Enjoy Compare’s Mark Hall takes a look at the credit cards on offer for everyday life in Singapore, and gives a few tips on how you can make a premium credit card work for you.
Your money is important to you. The money you earn equates to a roof over your head, food on your plate, and the ammunition to go out and enjoy life. But what if we tell you that you can make your money go further?
How you can fill your car up cheaper than they guy at the next pump.
How you can eat out at the best Singapore restaurants and pay less than the couple at the next table.
How you can get free – FREE – money every time you go shopping.
This isn’t difficult at all, and there’s no magic, tricks or downright crafty practice at all. In fact, you’ve earned it, it’s something you deserve, and you might only be minutes away from claiming your reward.
So how do you do it? Simple: Get a new credit card.
But wait… Aren’t credit cards all about running up debt?
That’s a very old fashioned response, and the real answer will surprise you. A good premium credit card these days is an investment. Yes, you can still go out there clutching your brand new plastic and run up thousands of dollars of debt which will soon have you up to your neck in a sea of unwelcome financial problems, but that’s not how sensible credit card use works.
A credit card – in the hands of a financially prudent individual – should be treated no differently from your regular bank card, which only lets you spend money you’ve actually got.
It’s a rule we hammer into our readers time and time again, and it bears repeating one more time: Only spend on a credit card what you can afford to pay in the next month.
That way you never have to pay interest on your purchases, and you still reap the rewards of whatever points or discount scheme your card operates. Let your balance build up, and all those points you’ve earned, all those discounts and rebates received – they all become worthless.
Add the benefit of protecting your purchases with your credit card’s guarantee and you have a very powerful weapon indeed.
Finance matters need never be difficult. Everybody encounters problems with money at some time in their life, but with the right approach, anybody should be able to tackle whatever life throws at you with poise and aplomb.
That’s why a credit card should never be seen as “free money” or a rolling bank loan. If you need a loan, apply for one, and you’ll probably pay far less interest and have a clear target date for getting out of debt.
Credit cards are not about debt – they’re about money sense and reward. Let’s see why.
Singapore credit cards
The best deals on the planet
In Singapore, we can count ourselves lucky for a buoyant economy that is the envy of the world, which means that most of us are pretty secure in our financial outlooks, even if we all think we’re rushed off our feet trying to earn that last dollar.
When it comes to personal banking, our nation’s top ranking means that the major establishments have to fight for every last customer and the dollars they bring. This is fantastic news for you – the customer – because it means great rates for saving, low rates on borrowing and some of the most enticing premium and everyday credit card deals on the planet.
If we look at other countries, most of their attractive deals are either a period of 0% interest rates, or a cheap means to shift one set of debts from one bank to the other. In Singapore, the banks understand their customers, know that they want something that doesn’t encourage a swimming pool of useless consumer debt, and offer them deals that encourage safer spending with extraordinary rewards.
That means your bank probably offers a range of credit card deals specifically designed for whatever lifestyle choices you care to make. So, if you’re looking to save money and earn rewards on your shopping; if you want to find discount fuel for your car; or even if you use your card to pay your bills and manage your monthly balance sheet, it’s all there for you.
And if you follow a few common sense rules, your credit card – or credit cards (who says you have to settle for just the one?) – will make your everyday life just that little bit easier.
Beat the annual fee
The one big rule of applying for a credit card is simple: Beat the annual fee.
Most credit cards offer fantastic deals, but they also come with an annual fee. The banks are betting on the fact that most of their customers don’t use their cards that much, meaning that for the vast majority of customers, the banks win. But if you’re a savvy credit card user, you can easily win this battle.
Annual credit card fees range from a very modest $30 to something north of $300. While this outlay may be alarming at first sight, remember that you’re only going to apply for a card where you know you’re going to beat the fee. That means a little bit of forward planning, canny spending, and the knowledge that your rewards will outweigh the fee within a couple of months.
Get the right card, spend wisely, pay back your entire balance at the end of every month, and relax in the knowledge that you’re winning at credit cards.
Some banks will even waive the fee in the first year. Just ask – you might be pleasantly surprised.
So, what types of card should you look at?
Credit cards for your lifestyle – Shopping
Everybody needs to shop. And let’s face it, some people like to shop more than others.
Whether it’s for your everyday grocery shopping, or whether it’s for luxury goods, the right credit card in your wallet or purse should be there to save you money.
Most banks offer what the banks call cashback credit cards. This means that every time you make a purchase on your card. You’ll either receive a cash rebate or a percentage discount.
You might need to do your research as some cards only offer these deals at participating retailers, so it pays (in cold, hard dollars) to do your research and make sure you apply for a card that offer deals in shops you’ll know you’ll use.
And here’s where we remember the golden rule: Beat the annual fee.
Cashback credit cards may offer – at the time of writing – between 0.3 – 3% cash rebate on grocery purchases. When applying for the card, you need to weigh the amount of cash back on your monthly grocery spend against the credit card’s fee. So, a bit of simple maths – If the credit card annual fee is $180, that’s the equivalent of $15 per month. The card offers a 2% rebate, meaning you’d need to spend $750 a month on your card to earn that much back. (Remember that you’re paying off the month-end balance in full every month – don’t overspend just for the sake of a few per cent in rebate).
Now, those figures may be a bit knife-edge for you, but remember that the cash rebate is probably not the only offer that comes with the card, so you’d probably apply if you want to take advantage of dining and petrol saving offers.
However, if your spending is limited, there’s currently (July 2014) one credit card available in Singapore where the annual fee is $30, and the shoppers’ rebate is a big 3% capped at a maximum of $800. That’s a card well worth looking out for if you want to save money on your regular purchases and actually turn a modest profit every month.
Credit cards for your lifestyle – Driving
Drivers are particularly well provided for in Singapore when it comes to credit cards. The oil companies, like our banks, know there is a limited customer base on the island, so they are fighting like dervishes to win your loyalty. That means drivers’ credit cards offer some of the most generous deals you are ever likely to see.
For example, a credit card with an annual fee of around $200 will offer the car user a thumping 18% discount at selected petrol stations. Once again, the key is Beat the Annual Fee, so you have to remember where exactly these selected stations are so you make sure you get the maximum discount whenever you fill up.
Now, we’ll be the first to admit that Singapore hasn’t exactly got miles and miles of open roads. But if you’re a regular driver who needs a car for work or everyday journeys, the mileage and fuel use soon adds up, and your petrol discount credit card could be the most valuable piece of plastic in your wallet or purse.
Even if you have a car and don’t use it a great deal, you might still find these cards worth the money. As with shopping rebate cards, the petrol discount is usually not the only offer attached to the account. Better cards will also offer you discounts on shopping, dining, entertaining, and other purchases. Others will have points or rewards schemes. As usual, our standard advice on beating the annual fee applies – work out how many reward points you’d expect to earn in one month, and find out if the reward is worth more than the credit card fee.
Take a look at our credit card comparison service to find the ideal card to go with your car.
Student credit card Singapore
Credit cards for your lifestyle – Student
You’ve got your whole life ahead of you, you’re in college, and you’re looking for a sensible way to manage your money. A credit card – we will admit – is probably not on your key list of immediate needs. You may even question why you need a credit card at all at this time in your life.
This being the case, we draw your attention to our explanation at the top of this article: Credit cards are not out reckless spending and running up debt. Credit cards are about cool money management, and making the most of the cash you’ve got.
That means that banks are happy to issue credit cards to students, often with lower credit limits and lower annual fees, with offers that suit the student lifestyle.
We’re talking free entry and discounts in clubs and bars, along with modest discounts and rewards schemes. But the main advantage of a student credit card is that it won’t let you overspend, giving the young holder a grounding in how to manage money, especially when temptation is at your fingertips.
This grounding should be rewarded once you leave college, start a career and have a regular income.
Travel credit card
Credit cards for your lifestyle – Travel
We’ve covered travel credit cards pretty comprehensively in an earlier article on premium credit cards, but they bear mentioning again.
Travel credit cards are pretty much the blue chip of all Singapore credit card offers, geared toward highly paid Singapore business people for whom regional and global travel is a way of life.
Strangely enough, their annual fees are no greater than other premium or everyday credit cards, but the competition between banks for executive custom means they’re prepared to make their exclusive offers as attractive as possible. That’s why executive travel credit cards come with discounts and offers that make it nigh on impossible for the regular traveller to avoid beating the annual fee.
These cards – amongst other things – offer discount travel, discounts on big-name hotels, executive lounges, and more loyalty points and frequent flyer miles than the average citizen knows what to do with. One of the highest end cards even offers free luggage sets and (trust us, we’ve seen them) they’re none of the cheap stuff.
Like most premium cards, the travel offers aren’t the end of the deals – they also offer shopping and petrol discounts, as well cash money off fine dining. They’re the very top end of our credit card market, and even if you don’t travel a great deal, they might still be worth consideration, especially if you like free luggage sets.
Credit cards for your lifestyle – Leisure, everyday expenses and money management
Singapore has credit card offers to suit virtually every lifestyle. There’s even one specifically for National Servicemen which offers shopping and other offers. And by careful planning, you should be able to find the ideal card for your way of life.
So, what if you’re not a big international traveller, someone who rides the bus to work and considers themselves frugal enough for a shopping cashback credit card not to be worth the outlay? Obviously, the banks haven’t forgotten about you in the slightest.
If you’re an ez-link user (and who isn’t?) you’ll probably not be surprised to learn that there are credit cards that offer a discount on your top-ups and when you tap and go.
A combined ez-link and credit card is pretty much a no-brainer if you use public transport often, and Singapore (as usual) is one of the first cities in the world to combine travel smart cards and payment cards (even in London, with its much-celebrated Oyster Card scheme, they have to tell users to keep their travel card and bank cards in separate wallets as the touch and go systems aren’t yet compatible). If you use SMRT, you’d be smart to look into these cards, and we apologise for that dreadful joke.
Public transport isn’t the only area where a credit card comes to your rescue. We can also find you deals that give respectable discounts on recurring monthly bills, such as your telco account. Check out how much you’ll save, and be aware that you’re going to have to crunch the numbers to make sure you Beat The Annual Fee. But if you’re careful, and plan your expenses down to the last full stop, you should be able to turn out the ideal credit card that suits your Singapore lifestyle.
And let’s not forget that if you routinely head over the board to Malaysia – and many of us do on a daily basis – you can find a credit card offer that extends it rewards across frontiers into Malaysia and elsewhere.
Best credit card
Where do I find the best credit card deals?
The obvious choice is to go down to your local bank branch, talk to a sales representative and pick up a few leaflets. That is indeed a possibility, and one that shows loyalty to the bank with whom you’ve probably been a customer for years.
But here’s news: You don’t have to stick with the same bank. There are no rules about being loyal to the same brand name year in, year out. With the market a competitive as it is, it’ll pay you to strike out on your own and find out what other financial institutions are offering.
It’s a cut-throat world out there, so while your bank’s shopping lifestyle credit card might be offering double points and a 5% cash rebate, their competitors might have just brought out a similar card with triple points and 6% money back.
Your bank’s not going to be loyal to you, so why show them loyalty? Shop around, and see what’s out there. Your new card will be issued to you based on your credit rating, and certainly not for the fact you’ve had the same bank account since you were at college.
And the best news of all is this: You don’t have to do any legwork. Just click on the “credit cards” tab at the top of this article and start your search. You’ll be able to compare the best credit card offers for whatever lifestyle you have, and you could have your new account approved within minutes, subject to your financial status.
The Rules of Credit Cards: Some boring rules, and our interesting ones
Of course – and here comes the small print – there are rules and regulations over who gets a credit card and who doesn’t. We’ve touched on this before in previous articles about money management and credit cards in Singapore, and we should really be grateful to MAS (Monetary Authority of Singapore) for covering our backs to ensure that we as a nation don’t find ourselves foundering in massive consumer debt like some other first world countries we can mention.
The rules, then, are pretty straight for a new credit card: You can’t borrow (ie your credit card limit) more than 12 months’ pay. And you can’t take out a card if you’ve unpaid debts of over 60 days. Limiting consumer debt goes a long way to creating a stable financial environment for the whole Singapore state, and it has the added advantage of encouraging us as individuals to make sure that our finances stay reasonably in order.
For the majority in Singapore, debt is not a problem, and credit is treated with the respect that it deserves. As long as we abolish the mind-set that credit equates to money that’s waiting to be spent, credit cards will never be a problem.
So, while there are official rules for credit cards, Enjoy Compare’s unofficial rules are the ones you really have to observe to make your life as care-free as possible:
1. Never spend more than you can pay back in one month
2. Always pay off the full balance every month
3. If you pay an annual fee, look to beat that fee by making full use of your credit card offers and discounts
4. In your attempts to beat the fee, be aware of rules one and two: Don’t overspend just for the sake of saving a few dollars.
One final note – beating the annual fee isn’t the be-all and end-all of having a credit card. It’s a financial tool designed to make your life easier and more interesting. It might even help to be cheeky, give your bank a call, explain that you’re an excellent customer, and could you waive next year’s fee? You never know…
But then, it pays to be adventurous with your personal financial choices, and if you manage your finances well, you’ll find your credit card working for you – and paying its own way – for years to come. Go on – Enjoy comparing credit cards!
