Credit cards, if used carefully, can help you save money on a daily basis. You can unleash the full potential of your cards by keeping in mind a few hacks of saving when you using your card. From simple ways such as paying your bills on time and in full, to maximizing the rewards earned on them, credit cards can help you save more each time you use them.
There is no dearth of category-specific cards in Singapore. You can choose a credit card to use specifically for shopping, travel, paying your bills, petrol purchases and so on. Such cards offer rewards, cashback/rebate, and air miles on eligible transactions.
For example, if you travel frequently, using a travel card will earn you air miles on all eligible transactions. You can accumulate your air miles and redeem them for flight tickets in the future. Similarly, if you use a shopping card on purchasing apparel, shoes, bags, accessories, gadgets, etc. you will earn reward points which can be redeemed for shopping vouchers and discounts at your favourite stores.
Interest rates are only applicable when you do not make full outstanding payments on your credit card statements. Interest rates have a range between 24% p.a. and 28% p.a. and will be imposed when you do not make complete outstanding payments. If you pay your bills in full each month, you will enjoy interest-free or grace periods on your purchases anywhere between 20 days and 51 days from your transaction date. A minimum interest may be charged at the rate of S$2.5 or S$3, depending on the card issuer.
If you own multiple credit cards and are currently paying a high interest rate on your purchases, you can choose the balance transfer facility. Under this facility, you can consolidate the outstanding balances from all your cards and other unsecured lines of credit into a single credit card and enjoy a low interest rate. Many banks offer a promotional interest rate of 0% p.a. applicable for the first 6 months when you choose balance transfer. You can optimise this interest-free period to pay off a large portion of your outstanding balance to save on interest payments.
If you are using credit card to make large purchases, you have the option to convert them into instalment payment plans and enjoy 0% interest rate for specific tenures. This will also spread out your payments over the course of a few months rather than burden you with making a huge transaction and repaying the whole amount the next month.
If you are in dire need of cash or in an emergency situation, it is better to use your debit card to make a cash withdrawal or opt for a personal loan instead of using your credit card. This is because credit cards charge an exorbitant fee on cash withdrawals. Every withdrawal you make will cost you between 5% and 6% of the withdrawn amount with a minimum charge of S$15, in addition to an interest rate of 28% to 30%. Whereas, personal loans charge a lower interest starting from 8% p.a.
Also, the interest on cash withdrawals will start accruing immediately without any grace period.
If your credit card account is in good standing, i.e. you make full outstanding payments every month, you have not missed any payments or made late payments, not exceeded your credit limit, etc., you will enjoy lower interest rates. For example, Citi charges a retail interest rate of 26% p.a., but credit card accounts with good conduct will enjoy a promotional interest rate of 20% p.a. Other banks in Singapore also offer similar benefits.
Almost all credit card issuers run promotions on their cards from time to time. Promotions can be in the form of discounts on purchases, freebies or complimentary goodies, accelerated rewards/cashback earning potential and so on. Making use of such promotions is like having money in a bag! For instance, if you own a Visa Signature Card, you will have access to Visa Luxury Hotel Collection which offers complimentary room upgrades, best available room rates, complimentary breakfast, etc. at partner hotels.
If you are a brand loyal person, there is no better way to save than owning a co-branded card. Owning such a card allows you a plethora of opportunities that are associated with specific brands. For example, the American Express CapitaCard is a co-branded card which offers accelerated reward points on purchases made at CapitaLand malls. Additionally, cardholders will also enjoy complimentary parking and privileged parking at CapitaLand malls.
Many credit cards in Singapore, especially travel cards, offer you complimentary travel insurance if you pay for your flight tickets using your card. Several such insurance policies cover you, your accompanying spouse and children. Although it may not be a comprehensive cover, it is sufficient for short getaways and trips.
If you want your family and friends to own a credit card, it is advisable to apply for a supplementary card for several reasons. The first reason is that, in most cases supplementary cardholders will enjoy the same features and benefits as principal cardholders. Additionally, supplementary cards will also accrue rewards, cashback/rebate, miles, etc. and they are more often than not, credited to the principal cardholder’s account. This allows you to save more at a faster pace.
These are a few hacks that will help you save more on a regular basis. Keep them in mind to continue getting the most use out of your credit cards on every use.