how to choose credit card singapore

How to Choose The Best Card in Singapore: What Suits You?

Getting a credit card can bring financial ease and it is more than a digital form of banking. Owning a credit card can give you:

  • Regular flier miles and bonus miles, where your expenses contribute to ‘miles points’ that give you discounts on plane tickets and such.
  • Cash rebates and cashback offers, where you receive a tiny percentage (at least 6%) of everything you purchase with the card.
  • Direct price discounts on drinks, movie tickets, a wedding banquet, etc.
  • Welcome presents like movie tickets just for applying for the card.

But no matter how attractive the perks are, it helps to know that having a credit card has its share of risks, like overspending, incurring high-interest rates, and credit card fraud.

See also: Cashback vs Cash Rebate vs Air Miles and How to Cancel Credit Card

How Does Credit Card Work?

Your credit card details are sent to the merchant’s bank account when you sign up for it and use it for your purchases. The credit card network then authorizes the bank to process the transaction. Your card issuer will have to confirm your details and accept or reject the transaction.

Payment is made to the merchant once the transaction is accepted. Plus, your present credit is lowered by the transaction amount. You’ll receive a statement from the card provider showing all that month’s transactions at the end of your billing cycle.

 

How Much Do You Need to Get a Credit Card?

It depends on your age. As per the Monetary Authority of Singapore, Singapore-based credit card companies will only issue you with a card if you’re Singaporean, are at least 21 years (there are cards for 18-year-olds as well), and earn:

Up to 55 Years Old Above 55 Years Old

Yearly Salary

Includes non-employment wage

S$30,000 S$15,000

Total Net Personal Assets

>S$2 million

>S$750,000

Total Net Financial Assets

>S$1 million

S$30,000

 

Credit card organizations require that your minimum salary be S$40,000 if you’re a foreigner applying for a credit card.

Different Types of Credit Cards

There are three main kinds of credit cards:

1. Rewards Credit Cards

These are cards that gift you reward types like reward points, miles, or cashback for every dollar spent with them. You can use credit card rewards to redeem products or vouchers from partner organizations.

You’ll view your current rewards balance on your credit card statement at the end of each billing cycle. Some credit card organizations also provide introductory bonus rewards to lure you into signing up. Those offers may include:

  • Zero fees for the first year
  • Thousands of dollars in incentives when you attain a set threshold
  • An introductory 0% APR for the initial several months

2. Air Miles Credit Cards

Air miles are typically linked to an airline’s regular flier program. Creators designed loyalty programs to reward frequent flyers. You receive air miles or points whenever you book a ticket with a specific airline. You can later redeem these air miles to receive a free ticket or lower the price of your next trip.

You earn air miles for every dollar you spend with an air miles credit card. Miles cards are co-labeled with a specific airline and offer air miles on the said airline. Some cards provide general air miles despite the airline you use. Please confirm before application.

3. Cashback Credit Cards

A cashback credit card gives users a tiny percentage of the amount they spend on the cards. The cashback amount collects in your account until you decide to redeem it to offset the following billing cycle or next purchase.

Depending on the card, you can receive rebates for every dollar you spend on:

  • Online shopping
  • Dining
  • Groceries
  • Gas
  • Utilities
  • Grocery shopping

Note that some cashback cards have minimum spending requirements before you can get your cashback reward. Others don’t.

What’s Good About Having a Credit Card

There are many perks to having a credit card like Standard Chartered. Here are some of those benefits:

  • It helps you build your credit score– proper use of your spending ability enables you to build your personal finance and credit score. You stand a higher chance of getting a loan if your credit rating is good.
  • It’s convenient– you don’t have to have hard cash whenever you’re shopping. Just tap or swipe it, and you’ve purchased within your limit!
  • It allows you to maximize rewards from every purchase– you benefit through benefits like cashbacks and points.
  • More purchasing power– different credit cards have different purchasing powers or a maximum credit card limit. You get to spend within that limit! Despite the excitement, it’d be wise to spend what you can afford, as credit cards have a 25% interest rate in Singapore.
  • It allows you to track your expenditure– credit card providers offer a comprehensive breakdown of your spending on your credit card statement. This will enable you to monitor your spending habits and make any necessary changes.

Things to Watch Out For

The following are some things you should watch out for during your credit card application process:

  • Minimum repayment– you might be asked to repay a minimum amount if you don’t clear the monthly balance. It’s usually 3% of the due amount.
  • Cashback– it’s where money is refunded to your card, depending on the amount you spend. It only applies if you clear your due balance each month in some cases.
  • Introductory interest rates– it’s where you begin by paying little to zero interest rate. The rate then increases after a set duration. Ensure you compare these rates and their interest rates once the introductory period is over as you select your ideal card.
  • Charges– have a look at the costs that apply to your preferred card in the credit agreement.
  • The credit company’s track record– read the credit card provider’s clients’ testimonials on their website to determine if they’re reliable and worth your time.

How to Choose the Best Credit Card for You

Picking the best credit card for you is pretty straightforward. Here are some factors you should consider:

  • The Annual Percentage Rate (APR)– it’s the combined cost of the card’s interest rate plus what you pay as standard, like the annual fee. Some cards offer a low APR initially, but it increases with time. Ensure you offer full payment on time and use a card with a low APR to avoid its effects.
  • Your lifestyle– your card of choice should match your lifestyle. For example, if you love traveling, you should go for a card that’s suitable for traveling.
  • Annual fees– credit cards typically come with an annual/ membership fee. Some credit companies practice annual fee waivers to entice you into signing up. Credit card fees might seem unnecessary, but they bring benefits you can maximize to lower costs. Decide if you’re alright with paying them or prefer doing away with them.
  • Rewards– some credit cards have a minimum spend requirement to enjoy rewards. Other provide fixed percentages for their rewards program. And higher percentages for specific categories.
  • Sign-up bonus– some credit cards reward you for accumulating a minimum spend in the first several months of signing up. Others for completing a feat. The feat often has a timeframe, and you must complete it before the due date so you can get your bonus.

Portrait beautiful young asian woman smile with credit card on color background

Is Getting a Credit Card in Singapore a Good Idea?

Getting a credit card is an excellent idea- just as long as you have a stable source of income. It’s no secret that living in Singapore is expensive. So many credit cards can provide the money you need to handle expenses and emergencies, and you can clear your debt once you get your salary.

You just need to pay your debt on time through your credit card bill, understand how a credit card works, and go for the right one, and you’ll be good to go. There’s no harm in consulting an expert even if you’ve researched so you can be extra sure of the ideal pick for your unique requirements.

How to Apply

Here’s how you apply for a credit card in Singapore:

  1. You’ll have to earn an annual income of between S$30,000 and S$50,000, be 21 years or older, and have a decent credit history to qualify.
  2. Head to your closest branch or visit your ideal bank’s website to sign up.
  3. Fill in the provided application form or questionnaire to help the card provider assess your credibility.
  4. Present the required documents. Different financial institutions require you to submit different files. However, the basic ones are Proof of billing, telephone bill, a copy of your Passport or NRIC/FIN, and Proof of Income.
  5. Wait for the verification procedure, which the provider might make through a phone call.
  6. Wait as the concerned provider processes and approves your application. The provider will open your credit line, and the card will be delivered to you upon approval.
  7. Start up your card by using your bank’s ATM, app, or website or a confirmation phone call or verification SMS.

Bonus: Tips on Avoiding Credit Card Fraud

Credit card fraud is among the biggest risks of owning a credit card worldwide. Luckily, credit cards have better consumer protection against fraud than debit cards. You can ensure your details and card are safe by following the effective and simple pointers below:

  • Keep your PIN or password separate from your credit card.
  • Monitor and assess your monthly statements- criminals always take advantage of the fact that most users don’t pay that much attention to the reports.
  • Don’t perform online transactions in a place like a cyber cafe.
  • Apply for SMS notifications, so you’re always in the loop in case of unauthorized transactions.
  • Always carry your card with you and keep a close eye on it during all transactions.
  • Let your bank or credit card provider know of any suspicious transactions you notice early enough to prevent fraudulent charges.

Final Word

Credit cards in Singapore are a major blessing from technology. They help you monitor your spending, make purchasing easier and more convenient, and offer many rewards. However, they can quickly be a liability if you don’t use them properly and don’t pay your credit card bills on time. 

Key Takeaways

  • To qualify for a credit card, you’ll have to earn an annual income of between S$30,000 and S$50,000, be 21 years or older, and have a good credit history to qualify.
  • Proper spending with your credit card helps you build a solid credit score, that’ll help you get a loan later on.
  • A credit card is a worthwhile investment in Singapore. It helps clear bills and handles emergencies before you receive your salary.

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