5.29.2019

Expats Need A Credit Card In The Philippines

Expats Need A Credit Card In The Philippines




You Simply Must Have A Credit Card In The Philippines


If you plan on moving permanently to the Philippines or any foreign country you might make the mistake that I did. I closed all credit card accounts, except for two. That is not necessarily the bad thing. The mistake I made was in eventually closing the other two a few years later. I reasoned that I could just use a local card from a Philippine bank. 

Then the time came that I began thinking about what I would need if I ever returned to the US. I might need a US credit card. There are a lot of sites reporting that not maintaining at least one credit account while you are overseas might hurt your credit. What I noticed is that my credit score was unaffected even after years with not a single active account. This might be due to several longstanding accounts that I had closed, but which remained on my credit reports. 

According to Equifax, accounts for which you have a good record will remain on your credit file for up to ten years after they have been closed. These positive marks on your record will continue to give you a bump long after they have been closed. However, when I did apply for a new us card the initial credit limit was only a small fraction of any card I had previously held. This may have been an issue if I had been in a hurry and needed a higher limit due to an upcoming return home.

If you are interested in a applying for a card in the Philippines there are three types of card to choose from: prepaid debit card, debit card attached to savings account and credit card. These are all discussed in this guide to Philippine debit and credit cards. 

Maintain A US Street Address 


Consider how your cards will be delivered to you overseas. Before I ever thought of the question, one of my card companies mailed a renewal card to me through regular mail. The card arrived with no problems, but for personal peace of mind this is not an option that I wanted to repeat. 

I now maintain a US address with a mail forwarding service. The card company mails the credit card to that address and the mail forwarding service sends the card to me via courier, such as FedEx or UPS. It costs about $100 to ship a card from the US to the Philippines via UPS, but it allows me to track the shipment and gives me greater peace of mind that the card will not be diverted AND the card arrives in about one week.

The mail forwarding service also comes in to play for the US bank account that you will want to keep open to pay your credit card bill. Due to Patriot Act requirements you may have a problem maintaining an account with some banks when they discover that you have a foreign permanent address. There may not be any way for you to even input such an address into your bank account's online profile and you may have issues when you contact them by phone. A mail forwarding service can provide you with a real street address (not a PO Box), as many banks require.

I have taken advantage of services that allow me to view changes to my credit report at any time. I need to do this to be sure that nothing is popping up in my credit that should not be there. Identity theft is a very real threat and I take it seriously. Some people suggest that you contact the credit reporting agencies to have them place a notation in your file that you are living overseas. This would make it more difficulty for thieves to open accounts in your name. The downside is that if you do apply for a credit card with a US bank while living overseas there might be a problem when they see the note that your permanent address is overseas. This is not an issue with banks that have significant overseas clients, like PenFed Credit Union.

Ready To Travel


Some credit cards require you to contact the card company before you undertake travel abroad to avoid possible restrictions in processing transactions that are outside your normal patterns of use. Some card providers allow you to do this online, while others do not. Capital One and others use an EMV chip so they do not require any notification of foreign travel. 

You should be sure that your contact information is correct just in case the card company does need to contact you.

Some card providers are implementing the ability to tun the card on and off from the online account. This is a great security feature for added confidence. When you are not planning to use the card it can be disabled online and with a few key presses it can be turned on before you go on a shopping trip.

Many card companies do charge a foreign transaction fee, so I chose cards that do not.

Like the foreign transaction fee, the exchange rate can be another gotcha on your credit card bill. Unlike the foreign transaction fee, the exchange rate cannot be avoided and just happens to be where the card companies pull in their highest earnings per transactions.


  




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