Here’s how being kiasu pays off
There are about 7.8 million ceedit cards in use in Singapore today, close to double the number of cards that were in Singapore 10 years ago. This also translates to close to 3.7 credit cards per working adult in the country.
Even more stark, credit card spends have risen nearly 270% in last decade, coming in at $49.9 billion today. This shows that people in Singapore have an increasing appetite for credit cards.
Why Choose To Spend With Credit Cards?
There are many perks to owning and using a good credit card in Singapore. Given the rising trend of take-up and usage in the last decade, it’s obvious an increasing number of people recognise the benefits of using credit cards.
When you own a credit card, you’re alerted to exclusive deals, receive promotional rates with partner merchants and best of all, accumulate rewards in the form of cashbacks or miles. While these are the main lure for most people, there are also other benefits to owning and using a credit card.
Firstly, you enjoy an interest-free loan, of up to a month, each time you pay with your credit card. Moreover, the money that would have been used to pay for your purchase continues earning interest rates in your bank account.
Credit cards also give you access to stores across the world via online shopping. Another point to note is that, many online stores give you additional rebates if you’re paying with certain credit cards.
You also build an emergency payment method with your credit cards. This is especially useful when you travel overseas or have to make a big-ticket purchase. If you were defrauded in a transaction, especially via online shopping or when you were overseas, you can simply report it to your credit card company.
Contrary to what many may think, not spending on your credit cards could actually be detrimental to your personal financial futures, as banks would not have any data to assess your credit worthiness. It is through your utilisation patterns, repayment ability as well as other factors with your credit cards that banks can start assessing your credit worthiness. This becomes especially relevant when you need to get a home loan, car loan or other types of personal loans in the future.
Given all these advantages that comes from paying with a credit card, the next question is how would you go about choosing the best credit card?
The best credit card for you may not be the best credit card for another person.
In general, there are three main types of people who apply for credit cards – 1) first-timers getting their first credit cards, 2) shopaholics who are looking for better deals, 3) meticulous planners making a big-ticket purchase.
We explain how you can go about choosing a suitable credit for yourself in each of these scenarios.
If you’re a first-timer, chances are that you may have started working recently. This likely means that you’re looking for a no-frills card that you can use for your basic daily spending requirements.
On our SingSaver credit card filter, we have a tab just for first-timers. The first thing you have to consider as a first-time applicant is your salary, as this determines the credit cards that you are eligible for. Typically, the minimum annual salary required to apply for most credit cards is $30,000.
The next thing you have to figure is whether you’re a miles or cashback person.
If you have travel plans or enjoy travelling, then it makes sense to accumulate miles. If you’re in the cashback camp, apart from a basic cashback for all your purchases, you should also look at the benefits column in our filter.
For certain categories of expenses, such as dining, online shopping or groceries, you may receive cashback of between 3.0% and 12.0%.
As you can see in the screenshot below, the Citibank Cash Back Visa Card offers up to 8.0% on Grab ride, dining, groceries and petrol spend. There’s also a tab for more details on the credit cards. If you drive, you stand to receive fuel savings of up to 20.88% at Esso and Shell.
The UOB YOLO card, on the other hand, offers a higher cash rebate of up to 12.0% on weekend dining and entertainment for new UOB customers. You also enjoy up to 13% off at Expedia and Agoda with free travel insurance coverage (up to $500,000).
Of course, you also need to look at the fine prints. Many times, these high rebates come with certain conditions such as needing to achieve a minimum spend so do ensure you are familiar with the terms and conditions before you apply for the card.
There’s a special tab for the shopaholics on our credit card filter – aptly labelled “shopping”.
Within this category, you can decide whether you’re a heavy online shopper or prefer visiting retail outlets to browse your purchases. The different cards offer vastly different perks and choosing the right card can mean several hundreds in savings every year.
Shopping online isn’t the only thing you should think about – whether you’re buying in local and foreign currencies make a difference.
The CIMB Visa Signature Card offers up to 10.0% in cashback when you shop online in foreign currencies, as well as for foreign currencies wine and dine spend.
The American Express CapitaCard allows you to earn up to 5.6% in rebates on both online and retail shopping. In addition, when you shop at participating merchant outlets at CapitaLand Malls, you get to earn accelerated STAR$, which can be used to redeem shopping vouchers.
If you enjoy travelling and shopping overseas, the Standard Chartered Rewards+ Credit Card may be for you. It offers up to 10X rewards points on every dollar spent in foreign currency on overseas retail, dining and travel transactions.
This card is also for dining enthusiasts with up to 5X rewards points on every dollar spent on dining transactions. Further, enjoy exclusive dining privileges with up to 50% off a la carte dining at The Fullerton Hotel and The Fuller Bay Hotel Singapore
Meticulous Planners With Big-ticket Expenses
If you have a big-ticket expense coming up, you may want to reconsider your credit cards to maximise your benefits. We have a tab for Air Miles and Cashback that you can use to determine the best credit card for a big-ticket expense.
For those of you planning a wedding, getting a miles card could be even more beneficial as you start accumulating miles that can be redeemed for your honeymoon.
If you’re in the cashback camp, you may be able to receive thousands of dollars in savings if you’re paying for a five or six figure sum in wedding expenses, honeymoon, renovation works for your new home or other big-ticket purchases.
Making big ticket expenses does not come around very often for many of us, this means we should time our credit card applications to reap the best rewards.
For cashback kings, the HSBC Advance Credit Card offers up to 2.5% cashback on all spend, if you’re able to hit a minimum monthly spend of $2,000. For all other spend amounts, you get 1.5% cashback. If you’re able to negotiate favourable terms with a vendor for your big-ticket purchases, and charge $2,000 to your bill on a monthly basis, you’ll be able to save a substantial amount.
If you’re an Advanced Banking customer with HSBC, you’re also eligible for an extra 1.0% cashback.
If you’re looking to accumulate miles, the UOB PRVI Miles American Express Card offers 1.4 miles for every dollar spend locally and 2.4 miles for overseas your overseas spend. There is also no minimum spend or cap for them.
In addition, stand to receive up to 20,000 loyalty miles every year if you spend $50,000 within the year. Also, get up to eight complimentary airport transfers to Changi Airport every year.
Bonus Kiasu Tip:
So, you’ve seen how being kiasu about the credit cards you apply for can be very beneficial to receiving the best cashbacks or accumulating the most miles.
Applying at the right time matters too. Banks usually offer welcome gifts in the form of bonus cashback or miles. Periodically, they also offer additional welcome gifts – so look out for those.
SingSaver compares more than 100 credit cards on our platform to help you determine the best card that suits your spending habits and needs. It also informs you which credit cards offer you the best deals.
On our “best deal” tab currently is the Standard Chartered Rewards+ Credit Card. From now till 31 May 2018, receive $150 cash rewards when your card is approved. For new customers, get an additional $120 cash back when you activate your card within the first month ($100 cash back) and when you charge at least 5 transactions through Apple Pay, Samsung Pay and Android Pay by 31 July 2018 ($20 cash back)