Cashback or Rewards: Which Credit Card Perk is For You?

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Will a cashback card help you save? Or will a rewards card give better returns?

When it comes to choosing a credit card, Singaporeans are becoming more sophisticated than ever. The 2016 J.D. Power Credit Card Satisfaction Survey revealed that 52% of cardmembers chose their primary card because of cashback, while 36% were attracted to the rewards programme. However, these Singaporeans were less satisfied than those who chose a credit card based on customer service reasons.

While it feels great to have a card provider that treats you like a VIP, it’s still worth finding a credit card that helps you save money through rewards. But to earn these perks, you need to choose one that gives the most benefits for every dollar spent.

Is a cashback credit card the way to go? Or will rewards credit cards really reward you for your spend Here’s why you might want to choose one over the other:


Why Cashback Cards Are Great

The case for cashback cards is quite compelling, and the main benefit is obvious: it’s like having a permanent discount every time you shop. Here are others:

Save on Everyday Spending

Cashback credit cards in Singapore give rebates at supermarkets, petrol stations, drug stores, and other places you frequent for everyday necessities. But before you think that cashback is only awarded to practical purchases, some credit cards like the UOB YOLO Card also offer rebates for dining and entertainment.

If you notice hundreds of dollars going to these categories each month, then cashback might be the reward for you.

Save Money at Your Preferred Stores

Cashback is typically awarded to spend categories like dining or groceries, but there some credit cards that reward you for patronising specific establishments.

For example, the POSB Everyday Card gives a 5% rebate at your friendly neighbourhood supermarket Sheng Siong, 3% rebate at Watson’s, and up to 20.1% petrol savings at SPC. If any of these are located near your HDB block, then this card makes it easy to save money on groceries or health and beauty items.

Get Rewarded Every Month

If you’re the type of person who can’t wait months for reward points to stack up, then a cashback card is for you. Assuming you meet the conditions (see the Fine Print section below), all the cashback you earn for the month is automatically credited to your account, and is used to offset your statement.

The Fine Print

Earning cashback isn’t as simple as charging everything to your card. Most cards require a minimum spend of several hundred dollars each month before you start earning cashback. There is also a limit to how much cashback you can earn per month, and it is usually around S$80 or less.

For example, the Citi Cash Back Card gives you 8% cashback on all supermarkets and restaurants in Singapore. However, you only get the cashback if your monthly spend in that month’s statement of account is S$888 or more. Additionally, cashback on groceries, dining, and petrol for that month is capped at S$25 per category each month. This means you can only earn a maximum of S$75 each month.

So if you decide to go for a cashback card, look beyond the advertised cashback rate. Find out how much the minimum spend is, and make sure it’s an amount you already spend on for a particular category. Stretching your budget just to meet the minimum spend defeats the purpose of getting a cashback card to save money.


Why Rewards Cards Are Great

Rewards cards let you rack up points with every spend on the card. You can exchange those points for air miles, travel vouchers, dining vouchers and more. Here’s why they might be great for you.

Spoil Yourself for Spending

Rewards cards live up to their name by spoiling you with treats and small luxuries once you’ve accumulated enough points.

For example, HSBC’s Revolution Credit Card gives 1 point for every S$1 spent, 5x Rewards on local shopping, dining and entertainment transactions, and 10x Rewards on online transactions every Wednesday. Here’s how many points you can earn in a month:

Monthly Spend Rewards Points
Dining S$600 3,000
Online Shopping (Wednesday) S$400 4,000
Online Shopping (Other Days) S$100 500
Entertainment S$300 1,500
Others S$400 400
Total S$1,800
9,400 points

With 9,400 points, you can claim S$40 worth of HSBC vacation vouchers, S$30 worth of HSBC dining vouchers, or 2,000 Krisflyer miles.

Exclusive Offers

On top of getting rewards points, cardholders get access to exclusive offers unique to the card. For instance, HSBC’s Revolution Credit Card gives you 12% off Agoda bookings, 10% off FoodPanda bills, and a 14% instant discount at all Caltex and Shell stations.

Attractive Welcome Gifts

Many rewards cards give tangible gifts from the moment you sign up. For example, the American Express Platinum Card lets you choose between a first year annual fee waiver and exclusive gifts upon card approval.

The Fine Print

There’s no such thing as a free reward, and with a rewards card, you often need to spend in the thousands to earn anything of value. The rewards you can claim are often limited to specific services or products, so they may not be as appealing if the airline dates don’t work for you or the catalogue doesn’t carry items you want.

Additionally, you often need to spend large amounts within a certain time period to claim welcome gifts or additional bonuses. You may also need to pay a small fee to convert rewards points to air miles.

Always read the fine print and study the rewards catalogue before applying for a credit card. A rewards card is not worth it if you have to spend beyond your means to claim gifts.

So Which Credit Card Should You Get?

At the end of the day, your credit card should reward you for things you normally spend on. As we say time and again: understand your lifestyle and spending patterns before choosing a credit card.

If you have two kids and own a car, it’s worth getting a cashback credit card with high grocery and petrol rebates. If you like to travel and eat out, look into rewards card that offers air miles points and dining discounts

Compare your options and read the fine print carefully to get the most out of every dollar you spend.  Whether you pick cashback or rewards, be sure your credit card’s perks are worth getting and within your reach.

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Lauren Dado

By Lauren Dado
Lauren has been a content strategist and digital marketer since 2007. As’s Content Manager, Lauren edits and publishes personal finance stories to help Singaporeans save money. Her work has appeared in publications like Her World, Asia One, and Women’s Weekly.