. Wait for 2-3 weeks (usually) for your card to be delivered to your mailing address.

Secured credit cards have normally 100% approval rate, but they are still conducting credit investigations, just for verification purposes, I think, so expect phone calls after submitting your application.

Hope this helps!

Should you have any verified and additional information regarding secured credit cards, please do not hesitate to share it so I can include it in this post :)