Credit Card Alternatives for Millennials With Zero Credit

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As the world is slowly starting to push for cashless transactions, it seems all the more relevant to get a credit card as a means of paying for your goods. In the Philippines, though, this seems like a stretch goal. Around 77% Filipinos remain unbanked, and cash is still powering most local transactions—and by most, that means 99%.

In this almost cashless word, credit cards have proven to be a useful commodity. They’re an instant extension of your finances during an emergency or when you have tight cash flow. It’s also the perfect way to boost your credit score and get higher limits and better loan rates in the future.

However, according to a 2019 survey, many Filipinos still haven’t applied for credit cards, yet—17.70% of respondents say that they don’t know how to get one, while 13% think that their income is too low to qualify.

It’s no secret that applying for a credit card in the Philippines isn’t always smooth sailing. There are strict requirements, and not everyone gets approved. This usually has something to do with your income, credit history, and sufficiency of proof that you can pay your credit lines in full on your due date.

Similar to the popular trope that some entry-level jobs require even fresh graduates to have prior experience, it seems like you also need a high credit score to get approved for your credit card application. But, how do you do that if you don’t have a credit card, to begin with?

The answer lies in credit card alternatives.

The fintech industry has exponentially advanced throughout the years, allowing those who don’t have bank accounts to borrow and send money to other people digitally. The same is true with institutions that offer you credit card alternatives.

All of these support the vision of going cashless in the future. Now, you hear of apps that allow you to save money and transfer to other banks without fees. You can use these as ways to boost your credit score so that when the time comes, it will be easier for you to apply for the real thing.

What are these alternatives? Check out a few examples:

  • Prepaid cards – reloadable credit cards
  • Electronic wallets – apps connected to your bank account or reloadable in stores
  • Cashback debit cards – ATM cards with store tie-ups for rebates
  • Online lenders – small-time loans available at the palm of your hand
  • Online pawning – easy listing of items for loanable items online

Note that these are just some of the ways to get you started on getting a credit card and can help train you in becoming a responsible credit card owner. But, how do these increase your credit score?

You can check out the infographic below to give you some ideas on how you can start building your credit score, plus how these are great financial tools to help you manage your money.
It’s never too early to know your options when it comes to budgeting and organizing your expenses, so it’s a good idea to start here.