Choosing your first credit card soon? Here are 5 reasons why you should consider an unlimited cashback card!
We can all agree that acquiring your first credit card is an exciting step into adulthood. Not only is it a milestone of getting older, but it’s an indicator of greater financial freedom and disposable income generally. (Although, we must preface that this does not correlate with greater financial responsibility.)
But that’s beside the point; your first credit card poses as a significant asset in your wallet, unlocking new spending opportunities and access to a whole slew of bank discounts and offers. With so many different credit cards to choose from, it’s natural to feel a little intimidated trying to select the right card to suit your needs and preferences.
Miles might help to sponsor your next flight ticket while receiving reward gifts are nice too. But for card beginners, there are multiple reasons why an unlimited cashback card might be your winner instead!
Curious? Here are some of our reasons why we think an unlimited cashback credit card is a great card for young adults to have in their arsenal.
Table of contents
- Reasons to own an unlimited cashback card
- Comparison: Best unlimited cashback card recommendations
- Summary
5 reasons to choose an unlimited cashback credit card as your first credit card
1. No minimum spend and no cashback cap
As a young adult just entering the workforce, you wouldn’t want to be overwhelmed by expenditure management. There should be minimal complications involved, with spending made convenient, simple, and fuss-free.
This explains why an unlimited cashback card fits the bill.
Normally, you’d have to hit the card’s minimum monthly spend to qualify for cashback. But unlimited cashback cards require neither a minimum spend nor a cashback cap. This means that cardholders can effortlessly earn cashback with every purchase without fretting over having to qualify for it by hitting a target amount each month.
The absence of a cashback cap also removes the hassle of mindfully switching between credit cards when limits are hit. For example, the UOB EVOL card has a total cashback cap of S$60 per month. Thus, once the S$80 has been fully attained, it acts as a signal to switch over to their other cashback, miles, or rewards cards to continue earning rebates in other manners.
In comparison, you’d never face such a predicament with an unlimited cashback card.
2. Greater cashback eligibility across categories…
It’s also widely known that unlimited cashback cards have greater eligibility across various spend categories. Typically, credit cards bear different mechanics emphasis since each card is created to meet different consumer demands and preferences. Some cards are marketed as grocery credit cards while others are more dining and online shopping centric.
Based on their expenditure purposes, these cards will have their own category eligibility and exclusions. How category eligibility works in credit cards is based on an institution’s or company’s Merchant Category Code (MCC). The criteria for what is or isn’t eligible are determined by the respective banks.
Common examples of MCC exclusions include (but are not limited to):
- MCC 6529 to 6540: Quasi Cash/Financial Services (e.g. e-wallet top-ups, utilities, insurance premiums)
- MCC 8211 to 8299: Education Institutions
- MCC 9000 to 9999: Government Services
- MCC 5993: Other Miscellaneous Purchases (e.g. cigar stores and stands)
Even then, this list of exclusions is not exhaustive. One bank’s classification of a merchant might differ from another bank’s. You’ll have to scrutinise each card’s T&Cs to identify the classifications accordingly.
Unfortunately, unlimited cashback cards aren’t immune to such spend exclusions either. But, there are some exceptions.
3. … Even e-wallet top-ups, insurance premiums, and bills
For instance, the AMEX True Cashback Card is the true champion of ‘limitless’ spending. (The UOB Absolute Cashback Card used to be too, but more on that later.) While other cards might not consider quasi-cash or quasi-financial services as eligible spending (for cashback, miles, or points), it has minimal spend exclusions.
💡 Pro-tip: Take advantage of AMEX’s 3% welcome cashback bonus on all eligible transactions (up to S$5,000) in the first six months of your AMEX True Cashback card approval.
The rebate rate will drop back down to 1.5% after either the S$5,000 spend limit is met or the six months are up, whichever comes first.
UOB Absolute Cashback Card Welcome Offer: Get up to S$50 Cashback on the transactions charged within thirty days from card approval date when you successfully apply for a UOB Absolute Cashback Card. Valid till 31 October 2024. T&Cs apply.
Plus, get a Samsonite EVOA Z Spinner 25” Exp (worth S$730) when you apply, spend a min. of S$1,000 per month for two consecutive months from card approval date and pay the annual fee for the 1st year of your card membership. Valid till 31 October 2024. T&Cs apply.
[Update!] Unfortunately, from 6 May 2024 onwards, transactions like charity, education, government, healthcare, utilities, and other professional services will be reduced from the bonus 1.7% to a mere 0.3% cashback for the UOB Absolute Cashback Card.
Well, at least one redeeming quality remains: you can still foot recurring premiums under MCC 6300 (Insurance Sales, Underwriting, and Premiums) and earn 1.7% cashback – along with other regular spend categories like retail shopping, F&B, groceries, travel, transport, and others.
4. Great for big-ticket item purchases
Speaking of unlimited cashback, using such cards to fund your big-ticket purchases is also a great idea. Why? Because imagine buying your car with a regular cashback card; chances are you’d bust the rebate cap instantly on a >S$100,000 purchase.
Let’s take the Mitsubishi Space Star car as a case study.
Mitsubishi Space Star*
Average Open Market Value (OMV) = S$14,864
Excise Duty (20% of OMV) = S$2,972.80
GST (7% of OMV + Excise Duty) = S$1,249
Registration fee = S$220
Other charges = ~S$9,705
Cost of Cat A Certificate of Entitlement (COE) = S$87,889
Total car ownership cost = S$116,999
*Values as of August 2022
Assuming you purchase the car with DBS Live Fresh, common sense will tell you that its 6% cashback on eligible contactless transactions (capped at S$50) will immediately be hit. This is where an unlimited cashback card comes to the rescue!
Switching to the Standard Chartered Unlimited card rewards you with a limitless 1.5% cashback. You’ll effectively earn S$1,755 in rebates on the Mitsubishi Space Star purchase.
💡 Pro-tip: Double that figure (3% cashback) when you deposit funds into an Unlimited$aver account.
See also: 18 Best Credit Cards For Big-Ticket Items
5. Same access to bank promos (as other credit cards)
All credit cards unlock cardholders with access to a catalogue of exclusive offers and promos offered by the issuing bank. Unless you hit the card’s minimum spend easily, why waste your budget by forcing yourself to increase expenses unnecessarily?
You’ll be able to spend comfortably with an unlimited cashback card and still capitalise on bank-specific discounts and rewards. Catch our drift?
Best unlimited cashback credit cards to apply for on SingSaver
If you’re still reading up until this point, you’re a real trooper! Allow us to recommend the best unlimited cashback cards for you to consider applying for.
Cashback credit card | Perks |
UOB Absolute Cashback | 1.7% cashback No spend exclusions |
AMEX True Cashback | 1.5% cashback 3% welcome bonus cashback (capped at S$5,000 spend within first six months) |
Citi Cash Back+ | 1.6% cashback 10% welcome bonus cashback (min. S$800 spend within first two months) |
SCB Simply Cash | 1.5% cashback 100% rebate when paying bills via SC EasyBill Up to S$277 extra cashback (min. S$200 spend within first 30 days) |
[UPDATE] UOB Absolute Cashback Card
As mentioned, the UOB Absolute Cashback Card offers 1.7% cashback with no minimum spend or cashback. It’s the current highest rebate offered on the market.
[Update!] Initially, it was heralded for its lack of spend exclusions, but now, what used to be its strongest selling point has been severely nerfed. From 6 May 2024 onwards, it no longer awards the bonus 1.7% on transactions like school fees, utilities, rent, e-wallet top-ups, and more. Instead, it'll only net you the base 0.3% cashback now.
UOB Credit Card Welcome Offer: Receive a Samsonite EVOA Z Spinner 25” Exp (worth S$730) or a GoPro (worth S$590) or an AirPods Pro and AirTag (2 units) (worth S$439) or up to S$350 Cash Credit or up to 31,000 miles when you apply for select UOB credit cards and fulfil the minimum spend requirements. Valid till 31 October 2024. T&Cs apply.
AMEX True Cashback Card
The AMEX True Cashback Card offers 1.5% cashback on all eligible spending, with no minimum spend or cashback cap. Compared to UOB Absolute Cashback, it’s not totally immune to spend exclusions. There are certain non-eligible categories like balance transfers, annual card fees, cash advance loans and others.
While 1.5% is the base rebate rate, this card sets itself apart thanks to the generous 3% welcome bonus cashback on the first S$5,000 eligible spend within six months of card approval.
Thanks to this bonus, cardholders can earn a maximum of S$150 rebate in those months.
Citi Cash Back+ Card
Another crowd favourite, the Citi Cash Back+ is a mid-tier card because of its 1.6% cashback with no minimum spend or cashback cap. Unfortunately, this card has considerably more spend exclusions than the aforementioned ones.
You can redeem your cash instantly on the go via SMS in rebate values of S$10, S$20, and S$50.
In any case, it’s still a decent cashback card to funnel all your retail spending towards. But if you need some convincing, give our Citi Cash Back+ card review a read.
SingSaver's Exclusive Offer: Receive the following rewards when you sign up for a Citi Credit Card:
🚀Fastest Rewards Fulfilment🚀: Get the cash rewards within four (4) weeks after successful application — the fastest rewards fulfilment yet! T&Cs apply.
*📣For Citi PremierMiles Card: Receive an Apple iPad 9th Gen 10.9 wifi 64GB (worth S$508.30) or a Samsonite Straren Spinner 67/24 + 2X AirTag (worth S$690.80) or 18K Heymax Miles or S$320 FairPrice Vouchers or S$320 Cash via PayNow upon activating and spending a minimum of S$500 within 30 days of card approval. This card offer is exclusively available on SingSaver. Valid until 31 October 2024. T&Cs apply.
Get an additional S$100 eCapitaVoucher when you simultaneously open a Citi Citigold Account. Valid until 31 October 2024. T&Cs apply.
*📣For Citi Prestige Card: Get a Samsonite Straren Spinner 67/24 + 2X AirTag (worth S$690.80) or 18K Heymax Miles (worth S$300) or S$320 FairPrice Vouchers or S$320 Cash via PayNow upon activating and spending a minimum of S$500 within 30 days of card approval. This card offer is exclusively available on SingSaver. Valid until 31 October 2024. T&Cs apply.
*📣ONLY AVAILABLE ON SINGSAVER📣
Other Citi Credit Cards: Receive an Apple iPad 9th Gen 10.9 wifi 64GB (worth S$508.30) or a Hinomi H1 Classic V3 Ergonomic Office Chair (With Headrest) (worth S$659) or an Apple AirPods Pro Gen 2 + Magsafe Charger (worth S$408) or S$320 FairPrice Vouchers or S$320 Cash via PayNow upon activating and spending a minimum of S$500 within 30 days of card approval. Valid until 31 October 2024. T&Cs apply.
For Citi SMRT Card and Citi M1 Platinum Visa Card: Receive an Apple iPad 9th Gen 10.9 wifi 64GB (worth S$508.30) or Dyson Micro 1.5kg Vacuum (worth S$599) or S$320 FairPrice Vouchers or S$320 Cash via PayNow upon activating and spending (min. S$500 spend) within 30 days of card approval. Valid until 31 October 2024. T&Cs apply.
⬆️Reward Upgrade Campaign⬆️: Upgrade your rewards when you top up as low as S$200. Valid until 31 October 2024. T&Cs apply.
- S$200 for an Apple Watch Series 9 (GPS) 41mm (worth S$604.50)
- S$800 for an Apple Watch Ultra 2 GPS + Cellular 49mm (worth S$1,210.10)
- S$980 for a Macbook Air 13" 256GB M3 (worth S$1,599.00)
- S$1,200 for an Apple iPhone 15 Pro 128GB (worth $1,664.25)
- S$1,786 for a Samsung Galaxy S24 Ultra Titanium Gray 12+512GB 5G (worth $2,128.00)
Standard Chartered Simply Cash Card
Last but not least, the Standard Chartered Simply Cash Card is another respectable card featuring 1.5% cashback with no minimum spend or cashback cap.
One of its perks includes full cashback when you pay your bills through SC EasyBill function. Furthermore, get up to S$277 rebate when you activate your physical card and spend S$200 on eligible merchants within 30 days of card approval.
If you need further information, maybe our Standard Chartered Unlimited Credit Card review can help.
SingSaver Exclusive Offer: Enjoy the following rewards when you sign up for a Standard Chartered Simply Cash Card:
Receive a Dyson Micro 1.5kg Vacuum (worth S$599) or a Nintendo Switch OLED (worth S$549) or an Apple AirPods Pro Gen 2 + Magsafe Charger (worth S$408) or S$380 Cash when you apply and spend min. S$500 within 30 days of card activation & approval. Valid until 31 October 2024. T&Cs apply.
🚀Fastest Rewards Fulfilment🚀: Get the cash rewards within four (4) weeks after successful application — the fastest rewards fulfilment yet! T&Cs apply.
⬆️Reward Upgrade Campaign⬆️: Upgrade your rewards when you top up S$1,050.00 for a Macbook Air 13" 256GB M3 (worth S$1,599.00). Valid until 31 October 2024. T&Cs apply.
See also: Credit Card Comparison: AMEX True Cashback vs. Citi Cash Back+ vs. SCB Simply Cash
Summary: Simplicity is key
Now, this must’ve been a lot of information to digest. Learning about new concepts like monthly bills, minimum payments, and annual fees as personal finance beginners and novices can be intimidating and tough.
But hopefully, we’ve managed to deconstruct how general cashback mechanics work and explain why an unlimited cashback credit card is a good first choice.
To reiterate, your first credit card should be straightforward to use. It shouldn’t involve you jumping through multiple hoops to satisfy rebate conditions. A limitless cashback card drowns out all the noise of minimum spend, cashback caps, differing categorical rebate rates and spend exclusions.
It simplifies everything into an easy-to-use and fuss-free card that’s effective for both everyday and major expenses. But as always, remember to read the fine print of your bank’s T&Cs if you’re unsure about eligible purchases!
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