Choosing The Perfect Credit Card

5 Rules To Choosing The Perfect Credit Card For You

Do you find yourself signing up for a new credit card everytime you walk past a roadshow that entices you with sign-up gifts? Thinking that you’ll cancel the card after a few months to avoid the card fees, you realise that after a year that card is still slotted in your wallet, un-used.

The marketplace for credit cards in Singapore is more complicated than ever. Rewards points programmes, cashback plans and frequent flyer perks all have us drowning in the fine print, trying to make some sense of what we’re applying for.

If you don’t want to get stuck with a credit card that you can’t take full advantage of, take charge now and have an audit with the current cards you have. Here’s 5 crucial tips to help you weed out the ones that aren’t a match and keep the others for the longer term:

You Are In For The Long Haul

When you’re choosing a new card, make sure you consider not only the short-term benefits, but also whether the card will prove itself useful over the long term. Short-term benefits are usually carrots dangled by banks to hook you in the hope that you do not cancel the card after the initial sign-up bonus.

We understand that these sign-up bonuses can be attractive – functional luggage, bonus air miles, cash rebates and shopping vouchers – but remember after you’ve utilised the short-term benefits, you are going to incur the card cost of the card, which will most likely be more expensive than the gifts you had received.

If a card offers attractive sign-up bonuses, ensure that you look at how your rewards may change over time. Think about your spending patterns and whether that card will help you save money or benefit you over the long haul.

Track your Spending Patterns

A credit card works best when complements your spending pattern. For instance, if most of your credit card spend is on grocery, you might want to choose the POSB Everyday Card or UOB Delight card which are well known for its rebates for shopping at selected supermarkets.

Or say you spend at least $500 a month, you might consider using a cashback card that gives you substantial rebates with a minimum spend per month, like the UOB One Card.

If you have a habit of carrying balances from month to month, low-interest rates could be your priority when choosing a card. Or if you tend to travel at least once every few months, a credit card that allows you to earn air miles would naturally make sense for you, especially when some of them comes with free travel insurance.

The point is to think of credit cards as fulfilling a purpose; whether it’s for earning cashback, accumulating air miles or giving you rewards, they should double up as a payment method that gives you more bang for your buck.

Compare Your Options

Through advertisements, road shows and emails from banks, most of us are deluged with credit card offers on a regular basis. It wouldn’t be surprising if you feel overwhelmed and sign up for a credit card on a whim. Precisely because there are so many options out there and that each offer is designed to entice you to apply, it’s vital to take your time and do your own research before signing up.

Taking into mind point 1 and 2, you should know which category of cards you can focus on. You can then use a credit card comparison tool, like the one we have here to help you compare the different credit cards in that category. What’s more, make sure you check out credit cards offered by your current banking partner, as well as other banks in Singapore, below you can find a link to each credit card provider available in Singapore.

Read Reviews and Forums

Even if you’ve spent hours on your research, sometimes the best way is to learn from the experiences of others. Looking through credit card forums is a great way to discover details about a particular card that you might not have known, especially since financial products these days comes with so many pages of fine prints. Deciding which credit card suits you best should take time and research, so never sign up for a card at the spur of the moment. Carefully consider your needs and make the best choice for yourself.