Credit cards come with a host of capabilities and positive aspects – a good purpose why credit cards are a well-liked 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 greater understanding of how credit cards work and what you can count on from them.
Annual fees on credit cards
All credit cards provided by banks (at least a main percentage of them), come with an annual charge. The annual fee largely varies from one particular card to a further, even in the case of cards offered by the exact same bank. Ordinarily, Premier cards that present far better positive aspects than typical cards come with a greater annual charge.
Though the Key card practically surely comes with an annual charge, supplementary cards also come with an annual fee in most instances. From time to time, the annual fee on the supplementary card is waived for the initial year or so – this is to preserve the card a lot more competitive and in-demand. Specific banks waive the annual charge on the principal card as effectively – for the initially year, or initial two years, or longer.
Annual rate of interest
All transactions you make employing your credit card attract a specific rate of interest known as the annual percentage price of interest (APR). The interest rate is dependent on the bank that is providing the card and the type of card. The interest price for most credit cards is Singapore is between 23% p.a. and 30% p.a.
Banks allow for an interest free of charge period of about 21 days from the release of the statement (again, this depends on the bank and the variety of card) and do not charge an interest if the amount is repaid in complete within this interest absolutely free window. If the quantity isn’t paid prior to the finish of the interest no cost period, interest charges will accordingly hold applicable.
Money advance charges
Credit cards enable clients to make emergency cash withdrawals from ATMs. These money advances carry a handling charge of about five%-6% of the withdrawn amount, apart from interest charges that fall in the range among 23% and 28% p.a. Interest on cash advances is computed on a every day basis at a compounding rate till the amount is repaid in full. Cash advances are usually a risky phenomenon, largely taking into consideration the high interest charges. So if you withdraw revenue employing your credit card, it is advisable that you repay the amount in complete at the earliest.
Minimum monthly payments
As a credit card client, you are needed to spend a minimum amount each month – or the complete amount if that’s feasible – amounting to three% of the total monthly outstanding balance. Minimum payments need to have to be produced 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 include pending minimum payments from earlier months, late payment charges, cash advance charges, and overlimit charges, if they hold applicable.
If the minimum amount isn’t paid by the payment due date, banks levy a specific fee, commonly referred to as the late payment fee. The late payment fee for credit cards in Singapore can be anywhere in the variety in between S$40 and S$80, based on the bank providing the card.
Overlimit charges
Overlimit costs hold applicable and are levied by the bank if the allocated credit limit is exceeded. Overlimit charges can range among S$40 and S$60 for credit cards in Singapore.
Cashbacks and reward points
An aspect that makes credit-cards a quite thrilling phenomenon is the reward points/cashbacks that can be earned on purchases. Various cards are structured differently and allow 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 forth. Cashbacks and reward points are functions that are distinct to certain credit cards and the extent of rewards depends on the type of card and the bank supplying the distinct card. Reward points earned on purchases can be converted into thrilling vouchers, discounts and eye-catching shopping/retail acquire/online deals from the card’s rewards catalogue.
Balance transfers
Specific credit cards allow you to transfer your entire credit card balance to that specific credit card account, enabling you to consolidate your debt. Balance transfer credit cards come with an interest free period of 6 months – 1 year, based on the card you have applied for. In the case of balance transfer cards, banks charge a processing charge and could also charge an interest (unlikely in a majority of cases). After the interest free period (6 months – 1 year based on the card), regular interest charges on the card are applicable for transactions and money advances.
Air miles programmes in Singapore
Particular credit cards (mainly premium credit cards) offered by some banks in Singapore allow you to earn air miles by converting your reward points earned on purchases using the card. Commonly, air miles cards come with a greater annual fee owing to their premium nature. As a buyer of a premium credit card, you can accumulate adequate air mile points to absolutely offset your next holiday!