A number of banks and financial institutions in Singapore offer credit cards to students, keeping their special needs and spending habits in mind. If you’re wondering whether you’ll meet the stringent eligibility criteria that are set by most banks when offering credit cards, you don’t need to be concerned.
Most lenders have a no-minimum-income criterion on their cards. But, credit limit on student cards are also usually lower at S$500 vis-à-vis other cards, which can have credit limits up to S$5,000. A student card promotes clean, cashless economy and makes you more responsible.
If you’re a young employee who has just started his work life, you may be eligible for student credit cards, provided you meet the age and upper annual income cap criteria of the issuer. Different banks may have different sets of criteria on student cards, but many of these are similar.
Student Credit Cards – The Start of Adulthood
Credit cards for students in Singapore are designed to make students more responsible and efficient. A student card promotes financial prudence, wealth management and credit building from a young age. If you continue to make judicious use of your card and make timely payments of your outstanding balance, you’ll get a headstart over your peers when it comes to creditworthiness, an important aspect of financial adult life in Singapore.
Easier Approval Standards
Most top banks in Singapore take a lenient view towards credit scores and credit history when it comes to student cards because it is expected that most students won’t have a great credit score. Unless you have defaulted multiple times or debts have been written off against your name in the past, you can expect the issuing bank to go easy on your application.
Important Guidelines for Student on Credit Card Usage
While laying hands on your first credit card is exciting and marks the start of a new journey in your life, exuberance shouldn’t lead to callousness. You should remember that there is no substitute for fiscal prudence.
You can rest assured knowing that lenders will take a more favourable view of your future credit card applications if you follow the following guidelines.
Settle the outstanding balance on time: As a responsible adult, you’re expected to borrow only what you can pay off. You’re also expected to make a full payment at the end of each month. Revolving the debt will just make it bigger as outstanding credit balances attract heavy interest.
Choose a card after careful consideration: If you’re a Singapore citizen or Permanent Resident, there is no shortage of student credit cards. Go through the offer documents carefully. Don’t skip the terms and conditions section because it helps you understand more about the card and promotional offers.
Don’t max out your card: Although the credit limit on student cards are S$500, it is advisable to not exhaust it. To ensure that you don’t build up debt and attract heavy penalties in the form of higher interest rates, try to use your card wisely. Using 20-25% of the credit limit is considered optimal.
Don’t divulge your credit card details to everyone: Owning a credit card is not easy. It comes with some responsibilities, the first of which is not to reveal your card details to everyone. Make sure that when you’re using it at retail outlets and restaurants, the card is swiped in front of you. Beware of phishing emails, too. If you lose your card or suspect fraudulent transactions, inform your lender without delay.
Compare the interest rates and the annual fees: Even though student credit cards can charge a hefty annual fee, many offer a waiver initially which could vary between 1 and 5 years. In addition, comparing the interest rates is recommended. The interest rates tend to be high as lenders try to discourage students from overcharging their cards. Even a one percentage point difference in rates between two cards could mean a lot of savings.
Don’t use more than you can afford to repay: Credit cards improve your purchasing power. But, you’re not supposed to use them as loan tools. Falling into a debt trap becomes inevitable if you take cash advances and borrowings without settling the dues. If you need loans, personal instalment loans are recommended.
Potential Fallouts of Not Paying Credit Card Dues on Time
Many students in the city-state of Singapore fail to properly appreciate the importance of paying back the outstanding credit balance within the due date. Some may argue that since the amount owed is small, missing out on a few payments or failing to repay the debt won’t affect them or the bank.
However, they fail to comprehend the impact of a default on creditworthiness. Even if the bank writes off your debt considering it to be unrecoverable, it will leave a blot on your credit history. Many banks and NBFCs may turn down your future application requests.
Not just that, even some employers in sensitive domains like law and finance may reject your candidature if a background check reveals that you have defaulted in the past. It may permanently cripple your chances of owning a credit card again because credit card default is considered to be a very serious matter in Singapore.
Benefits on Credit Cards for Tertiary Students
Credit cards for students in Singapore come with a range of benefits. In addition to cashback, reward points, heavy discounts and air miles, you’ll enjoy the following benefits:
Low minimum spend requirements: Using a particular offer or redeeming your loyalty points is easy on student cards because they have a very low minimum spend requirement.
Convenient and smart payment options: Smart payment technologies like Visa payWave and Mastercard PayPass are usually embedded in most student cards to promote convenient contactless payments. So, next time you stop by for retail shopping, just wave your card to make an instant payment instead of waiting to put down your signature on the receipt!
Lot of promotional offers keeping your lifestyle interests in mind: Many of the top banks in Singapore including Citi, DBS, Standard Chartered, BOC and Maybank among others run promotional schemes that include free taxi rides, sizeable discounts on retail spends, dining and online shopping.
Eligibility Criteria for Student Credit Cards
Following are some of the common criteria for popular student cards in Singapore:
- The applicants have to be 18 years old or more to be eligible for student credit cards in Singapore. If you’re below 21, parental consent is needed.
- The upper age limit is usually 27.
- There is usually no minimum income criterion for students. For employees, the minimum annual income criterion is usually S$18,000. Some student cards may have up to S$30,000 annual income limit.
Best Singapore Student Credit Cards
The student card market is fairly developed in Singapore and is an important subcategory of the credit card segment. Check out the most popular student credit cards in Singapore.
DBS Live Fresh Student Card: All Singaporean nationals and PRs in colleges and universities are eligible for the DBS Live Fresh Student Card. You will earn 0.3% cashback on all retail spends using this card, including online shopping. If you’re an undergraduate student of NUS, NTU, SIT, SMU, SUSS, Temasek Polytechnic, Singapore Polytechnic or some of the other leading institutes in the country, you’ll be eligible for this card. You’ll also get a 5-year fee waiver on this card.
Citibank Clear Card: If you love to dine out with your friends, you’ll love the Citibank Clear Card. A minimum spend of S$10 will fetch you a 10% Citi Rebate at Starbucks and a similar spend will get you a 5% Citi Rebate at select Subway outlets. This offer is valid across multiple restaurants and cafes in the city. You can also save up to 14% on fuel at Esso and Shell petrol stations. The basic card will attract an annual fee of S$29.96 (inclusive of GST) only and also comes with a 1-year annual fee waiver.
Standard Chartered Manhattan $500 Card: What if you were told that you’ll be incentivised for retail spending? With this card, you can earn 0.25% cashback on every retail spend. The cashback will reflect on your statement at the end of each month. Annual fee payment, late fee payment and other similar payments won’t get you a cashback though.
Life in Singapore can be fun with one of the many student credit cards on offer. Treading with caution, you can learn to spend and save more responsibly while also improving your credit rating.