Credit cards come with a host of attributes and advantages – a fantastic purpose why credit cards are a popular phenomenon. If you are searching to apply for a credit card anytime quickly, right here are 10 items you unquestionably want to know. These points will give you a improved understanding of how credit cards operate and what you can expect from them.
Annual costs on credit cards
All credit cards provided by banks (at least a main percentage of them), come with an annual fee. The annual fee mainly varies from one card to another, even in the case of cards offered by the same bank. Commonly, Premier cards that offer improved advantages than typical cards come with a higher annual fee.
Though the Major card nearly certainly comes with an annual fee, supplementary cards also come with an annual charge in most situations. From time to time, the annual fee on the supplementary card is waived for the very first year or so – this is to maintain the card extra competitive and in-demand. Certain banks waive the annual charge on the principal card as nicely – for the initial year, or initially two years, or longer.
Annual rate of interest
All transactions you make working with your credit card attract a particular rate of interest recognized as the annual percentage price of interest (APR). The interest price is dependent on the bank that’s offering the card and the variety of card. The interest price for most credit cards is Singapore is between 23% p.a. and 30% p.a.
Banks enable for an interest totally free period of about 21 days from the release of the statement (once more, this depends on the bank and the variety of card) and do not charge an interest if the amount is repaid in full within this interest free window. If the amount is not paid just before the end of the interest totally free period, interest charges will accordingly hold applicable.
Cash advance charges
Credit cards allow shoppers to make emergency money withdrawals from ATMs. These money advances carry a handling charge of about five%-6% of the withdrawn quantity, besides interest charges that fall in the variety amongst 23% and 28% p.a. Interest on cash advances is computed on a everyday basis at a compounding rate until the amount is repaid in complete. Money advances are typically a risky phenomenon, largely considering the high interest charges. So if you withdraw dollars employing your credit card, it is advisable that you repay the quantity in complete at the earliest.
Minimum month-to-month payments
As a credit card customer, you are essential to pay a minimum amount each and every month – or the entire quantity if that is feasible – amounting to three% of the total month-to-month outstanding balance. Minimum payments will need to be created by the payment due date if late payment charges have to avoided. The minimum payment in your credit card month-to-month statement can also incorporate pending minimum payments from previous months, late payment charges, cash advance charges, and overlimit costs, if they hold applicable.
Late payment charges
If the minimum amount isn’t paid by the payment due date, banks levy a specific fee, normally referred to as the late payment fee. The late payment charge for credit cards in Singapore can be anywhere in the variety among S$40 and S$80, based on the bank offering the card.
Overlimit costs
Overlimit costs hold applicable and are levied by the bank if the allocated credit limit is exceeded. Overlimit costs can range among S$40 and S$60 for credit cards in Singapore.
Cashbacks and reward points
An aspect that tends to make credit-cards a quite exciting phenomenon is the reward points/cashbacks that can be earned on purchases. Distinct cards are structured differently and enable you to earn either cashbacks or reward points or each, on your purchases. Some cards let you to earn reward points on groceries, although some other let you earn cashbacks or reward points on air ticket bookings, retail purchases, and so on. Cashbacks and reward points are features that are precise to certain credit cards and the extent of positive aspects depends on the variety of card and the bank providing the distinct card. Reward points earned on purchases can be converted into exciting vouchers, discounts and attractive buying/retail purchase/on the web bargains from the card’s rewards catalogue.
Balance transfers
Specific credit cards permit you to transfer your entire credit card balance to that certain credit card account, enabling you to consolidate your debt. Balance transfer credit cards come with an interest totally free period of six months – 1 year, depending on the card you have applied for. In Best CC shop 2023 of balance transfer cards, banks charge a processing fee and may well also charge an interest (unlikely in a majority of situations). Just after the interest cost-free period (six months – 1 year depending on the card), typical interest charges on the card are applicable for transactions and money advances.
Air miles programmes in Singapore
Particular credit cards (largely premium credit cards) provided by some banks in Singapore allow you to earn air miles by converting your reward points earned on purchases applying the card. Commonly, air miles cards come with a higher annual charge owing to their premium nature. As a buyer of a premium credit card, you can accumulate enough air mile points to completely offset your subsequent getaway!