Master of the card

Many people who had experienced having a credit card in their wallet can tell you this: a card is a powerful and obedient servant but, if not properly controlled, it can become one’s ruthless, unforgiving master.

Ask Joy de Leon, a sales executive of one of the car dealerships in Makati. She once had a dozen cards but she started getting rid of most of them last year.

"The temptation to use the cards all the time was overwhelming," she said. "It was like having an illusion of unlimited power, of being a millionaire. The problem is, the illusion ends every time the bills start to come in."

Joy found herself one day with more than P100,000 in credit card debts, and she had no choice but to "revolve" her credit by paying only the minimum amount due. However, it didn’t prove to be of any help. On the contrary, it turned out to be a quicksand for her. The more she moved, the more indebted she became.

After assessing her situation, Joy decided to throw away those cards that caused her most of her troubles. "Now I only have one card and that’s it," she revealed. "I’m still paying some of my debts, though, but I vowed never again to fall into that trap of using my card whenever I feel like to."

Maturing market

There are now more than 3 million credit card holders in the Philippines and some of them learned their first lesson in card ownership the hard way.

Maripi Jalandoni, customer franchise director of Citibank, said Filipino credit card users have matured through the years and now use their cards judiciously.

"I, for one, no longer carry a lot of cards. I used to collect cards. They’re like a badge in my wallet when I was young.

But now I learned to consolidate. I only have two, a Citibank, and a backup from another bank," she said.

Citibank has the largest base of cardholders in the country, with some 700,000 members. It is undoubtedly the most aggressive, employing different tactics to win and retain customers.

Since 1989, Citibank has not stopped trying to give people enough reasons to get a card. It was the first in the local market to absorb surcharges. Its Paylite system allowed Filipinos to acquire so-called big-ticket items through "gives". And it recently came with a new product that can be accepted even by your local mechanic or even your maid.

Jalandoni said Citibank has done and is still doing everything to provide service to people. Although she admitted the bank had to be more strict in processing of applications and collections, still it provides all the assistance a prospective or active card holder needs.

"We had a problem with delinquent card holders before and we did everything to help them. There are just some people who simply refused to pay without seeking our advice. But many said they wanted to pay, it’s just that they were in a tight situation. So we designed payment schemes that suited their situation," she said.

Jalandoni was hired by Citibank in 1997 as cards category manager. Before that she spent almost a decade mastering the art of brand management under different multinational firms here and in China.

"Managing a credit card brand is something different, something more exciting," she said. "In consumer products like shampoo, the customer is anonymous once he bought the product. It’s impossible for you to analyze their lifestyle. But in credit card, you get to know their way of life."

Jalandoni gets to peek at computer records showing trends and patterns in the usage of credit cards by Citibank’s members. But she said the voluminous data still could not paint a picture of a "typical" Filipino cardholder.

"You cannot lump them in one bundle. You really have to do pinpoint markerting because every cardholder is different. And pinpoint marketing is something not very easy and not very cheap to do," she said.

Ways to go

Jalandoni hopes the market would not just mature but continue to grow. Three things must happen, she said, for the market to expand and for card companies to give back more to the consumer. These are the following: 1.Increase the number of people eligible to own cards; 2. Increase the frequency by which cardholders use their cards; and 3. Increase the amount of purchases cardholders make with their cards.

But how would these things be done?

Jalandoni said Citibank is now offering lower credit lines to allow those with lower incomes to avail of credit cards. To promote more use of cards, the bank has expanded its merchant base to include schools, hospitals and in the near future fastfood restaurants and movie houses. It also removed different charges formerly incurred when a card is used in places like supermarkets and gasoline stations.

Taking the credit card idea a step further, Citibank came up Ready Credit which acts like a personal check.

"You use Ready Credit in places where credit cards are not normally accepted. You can pay your mechanic, or even your maid with it. It’s really like a check. The only difference is it wouldn’t bounce," she explained.

Those with Ready Credit are given a credit line of P100,000. The funds are on stand-by and one pays interest only on the amount he or she "borrowed". For every P10,000, it is estimated that one needs to pay a little over P300 in interest a month.

There was a time when Citibank was growing so fast because of its innovative products and aggressive marketing approach. Jalandoni did not say it but people privy to the bank}s operations said it had to outsource the collection of payment because of the hardships it encountered in the past three years. The bank almost became an "unmanageable success" at its prime.

Jalandoni, though, said they are targeting "realistic goals" this year, something that would keep them moving amid the economic slowdown. She added that Filipinos would get credit cards the moment they see the need for them.

"You don’t impose a need," she said. "They have to see for themselves that maintaining good credit is good. That it’s even better than having ready cash."