Wednesday, October 03, 2007

Thing two...

Credit cards! I LOVE them, but living in the Philippines is tough for a credit card-0-phile like me, because its definitely NOT a credit card friendly country, darn it! I hate having to spend cash and I hate having to have it on me. Its a complete pain in the neck and big time risky in a semi-lawless place like Angeles City (my wife has been mugged twice there, once at gunpoint, and I've been pickpocketed myself); yet, in the Philippines, having a basket full of pesos on you is almost a must if you want to pay for anything substantial.

In my pre-Philippines life it wasn't unusual for me to have two or three weeks pass without ever having to touch a single bill in my wallet. About the only time I would delve into the folds of my billfold was when I went fastfood for lunch, but even that would no longer be the case these days I've found. Virtually every imaginable establishment, including all fastfood places, now take, and even prefer, that their customers pay with plastic.

When I first arrived to the islands in '02 the archaic requirement for "cash only" was one of the toughest things I had to get used to, after the wonderfully therapeutic heat that is. (No complaints there mind you!)

By now, you've guessed that my "thing two" observation about American vs Philippine living has to do with credit card use. Of course many stores in the Philippines do take them, but they are few and far between and many of these establishments make it a very drawn out and difficult thing to do. Not only that, despite recent regulation forbidding it, many places of business still charge substantial fees when cards are proferred. I heard that we are supposed to turn these "law violators" in, but where? Just point me the way!

I mentioned in an earlier post how my favorite travel agency in Angeles doesn't even accept credit cards anymore and how outrageous is that! A near lawless place like "Sin City Angeles" and they want customers to troop around with what might be thousands of dollars to pay for airline tickets? I don't get it. It's crazy.

That's my main point here. American business practice is to make it absolutely the easiest thing in the world to access and pay for products, any product, whether its a cup of coffee or an airline ticket. There is almost nothing a person with any kind of a paying job here can't find a way to acquire, and all because of Misters Visa and Mastercard. It might not always be a wise thing, but these days, even kids right out of high school are preapproved for substantial credit. Ten years ago, I was incredulous when my kids all received their first plastic right out of high school. They promptly ran them all up and eventually they all declared bankruptcy. Now THAT sure wouldn't happen in the Philippines (Okay, granted, so that's a good thing).

Still, I wish the Phils would get with the program and start making it more widespread to be able to pay with a credit card. But even at the places that take them they at times can turn the "approval process" into a time consuming ordeal. At one of the malls in Makati last year I wanted to buy three rechargable battery fans worth a total of just over $100. My wife went with a sales girl to some little back room to get our credit card approved. Almost an hour later and the transaction was complete--an HOUR LATER! Its bogus, because it seems as if they don't want my money! They DO want us to buy from them, don't they? Isn't that what stores do? Sometimes it doesn't seem like its a very high priority for them. Baffling!

I'd kind of forgotten how much the Philippines credit card thing irks me until I came back home here this trip and saw that it has become even easier and more convenient than ever to use plastic than it was five years ago. Right off the plane I watched my brother swipe his card at the Detroit airport even before getting into his car--off we went, no lines, no cash, and no slow moving cashier to deal with.

At a last second stop through a Burger King drive through in Texas I paid for everyone's order in the car by handing over my Mastercard. I didn't even have to sign a receipt. The young fellow at the window swiped it, verified the 6 dollar and change payment, and three seconds later handed back the card. I don't think I've ever spent less time getting a fast food order filled and payed for. As an impatient American, I CAN appreciate that!

Waiting for my flight out of the dimunitive yet nifty Killeen community airport shared with the Fort Hood flightline, all I had was a hundred dollar bill. I really didn't feel like breaking it for a cup of coffee, so I handed over my MC. Bing bang boom, I'm drinking coffee and eating a donut for just over two bucks. I'd like to say, "Only in the Philippines," but instead I find myself saying, "Sigh.....!"

This will be easy enough to believe, but I didn't have to break my Ben Franklin until I went to get my new stateside drivers license at the Michigan Department of Motor Vehicles. Leave it to a bureaucratic and mostly inefficient institution like a state DMV to ruin my run of NOT having to use cash! Typical, and it only makes sense since, basically, this is a post where I whine and moan about an aspect of the Philippines that I'm not so happy with, so naturally, what do I find right here in the states to compare with my complaint concerning a lack of institutional efficiency, a Michigan DMV. Perfect!

Only less than a week and I'll be back in the Phils where once again I'll have little need to bring out and dust off my plucky little credit card. ...Sigh... I'll miss you old friend...!


Nick Ballesteros said...

I'll catch up on part one of this post but first...

I once had three credit cards which were very handy during the holidays but I have the tendency to overspend, simply because with all the work we do during the holidays, I tend to do last-minute shopping. The interest piles up pretty quickly and I have a very difficult time paying up.

Now, I've closed one card after paying it for so long, and I have less than ten thousand pesos left to pay on the other before I close it too, and I will just keep one card. Is the interest rate the same in the US as with ours? Or is my buying power simply insufficient ? Hmmm.

I think that using the credit card here is still a "last resort" thing due to the interest rate, or people avail of the 12-month zero interest program for things they'd like to buy but cannot due to fund limitation. It's still not as widely accepted as there, where you can even buy fastfood with plastic cash.

I think it's also the bank's infrastructure that prohibits widespread use of the card. We are still on the stage where ATMs are being hooked up to use IP over legacy protocols, so credit card networks are still on the expansion stage as well.

PhilippinesPhil said...

Wat, my friend, credit cards for me are only useful if every month's balance statement is paid off, which I have always done. As you so wisely state, the interest rates on those things is criminal. I love the plastic for the convenience of not having to carry cash around. And your last paragraph about bank's "infrastructure" I'm afraid if true, is so due to choice. Seriously, I've used my cards all over the world and in places even less developed than our dear Philippines. The credit card "thing" I speak of here is I'm afraid symptomatic once again of why the economy there is so far behind the rest of much of Asia,its the lack of willingness to forge ahead, as well as THE willingess to maintain economic status quo, no matter how sluggish it may be. Also, its not just the banks at fault here, its each individual business establishment, each little store, gas station, and merchant. I mean dang Wat, how many times have you been told by a clerk that they don't have change for a P500 bill? This is the kind of unprofessional mindset I'm talking about. Its much deeper than just the refusal of merchants to accept credit cards.

Anonymous said...

Bingo Phil, and right on. As you've pointed out, the "problem", if it is such, lies at a deeper level than mere underdeveloped technology. We've become so accustomed to customer service US style that we are sorely disappointed when we dont find it here, but fail to note the cultural forces that come into play. A columnist in the Star recently related this experience-- in a San Francisco music store he asked about the availibility of a certain CD. The clerk checked his computer and said: "Sorry but this is out of stock at the moment. I can get this item restocked within 24 hours, if you leave a number where you can be reached, I will call you when it arrives." Great service, huh? Well I thought so, but hold on... this is where the cultural divide reveals itself. The columnist was furious and stomped out of the store fuming about those "arrogant American clerks who think they are the store owner..." etc. He then wrote an entire column about it. So the lack of service here has both technical and cultural undertones. Sorry for the length of this diatribe.

Ed said...

Being an American and thus "rich", I have always been leary about paying by credit card in the Philippines. I figure that it probably gets written down by hand or run through a one of those zerox things and then my number is available to lots of perhaps unsavory individuals. So when I do use a credit card there, it is one dedicated to that so I can cancel it easily if need be. Mostly I just go to an ATM and get my 4000 peso limit or whatever it is these days and know that worst case and I get lifted, I'm only out $80.

Here in the states, my debit card gets all the fun of use and I rarely ever write a check or pay with cash. In fact, one of the last places where writing a check is still requested is buying a card. I've tried putting my last vehicle on a credit card and they balked even though my credit limit was twice the purchase price and I could prove I had enough money in my account to cover it when the statement came.

KA said...

cash... what is that?

PhilippinesPhil said...

Macmac, the story about the "outraged journalist" complaining about pisspoor service is a perfect example of how seemingly "unreasonable" American expectations usually leads to even greater efficiencies. I think the guy is an unappreciative idiot, yet, his kind of attitude will cause even better service than what we have now. Its the American way.

Ed, its a tradeoff. You don't trust what you see as a probably backward credit card service in the Phils and so won't use them. Yet, everytime I HAVE used one the charge is ALWAYS sitting there and pending on my MC's internet site as soon as I get home to check it. Charges usually "pend" for about a week before my bank will pay it, so I have plenty of opportunity to cancel payment if necessary, and I've NEVER had to do that yet. For me, the system has been foolproof. And as I said, the greater risk is walking around with at times hundreds and even thousands of dollars in cash! I feel like hiring an armored car sometimes.

Kat, exactly!

Ed said...

I'm sure you are right Phil. I've used my credit card probably a couple dozen times over there and have never have been mischarged. Yet I've had my number swiped once in my life here in the States.

Amadeo said...

Indeed, the “regular" credit cards (Visa, MC, AMEX) are not used prevalently in the PI. But the citizenry definitely uses bank ATMs a lot. That’s why ATM machines are found most anywhere. And the reason for this is because as rightly pointed out by you, Phil, most business transactions are still done in cash.

But one notices, however, that many use instead the bank cards that are available to depositors – BankPI, Metrobank, etc. And many stores (retail, restaurants, etc.) especially in the malls do accept different bank cards.

Thus, this situation is a bit daunting for us whose credit cards were issued outside of the country. For me, the next best thing was opening a deposit account with ATM access, or I could of course, get one of those bank cards. But then one becomes subject to their own set of regulations and restrictions – maybe minimum balances to be maintained, volume of usage, etc. Not ideal for one just visiting.

Having an ATM works for me because ATM machines are easily accessible, especially in malls. For really substantial transactions, I normally issue checks with the added assurance that they can call the issuing bank to guarantee payment. Thus, for me, its works there as well as here in the US.

PhilippinesPhil said...

Ok Amadeo, but my point is that cash is passe. You are doing the Filipino thing and "making do" buddy. It's never going to get fixed because people blithely accept status quo.

Sure, I agree that many mall stores will take my card, but THEN they'll charge me a hefty fee for doing so. That ain't right.

ATMs! Don't get me started. They are raping us foreigners dude. The exchange rates vary from bank to bank but none of them give a fair rate. I've had some screw me out of P5 per dollar! If you're willing to put up with that then no wonder for you it works as well as stateside. Or maybe since you only visit the Phils the "raping" you take is acceptable!

I get my cash by writing dollars to my Filipino dollar account, wait a full month for it to "clear," (another load of BS!) and then go get my cash. Its the ONLY way I can get a fair rate on my dollars.

Amadeo, obviously, you and I see things verrrry differently when it comes to this subject buddy.... grin.

Amadeo said...

Yes, Phil. I suppose it is about perspectives, and how one adapts to local conditions.

Thus, I suppose I pick solutions that go the least resistance route.

And being third-world is a label that will stay with PI for a still longer while.

When I first left, data showed that less than 6% of Filipinos had have any relationship with banks and financial institutions. Thus, in most likelihood commercial transactions were all done in cash. I came back more than 20 years later, they say it has improved somewhat - to about 15%. Still very low compared to more developed countries. The US probably has 80-90%.