The primary purpose of a credit card is to provide a means of unsecured credit from a bank for making purchases. These purchases can be made without cash or an ATM. Every card has a predetermined credit limit that must be repaid within the month.
Credit cards are different from debit cards in that you do not have to have the money sitting in your account right away. Your credit limit is determined by how much you earn and your current credit score.
You are essentially borrowing money from the bank whenever you use the card. At the end of the month, you will receive a bank statement showing how much you spent and what you need to pay back in order to balance your credit again. If you pay these fees back on time, you will avoid any additional fees.
There are a variety of different credit cards, each of which provides you with a specific type of reward system.
There are literally hundreds of credit cards to choose from. It’s very difficult to choose just one card as the best of them all. So, instead of looking for the #1 credit card in the country, you’re better off choosing the one that fits your needs the most. This is how you can do that:
|Credit Card Name||Card Category||Perks|
|Citi Cash Back Card||Cashback||Cashback on Dining, Groceries & Grab|
|American Express® Singapore|
Airlines KrisFlyer Credit Card
|Air Miles||Earning miles plus travel perks|
|Unlimited Cashback Credit Card|
(Standard Chartered Bank)
|Cashback||Unlimited cashback plus Ez-link|
|American Express® Platinum|
|Rewards Points||Best reward perks|
|Citi Premiermiles card||Air Miles||Annual Bonus Miles & Lounge Access|
|DBS Live Fresh Card||Cashback||Highest cashback on contacless|
|UOB One Card||Cashback||Rebate on daily expenses|
|HSBC Advance Credit Card||Cashback||Generous all-spend cashback card|
|UOB Yolo Credit Card||Cashback||Cashback on online spend, dining|
Now that you have an idea of which credit cards you may be interested in, you need to check them out a little closer. The terms & conditions section is the best place to learn these things.
Check everything, including expiry dates, minimum spend, exclusions, credit limit, and so on. If you’re still unsure about anything to do with the credit card, be sure to ask a bank rep.
When it comes to using credit cards, you need to consider the benefits of combining some of them for various extra rewards. Certain rewards options, such as miles and cashback cards, do not work well together.
However, other options, such as points credit cards, do. Points credit cards enable you to convert your points into specific rewards or cash, depending on your needs.
If you feel like you will need a variety of rewards to suit your life style, then points credit cards are the way to go!
At some stage, you’ll need to know the differences between Visa, Master, & American Express cards. These three types of cards are the most common option for global payment networking. This means they allow your credit card to work anywhere in the whole world.
Visa and Mastercards are accepted in more than 200 countries, while America Express is only accepted in approximately 140. Visa and Mastercards are more widely accepted than American Express. That being said, American Express has a strong reputation for customer service and satisfaction. They are also the only network that issues their own credit cards.
Take time to determine which provider network fits your spending habits and life style.
After some time, your debts will start building interest. The build-up of interest from debts is called APR. (Annual Percentage Rate) APR usually sits anywhere between 12% and 20%.
You will receive a statement every month showing everything you purchased during that period. It will also give you your outstanding balance and the interest that you gained that month. You only have to pay the minimum amount which is typically 2-3% of your outstanding balance. That being said, it is better to pay as much of your balance as you are able to further reduce your interest.
Should you manage to pay off your entire balance, you can earn anywhere up to 55 interest-free days. This means that anything you spend with credit during this period will not build interest until the allotted interest-free days have expired. If you don’t keep up with your outstanding balance before this period runs out, it will start building interest again.
Singaporean bankers and lenders use CBS credit scores to determine if a customer is reliable enough or not. It uses a 4-digit number that is determined by the Credit Bureau Singapore.
Credit agencies determine your credit score. Credit score is the repaying capacity and probability of default on loans. Your score ranges between 1000 and 2000. The closer to 2000 your credit score is, the more reliable bankers and loaners will find you.
A low credit score, being nearer to 1000, means that you are a risky client, reducing the chances of your being able to acquire a credit card in the future.
If you are able, you should pay off your entire balance each month. This will allow you to avoid the interest. If you can’t pay off the entire month, at least aim for the minimum monthly payment. This will allow you to avoid some of the extra interest costs. That being said, you should always aim to pay more than that so that you will have less to handle the next month.
When you miss deadlines for payments, you will be charged quite a large penalty and your credit score will significantly drop. Credit score is vitally important for future loans. Don’t take it lightly.
A direct debit account is the best way to make sure you pay off your credit balance each month. (At least your minimum credit balance)
Every time you apply for a credit card, whether you succeed or not, it leaves a mark on your record. When your record is checked for a new credit card, they may reject you simply because you have applied for so many of them in the past.
Most credit cards provide useful rewards that can help you in one way or another. While certain rewards are tempting, make sure to pick a card that provides ones that are most useful to you. If you tend to fly a lot, a flyers card would be best for you. If the typical rewards are of no use to you, you can always grab a cashback card to get a small percentage of your money back!
When using your credit card overseas, you may get charged a small amount extra. You need to check your credit options for this charge and determine which one has the lowest charge.
Credit cards are best used directly. Withdrawing cash tends to cause additional charges over and above what you are already spending. Avoid withdrawing cash unless absolutely necessary.
Fraud is a serious problem that should be avoided at all costs. Be very careful where you keep your card and when you use it. Don’t let anyone see what is on it, no matter how close they are to you. Never share your PIN and check your account statements regularly to ensure no one has used your card.
The primary use of a credit card is to ‘borrow’ money from the connected bank in order to make purchases ahead of time. A credit card offers you a small ‘loan’ known as credit which you can use and pay back each month.
If you are unable to pay back your credit within the month, you will likely get hit by severe interest fees. It is best to use only as much credit as you know you can repay before the month’s end. MasterCard, VISA, and American Express are the largest payment networks offering credit card plans. (Though, they do not necessarily offer them to everyone)
Credit cards help the best of us through a tough month. But their purpose doesn’t end at giving you some spending money a week or two before your salary comes in. Many cards also offer points for travel, dining, and so on. Make sure you check out what kind of points a credit card offers before going for it. You should pick one that suits your needs the best!
Credit cards are also highly convenient. You can use them just as easily online as you can in-person. This way, you don’t need to carry lots of cash, if any, around with you when you mean to buy something.
Last, but certainly not least, a credit card provides you with the financial freedom to take advantage of promos and deals even if you don’t have the necessary funds prepared just yet. You can select the best credit card for your situation using these factors.
There are so many different types of credit cards that you are bound to find one that fits your exact needs! There are balance transfer credit cards for debt consolidation, secured credit cards for those who don’t earn enough for a regular credit card, and many more.
Whether you have a preference between MasterCard, Visa, or any other branch, you will always be able to locate what you need here on Roshi!
Most credit cards offer rewards on top of everything else. Let’s take a look at the three most common credit card rewards in Singapore:
Before making a choice, remember that you will not be able to ‘cash in’ these rewards points right away. Each type requires a different amount of money to have been spent before you gain a significant reward.
You have the choice to redeem cashback or rewards in a short time or wait. The longer you wait, the better the rewards. Longer wait times bring about the best conversion rates.
The methods for acquiring a credit card vary depending on how much money you make. Take a look at some of the factors that will help you decide:
Roshi helps you easily filter out cards that are below or above your annual earnings, allowing you to gain a credit card that is perfect for your budget.
All you need to do is fill out an application online or in-person, depending on your preference. Make sure you provide proof of your income in conjunction with the card you are requesting.
Once you’ve submitted it, the bank will inform you on what kind of credit card you can get and how much you can borrow with it. Following this, all you need to do is activate the card and sign it on the back.
Minimum balance is not the aim you should have. It is there for emergencies only. Credit cards are designed as short-term loans, meaning that you should repay them within the month you loaned. Failing to pay it off and only reaching minimum balance will land you with a 20-24% interest rate increase. Obviously, you don’t want that!
Paying minimum balance will also negatively influence your credit score. This will risk your ability to make loans in the future. Whenever possible, loan only as much as you can pay back in time to avoid these problems.
Debit cards do not allow you to borrow anything. You can only spend as much as you currently own. Essentially, a credit card lets you borrow extra money for a month whereas a debit card does not.
The best way to prevent credit card fraud is to be vigilant when you use it. There’s no sure-fire way to completely avoid it unless you monitor your usage closely. Make use of alerts, keep track of your transactions, and avoid phishing scams.
Your credit card statement may not seem important, but it really is. DO NOT throw it away. Make sure you read it thoroughly and deal with it as early as possible. (Right away, if you can) You can use online banking, an ATM, or whatever method is most convenient for you.
Take a look at both advantages and disadvantages to owning a credit card: