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Philippines: Credit card ownership pushed amid high inflation
MANILA, Philippines — Issuers are pushing credit card ownership, particularly among Filipino women, amid stubbornly high inflation and uncertainties.
According to the Credit Card Association of the Philippines (CCAP), the umbrella organization of the country’s 17 major issuers, credit cards serve as powerful tools of economic empowerment for women, as these increase their financial flexibility, opens them up for investment and financing opportunities, and improves overall quality of life,
“Credit cards are an effective way to advance financial inclusion and bring disadvantaged people into the financial system, including low-income and young women. They boost women’s spending power, which spurs consumer spending that the economy needs to recover from the aftershocks of the pandemic,” CCAP said.
According to the World Bank collection of development indicators compiled from officially recognized sources, only 8.1 percent of the country’s working population own a credit card as of end-2021.
“This indicator means thousands of women have yet to know how a credit line can empower them,” CCAP said.
CCAP executive director Alex Ilagan said one unique characteristic of credit cards is it acts as a standby line of credit, making basic necessities conveniently accessible.
“Consumers need not apply for a loan every time they want to avail of the credit facility, unlike in other types of consumer loans. And there is no limit to the number of times they can use the credit line as long as the total amount of the transactions is kept within the card’s credit limit and they are able to pay the amount due on time,” Ilagan said.
CCAP joins the celebration of the International Women’s Month this March.
“Regardless of what she wears–mother, wife, entrepreneur, employee–a woman carries many financial responsibilities. Having access to credit makes it easier for her to handle these obligations,” Ilagan added.
In addition to providing cardholders with a quick fund injection in case of emergencies, credit cards also enable women to manage their personal finances.
Card users have up to 51 days from the date of purchase to pay for credit and even at no cost if they pay the full credit amount before the cut-off date.
Aside from helping support daily needs, credit cards also make other forms of financing accessible to women. Those without a stable income can build their credit history to get loan approval.
According to Ilagan, credit card issuers also protect women needing funds from the informal lending sector, such as loan sharks that impose exorbitant interest rates, causing borrowers to fall into perpetual debt.
“Another unique advantage is you can use your credit card abroad to purchase goods and/or avail of services on credit. You don’t have to bother with the currency exchange because the billing will automatically be converted to Philippine pesos,” he said.
Source: https://www.philstar.com/business/2023/03/29/2255171/credit-card-ownership-pushed-amid-high-inflation