Using financial products like savings accounts, credit cards, and loans is part of daily life for many Filipinos. But what often goes unnoticed are the hidden costs that come with these services. As a smart consumer who wants to maximize your resources, you want to be aware of the fees and charges that come with such financial products. This way, you can evaluate your options better and steer clear of unpleasant surprises that can mess up your budget. For example, if you want the most beginner-friendly no-annual-fee-for-life credit card in the Philippines and you know the fees and charges for each of your options, then you can determine with confidence which among them is the best match for your needs.
At the same time, if you can easily see a list of the costs associated with your credit card or other financial tools, that’s a good sign. It means that your provider prioritizes transparency. Maya, for instance, offers a comprehensive list of the fees and charges for the Landers Cashback Everywhere Credit Card and the Maya Black Credit Card. Knowing these figures lets you plan better and avoid unnecessary charges.
What are some of the most common hidden costs to watch out for when using financial products and services in the Philippines, and how can you avoid or minimize them? Here’s a quick list.
Monthly Maintenance or Dormancy Fees
Some traditional banks charge you a fee each month if your balance falls below a certain amount. If your account remains inactive for several months, you might also face a dormancy charge. These fees can sneak up on you, especially if you use multiple accounts or don’t monitor them regularly.
To avoid this, banks with a financial institution that offers no-maintenance-fee accounts or don’t penalize inactivity. Maya Savings, for one, does not require a minimum balance and does not charge monthly maintenance fees, making it ideal if you prefer flexibility and fewer obligations.
ATM Withdrawal Fees
If you often withdraw money from ATMs outside your bank’s network, those fees can pile up. In the Philippines, interbank withdrawal fees typically range from PHP 15 to PHP 18 per transaction. A good workaround is to plan your withdrawals. Try to withdraw larger amounts less frequently and always use your own bank’s ATMs when possible.
Foreign Transaction Fees
When you shop online in foreign currencies or use your card abroad, foreign transaction fees can be applied. These often range from 1.5% to 3.5% of the total amount. To avoid overpaying, check if your card charges a foreign transaction fee. This helps you manage your spending when traveling or shopping internationally. As a general rule, also always consider paying in the local currency instead of Philippine Peso. It almost always gives you a better exchange rate and avoids extra “conversion” markups.
Late Payment Charges on Loans and Credit Cards
Missing a due date doesn’t just hurt your credit score, as it also comes with penalties and added interest. These charges can snowball if left unpaid. Set reminders to make sure you never miss a payment deadline. It also helps to keep better track of your finances using e-wallets and budgeting apps. This way, you’ll have an easier time optimizing your cash flow and keeping penalties under control.
Over-the-Counter Payment Charges
Paying bills at physical branches or partner counters may come with convenience fees. While these may seem minor, they can add up over time, especially if you pay multiple bills each month.
Going digital is a smarter move. Paying through e-wallets and digital banks like Maya not only eliminates many of these fees but also saves you time. You can also enjoy added rewards, which aren’t typically available in over-the-counter setups.
Balance Inquiry Charges at ATMs
Believe it or not, some banks charge you just for checking your balance at another bank’s ATM. It’s a small charge, but one that’s easy to avoid. Instead of ATMs, use mobile banking or e-wallet apps to check your balance for free. Maya provides real-time balance updates in-app at no extra cost, so there’s no need to visit an ATM just to see your available funds.
Pre-Termination Fees for Loans or Investments
Paying off your loan early or withdrawing your investment before maturity might sound like a responsible move, but it can come with penalties. Some banks or lenders charge pre-termination fees that reduce or cancel any potential savings from early payments. So, before signing any agreement, make sure to ask if these fees apply. If you think there’s a chance you’ll repay early, look for providers with more flexible terms.
Annual Fees on Credit Cards
Annual fees are easy to forget, especially when you only use your card occasionally. Some cards charge over PHP 1,000 per year, even if you rarely swipe them. Choose credit cards with no annual fees or those that waive the fee under certain conditions. This makes them a practical option if you want the benefits of using a credit line without the extra burden.
Hidden Insurance Add-Ons
Some loans or credit cards automatically bundle insurance policies that you didn’t explicitly agree to. These can inflate your total repayments and may not even be useful to you. If you want to avoid these packages, always ask for a detailed cost breakdown before signing up. If you see an insurance premium you didn’t request, ask if it can be removed. Transparency, like what Maya offers in its product disclosures, makes it easier to spot these add-ons before you commit.
Inactivity Fees on E-Wallets or Investment Accounts
Not all accounts stay free if left unused. Some platforms start charging inactivity fees after a few months of no activity, which quietly eats into your stored funds or investments. To prevent this, use your accounts regularly. Even small transactions can help you stay active. You can also create an account on Maya, as the bank doesn’t charge inactivity fees. Rather, it encourages regular use through ongoing promos and rewards.
Understanding the hidden costs of financial products helps you make the most of your money. It allows you to evaluate options carefully and avoid paying for things you don’t need. By staying informed, you become a smarter spender and a more confident decision-maker when it comes to your finances.
