In most situations, having access to credit is a good thing. For instance, if credit is used to cover emergencies or leveraged to achieve milestones like earning degrees or setting up a viable business, then credit can be good, if not essential.

Now, as average incomes continue to rise in the Philippines, credit has become more accessible than ever. This increased access made working Filipinos more familiar with the nuances of responsible credit use. Indeed, online searches like "best credit card Philippines for starters" have also surged year over year, signaling a real appetite for personal financing among the wider population.

However, while good credit products are widely available to business owners and long-time workers in the mainstream economy, students and fresh graduates have relatively few high-quality credit options available to them. Similarly, those who have worked informal jobs or those who have only started working may not be able to access the loans and credit cards they want. Fortunately, many financial institutions now offer virtual credit lines that cater to these underserved individuals.

Whether you're a freelancer, microbusiness owner, or a new employee who needs safe lending options, this new wave of easy-to-access loans can be a game-changer.  Here are a few key advantages of having an easily accessible virtual line of credit.

 

 

1. IMMEDIATE ACCESS TO FUNDS

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An easy-to-access virtual credit line provides you with more financial breathing room when unexpected expenses like medical emergencies and home repairs arise. Unlike traditional loans, a credit line allows you to withdraw funds as needed, with no long waiting periods required. In particular, if you apply for Maya Easy Credit, it’s possible to receive a response and approval within a working day (depending on certain factors). Once approved, you can use your Maya Easy Credit to shop directly from the Maya Shop. Maya Easy Credit can also be used to scan to pay in stores, online shopping, and transfer funds to your Maya Wallet.

 

 

2. GIVES YOU THE ABILITY TO BUILD A CREDIT SCORE 

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Mainstream lenders need to look at your repayment behavior and other financial activities before they can assess your creditworthiness. So, if you’ve only recently become financially included, then this history will be quite short or even nonexistent, making it difficult for lenders to make a judgment call.

Applying for a virtual credit line is usually much easier, particularly when it comes to documentary requirements, as the allowed borrowing amount is much lower. Moreover, using it responsibly strengthens your financial credibility over time. So long as you pay your loans on time, you will improve your credit score, giving you access to more favorable housing, car, and business loans in the future, should you need them.

 

 

3. MORE FLEXIBILITY IN USAGE

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Many loans are specific-purpose loans, which means that you may be violating their terms if you use the funding for something outside the scope of the agreement. This can be very inconvenient if you need extra funds to address fleeting challenges. For example, some educational loans do not cover your paperwork or travel expenses, tying you down even if the money is technically available.

With a virtual credit line, however, much like a personal loan, you have free rein to use the proceeds for whatever purpose you need. This avoids penalties and greatly simplifies spending for emergencies.

 

 

4. IMPROVES CASH FLOW MANAGEMENT

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Having a virtual line of credit gives you more options to manage your cash flow, helping bridge financial gaps during low-income months. For instance, if you are a freelancer with irregular payout schedules, this credit availability may help you cover critical costs like bills or daily necessities, buying you time for your income to come through.

 

 

5. HELPS WITH EMERGENCY PREPAREDNESS 

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Ideally, you should be setting up an emergency fund that is equivalent to about three to six month’s worth of your regular income. However, this is difficult for most people to achieve, especially at the start of their careers. A virtual credit line, while not ideal, can give you valuable financial flexibility during hard times, supplementing or even substituting your regular emergency funds until you are able to build one.

 

 

6. OFFERS REVOLVING CREDIT 

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Technically speaking, a credit line is a revolving credit facility, which means you can reuse the available balance after you repay what you've borrowed. This eliminates the need to constantly reapply for financing, enabling continuous liquidity. You’ll save time, effort, and the hassle of providing extensive documentation each time you need cash.

 

 

7. REDUCES DEPENDENCE ON LOW-QUALITY DEBT

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A virtual credit line from a recognized and BSP-regulated institution like Maya is a much safer alternative to common options like informal borrowings and high-interest payday loans. These common options pose a serious financial risk and often lead to a cycle of debt due to excessive compounding interest. Meanwhile, a line of credit only requires you to pay for what you used; if you didn’t borrow anything, all the funds will remain available to borrow whenever you need them.

 

 

8. PROVIDES A MEANS TO IMMEDIATELY SEIZE INVESTMENT OPPORTUNITIES

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Some investments and limited-time purchases often require immediate access to capital. When you have a readily available virtual credit line, the funds are always ready to access, ensuring you don’t miss out on these one-time opportunities.

 

 

DISCOVER A WORLD OF POSSIBILITIES WITH YOUR VIRTUAL CREDIT LINE

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As you start strengthening your financial foundations, it makes sense to explore all your options for instant liquidity. Today’s line of credit products are easier to access than ever before, making them a good first choice for many Filipinos.

To maximize the advantages of these products, shop around for a reliable financial institution that offers flexible credit solutions. In particular, look for digital banks that have mainstream acceptance among businesses and the wider public. Features like widely accepted digital wallets and quality mobile apps should also make it easier to use and pay off your borrowings. With the right financial partner, building your formal credit history can be more convenient than ever.

 

~ WORDS CONTRIBUTED BY BEN, COVER PHOTO BY ANGIE REYES FROM PEXELS