Guide To Credit Cards For Singaporean Starters
Did you know how many credit cards for Singaporeans are allowed? At least five credit cards are acceptable. Find out how.
An average earning Singaporean has at least five credit cards for various needs and whims.
Basically, your lifestyle will dictate which card you are going to get.
However, how will you know which credit card yields the best shopping, dining, and travel experience and which ones can potentially drag you to debt?
Credit: https://sgtop10.com/top-10-cash-back-credit-cards-in-singapore-2020/
Facts About Credit Cards For Singaporeans
Planning to get your first credit card? Here are the basic things you must know:
Credit Card Approval depends on the bank’s set of qualification checklists.
Banks offer a lot of credit cards for Singaporeans. Each bank has its own qualifications, such as the minimum required salary and credit score. Depending on the bank’s discretion, it is essential to check your eligibility first before starting the loan process.
This way, you can apply for the cards you have the most chance of getting approved. Also, it does not mean that if one issuer declined you. There’s a possibility you will get the same response as the others.
Make sure you pass your complete requirements for quick processing.
Banks are known to require a string of documents to verify your identification and creditworthiness. After all, they have been risk-averse.
Make sure all of your documents have consistent information, such as your name, demographic data, and age. In case there are some discrepancies or missing documents, they will put your application on hold. Or worst, you get declined.
Credit card processing might take 3 to 10 working days.
Since every bank has different policies, your credit card processing will expectedly vary from one bank to another.
You will receive your credit card a week after your application gets approved. To ensure the maximum speed of your approval, pass all the required documents in clear copies.
Your credit limit can be as much as 4 times your salary.
Your bank will base your credit limit on your annual income and creditworthiness. Therefore, your credit limit maybe four times your monthly salary, yet it still varies as each bank has its own policy.
Also, they will consider your credit score. So, as much as possible, keep your credit score in good shape by paying your loans diligently.
Increasing your credit limit will depend on your income and credit score.
If you think you have to increase your credit limit, ask your bank to review your application. However, it would be best if you remembered that it would usually depend on how well you have dealt with your loans in the past.
Remember that the bank usually considers your credit score your credit limit amount. You must be able to can without straining much of your finances and putting your necessities on hold. Pay your monthly bills on time and avoid inquiring for loans in short intervals.
Missing your payment incur high-interest rates
Credit cards are not charged with interest rates if you always pay in full on time. However, if you paid only the minimum required payment, an interest rate would charge together with additional fees.
Though there are ways to take care of the growing overdue credit card bills, it is a big mistake to let it happen in the first place. Instead, it is better to avoid this situation to keep your credit score in good shape.
You can apply for more than one credit card.
You can get multiple credit cards from various banks at the same time. However, it could get complicated as each card has its repayment schedule to be dealt with. If you have a couple of credit cards from a single bank, it will reflect your credit card in just a single statement.
It is easier to keep track of your payments. Be mindful of your spending and when your payment is due. Missing your payment will incur a high-interest rate plus a penalty charge.
Effective interest rates are usually at 24% to 25%.
The effective interest rate (EIR) is the interest rate charged on your credit card. Each bank has its way of computing the charged interest. It will be more accurate when comparing the interest rate if you use the EIR per annum rather than the monthly rate. Be sure you read the fine print to understand the terms and maximize the use of your credit card.
You have to pay an annual fee.
Aside from the EIR, remember that you also have to pay the annual fee charged by the bank or your credit card provider. Some banks do not charge an annual fee. Take time to check if your bank waives the annual fee.
Pay the balance in full to keep to a 0% interest.
Some Singaporeans pay only the required minimum payment. However, one must remember that the outstanding balance will still be charged with the interest rate. Therefore, the longer you put off the payment, the more your debt will grow.
Payment methods
There are various ways to pay your credit card bills. For example, you can pay online, through your phone, have it auto deducted from your bank account, or get down to the bank and personally pay over the counter.
You must pay the minimum payment to avoid flunking your credit score.
If you fail to your bill, you will be charged with the EIR and a late payment fee. However, if you pay the minimum payment, your remaining balance will be charged with the EIR without the late payment fee. It will reflect your payments in your credit score.
Not all banks allow credit card chargeback or refunding payments or purchases.
You have to read your credit card’s fine print to know if a chargeback accompanies your cards. The chargeback is a refund offered by the credit card provider if you are not satisfied with it. Not all banks offer this. Make sure you ask your bank if they have it.
How to Choose The Best Credit Card?
Since this is your first credit card, it is best to answer these questions before submitting your credit card application.
Why are you applying?
It is better to clearly define why you are applying for a credit card to best know which one will fit your needs and not just your wants.
Save money
In a way, credit cards give discounts on every purchase from the participating merchants by cashback. So basically, while spending, you are also earning cash.
Rewards and free miles
It could be one of the main reasons why credit cards for Singaporeans are in use. Every time you use your credit card when paying for the things you usually buy, you earn rewards. Some even yield free miles you can use for vacation. You can earn as much as 4 miles in every dollar you spend.
However, do not focus on rewards and miles for now. Instead, it would be best if you first took note of your spending habits. This way, you can quickly tell if you are ready for a credit card.
Borrow for free
You can take home the goods you buy by swiping or tapping your credit card. Viola! There will be no need for cash and no interest rate to pay if you settle your bill on time. So you are paying up at ease. Also, you keep your credit score in good shape as there will be no accumulated debt.
Free insurance
Credit cards give free insurance such as travel insurance, health insurance, car rental insurance, baggage insurance, and others, depending on the terms it comes with and the purpose of the card.
Slimmer wallet
Why do you have to carry a wad of cash when you can just use a card to pay for your shopping? A slimmer wallet is easier to take anywhere, and it means a lighter bag to carry.
The maximum liability is $100.
What if your credit card got stolen or lost? Do not fear too much. You will only be liable for as much as $100. Just make sure that you notify your bank as soon as you lose your card.
What does your bank offer?
Banks offer various cards with different uses. Check what your bank offers to see which one fits you best.
What is your spending habit?
Get the card that will help you save up and gain more from the purchases you usually make. It won’t be good to get a card because of certain promos as these require specific purchases before you can avail them.
What are the regular fees?
- minimum repayment
- annual fee
- charges
- introductory interest rates
There are actually a lot of credit cards for Singaporeans to choose from. However, the best credit cards are the ones that do not make you buy things you do not naturally purchase. Instead, choose those that give you rewards and perks from the things you naturally buy with cash.
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