Thursday, 13 November 2014

Credit card must-knows

1) Find the right card to use


Know what you spend most at and get a card that gives the most perks for that category of spending.
For instance, if you drive and always top up Petrol at SPC then POSB everyday card might be a good choice due to the attractive daily$ rebate. If you love retail therapy then Citibank Rewards card might be a good one for accumulating reward points and perks.
Compare credit cards here http://www.moneysmart.sg/credit-cards.



2) Remember to redeem


Don't let your credit card points accumulate to neverland. Most of them come with an expiry date eg. UOB's smart$ (6 months), Standchart's reward points (3 years), DBS Capitarewards (1 year)... These points could be used to offset purchases from participating merchants or shopping vouchers.
Citibank Premier miles reward and POSB's daily$ have no expiry dates (correct me if I am wrong).



3) Cashback - lovin' it


Do not like redeeming from merchants or request vouchers (what's more irritating than T&C such as cannot to be used in conjunction with any promotion)? Then go for the direct cash rebate! Some cards say UOB One, OCBC 365 and Citibank Dividend would give you direct cash rebate in the bill provided you meet their minimum criteria.
So do read the fine prints or you would be wondering why your bill doesn't reflect the stated cash rebates.
Also some rebates are capped at a maximum amount, if you already hit that maximum then you should switch to the next best card to use.
When dining, ask if there is any preferred card to use for bill offset or specials. Many restaurants do periodic tie-ups with credit cards.



4) Credit card fees - remember to get them waived


Note that credit cards and even the supplementary cards would come with annual fee. Fret not. Usually if one has no outstanding loan repayment on the credit card, the bank would allow a fee waiver just by calling in to them. Do watch your bills as the annual fee would be reflected on it and be especially alert if you are using giro-repayment.

Overseas spending would incur currency conversion charges which varies between different banks. Of course you might want to go for the cards with overseas spending rebate to use as such. There is also the late repayment fee which brings us to the next point.



5) Credit card repayment - no debt, no pain


If there is one thing you have to remember in your monthly finance, it would be your credit card bill. Interest rate for any outstanding balance can be as high as 25% pa! No investment return is able to recoup the losses from credit loans. One tip is to avoid using many different credit cards in the same period. This is to accumulate rewards more efficiently and also avoid missing out on any bills when making repayment. Making prompt repayments will add to your credibility record with the bank making it easier for you to take other loans in future. So do take a credit card for the perks but not the credit (borrowings).



6) 0% instalment plans - too good to be true?


Nothing explains better than this Moneysmart post http://blog.moneysmart.sg/credit-cards/0-interest-instalment-payment-plans/


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