Credit cards come with a host of features and benefits – a very good reason why credit cards are a popular phenomenon. If you’re looking to apply for a bank card anytime soon, here are 10 things you definitely need certainly to know. These points will give you a much better understanding of how credit cards work and that which you can get from them.
Annual fees on credit cards
All credit cards made available from banks (at least a significant percentage of them), come with an annual fee. The annual fee mostly varies from one card to a different, even in the event of cards made available from exactly the same bank. Usually, Premier cards that provide better benefits than normal cards come with a higher annual fee.
As the Primary card most likely comes with a annual fee, supplementary cards also come with an annual fee generally in most cases. Sometimes, the annual fee on the supplementary card is waived for the first year or so – this really is to keep the card more competitive and in-demand. Certain banks waive the annual fee on the principal card as well – for the first year, or first 2 yrs, or longer.
Annual rate of interest
All transactions you make utilizing your credit card attract a certain rate of interest called the annual percentage rate of interest (APR). The interest rate is influenced by the financial institution that’s offering the card and the type of card. The interest rate for most credit cards is Singapore is between 23% p.a. and 30% p.a.
Banks enable a pursuit free period around 21 days from the release of the statement (again, this depends on the financial institution and the type of card) and don’t charge a pursuit if the amount is repaid in full through this interest free window. If the amount isn’t paid before the end of the interest free period, interest charges will accordingly hold applicable.
Cash advance charges
Credit cards enable customers to make emergency cash withdrawals from ATMs. These cash advances carry a handling charge around 5%-6% of the withdrawn amount, besides interest charges that fall in the product range between 23% and 28% p.a. Interest on cash advances is computed on a regular basis at a compounding rate before amount is repaid in full. Cash advances are usually a risky phenomenon, mostly taking into consideration the high interest charges. If you withdraw money utilizing your credit card, it is advisable that you repay the amount in full at the earliest.
Minimum monthly payments
As a bank card customer, you are required to pay for the absolute minimum amount every month – or the whole amount if that’s possible – amounting to 3% of the sum total monthly outstanding balance. Minimum payments must be produced by the payment due date if late payment charges need to avoided. The minimum payment in your credit card monthly statement can also include pending minimum payments from previous months, late payment charges, cash advance charges, and overlimit fees, when they hold applicable.
Late payment charges
If the minimum amount isn’t paid by the payment due date, banks levy a certain fee, commonly known as the late payment fee. 정보이용료 현금화 The late payment fee for credit cards in Singapore may be anywhere in the product range between S$40 and S$80, depending on the bank offering the card.
Overlimit fees hold applicable and are levied by the financial institution if the allocated credit limit is exceeded. Overlimit fees can range between S$40 and S$60 for credit cards in Singapore.
Cashbacks and reward points
An aspect which makes credit-cards quite a exciting phenomenon may be the reward points/cashbacks that can be earned on purchases. Different cards are structured differently and allow you to earn either cashbacks or reward points or both, on your own purchases. Some cards allow you to earn reward points on groceries, though some other let you earn cashbacks or reward points on air ticket bookings, retail purchases, etc. Cashbacks and reward points are features which are specific to certain credit cards and the extent of benefits depends on the type of card and the financial institution offering this card. Reward points earned on purchases may be converted into exciting vouchers, discounts and attractive shopping/retail purchase/online deals from the card’s rewards catalogue.
Certain credit cards allow you to transfer your whole credit card balance to that particular credit card account, enabling you to consolidate your debt. Balance transfer credit cards come with an interest free period of 6 months – 1 year, depending on the card you’ve applied for. In the event of balance transfer cards, banks charge a processing fee and may also charge a pursuit (unlikely in a majority of cases). Following the interest free period (6 months – 1 year depending on the card), normal interest charges on the card are applicable for transactions and cash advances.
Air miles programmes in Singapore
Certain credit cards (mostly premium credit cards) made available from some banks in Singapore allow you to earn air miles by converting your reward points earned on purchases utilising the card. Usually, air miles cards come with a higher annual fee owing for their premium nature. As a person of a premium credit card, you are able to accumulate enough air mile points to fully offset the next vacation!
In brief, your credit score is just a projection of how well you’ve managed your debt in the past. It will take into consideration your payment patterns and records instances of late payments, credit overlimits, loan defaults, history of regular/timely payments, etc, and gives banks a concept of how good you may be at handling debt in the future. A good credit score is crucial to getting loan applications and credit card applications approved.
The above mentioned mentioned points comes into play handy if you should be contemplating applying for a credit card. These aspects will give you a thorough understanding of how credit cards work in Singapore, giving you a much better concept of that which you can expect. These may also work if you should be unhappy together with your current card and are looking to change over to a different credit card as well.