Cash Back vs. Cash Rebate vs. Air Miles: Rewards Explained

Credit cards in Singapore are much more than just a means of payment with a monthly bill. Each card category caters to distinct needs and offers exclusive benefits that may be more suitable for some users than others.

A rewards credit card, for instance, allows you to accumulate points at your preferred stores or with specific brands, making it an ideal choice for regular shoppers. On the other hand, airline credit cards are an excellent option for frequent flyers, enabling them to gather air miles that can be used to reduce the price of flight tickets. 

This guide will familiarize you with the primary distinctions among the various types of rewards cards in Singapore, ultimately assisting you in determining the most appropriate choice for your lifestyle.

Cashback vs. Cashback Rebates vs. Air Miles Credit Cards

Your expectations for credit card rewards will primarily guide you in deciding whether a cashback, cash rebate, or air miles card is best suited to your needs. Let’s delve into the typical uses of each card type and their respective rewards potential, overall value, eligibility criteria, and other aspects.

Cash Back Credit Cards – Best for People Who Want Cash Rewards

Cashback credit cards provide the chance to earn rewards on qualified purchases. These rewards are usually given as cash, based on a percentage of your expenditure. Alternatively, some cards might offer “reward points” instead.

Who Should Get a Cash Back Credit Card?

• People who want their rewards immediately and in cash.
• Singaporeans who have a low minimum monthly spend – as rewards will still be earned regardless.
• Users who enjoy immediate gratification.

Cashback Pros

• No annual fee to worry about.
• Straightforward cash rewards.
• Additional perks when shopping.
• Sign-up bonuses are common.

Cashback Cons

• Foreign currency spending usually incurs fees.
• Users with a low credit score could get high APR.
• Travel rewards are not common.

5 Best Cashback Credit Cards

Here are five top-notch cash back card options currently accessible in Singapore:

Cash Rebate Credit Cards – Best for Larger Discounts

As the name implies, cash rebate cards function somewhat differently than cash back credit cards. These cards offer a refund of a portion of the purchase price as a discount when you buy certain items. However, it’s worth noting that depending on your card issuer, these cards could also serve as traditional cash back cards.

Who Should Get a Cash Rebate Credit Card?

• Spenders who want more flexibility, free from expiry dates and loyalty programme T&Cs.
• Customers seeking hassle-free rebates and rewards.
• Low spenders who don’t want to spend a considerable amount of time racking up points.

Cash Rebate Pros

• Your cash rebates can essentially be used to purchase multiple items.
• Rebates will come directly into your credit card account.
• These cards offer minimum hassle.
• They’re great when purchasing large value items.

Cash Rebate Cons

• You might need to spend a minimum amount monthly to take full advantage.
• A cap on the total amount of rebates or rewards you can claim is likely to apply.
• You’ll need to always monitor what’s in your credit card account.

5 Best Cashback Rebate Credit Cards

The following tables provide a comparison of five of our top picks for cash rebate cards currently available.

Air Miles Credit Cards – Best for Frequent Travelers

Air miles credit cards allow you to accrue airline miles for every dollar you spend. You can redeem these miles with various airlines, such as Singapore Airlines and other leading carriers, depending on whether you’re using co-branded airline cards or more generic cards provided by high-ranking banks.

While air miles cards come in a wide variety of types, the fundamental idea remains the same – you spend money to accumulate miles.

Who Should Get an Air Miles Credit Card?

• Frequent travelers who want to accumulate sufficient miles for free or discounted travel.
• People who enjoy spending time in select hotels – as hotel points are usually offered, too.
• Anyone who wants to accumulate miles or redeem them for friends and family.

Air Miles Pros

• Air miles cards usually offer miles on both overseas and local spend.
• There aren’t usually any caps when you earn points.
• Additional travel rewards, like lounge access and insurance, are thrown in for frequent travelers.
• These cards are super-easy to use.

Air Miles Cons

• Miles will usually have an expiry date.
• Some airlines don’t have programmes for frequent travelers.
• Points are accumulated slowly when compared to other cards.

5 Best Air Miles Credit Cards

Let’s take a closer look at some of the very best air miles credit card options for people living in Singapore:

FAQs

1. Is It Better to Have Rewards Points or Cash Back With a Credit Card in Singapore?

This depends entirely on your personal preference. Rewards cards probably make the most sense if you frequently shop with the same stores or retailers, while cash back affords far superior flexibility to consumers who want to be able to spend their cash rebates or cash rewards however they please.

2. What’s the Difference Between Rewards Points, Airline Miles, and Cash Back Bonuses?

Rewards points are intangible points that can be redeemed for free flights, merchandise, or discounts with select retailers. Conversely, airline miles earned with miles cards are airline-specific points that can only be exchanged for air miles with participating carriers. Finally, cash back bonuses will award you a tangible fixed dollar amount for each eligible purchase you make with a cashback credit card.

3. What Kind of Credit Cards Rewards Are Best?

Again, this all boils down to your unique spending habits. Miles cards are the obvious choice for jet-setters, whereas a cashback credit card will make a lot more sense for regular spenders who just want to take advantage of more basic rewards. Generally speaking, you should look out for a rewards card that offers low annual fees or a one year annual fee waiver, as well as attractive interest rates and repayment terms.

4. Which Credit Card Has the Lowest Credit Card Bill Costs?

This will depend on numerous factors, such as the interest rate you are being charged, how much you spend each month and whether you’re using a cashback credit card, cash rebate card or air miles cards. We’d always recommend shopping around extensively to locate the best deals possible.

5. Can I Get a Free Flight When I Earn Miles with Credit Cards?

Ordinarily, there is no such thing as a free flight. That said, if you accumulate sufficient miles with the right miles cards, you may be able to redeem enough to cover a large portion of the distance that you intend on travelling with a select airline.

6. What Are the Three Main Types of Credit Card Rewards?

In simple terms, these are cash back, rewards points and air miles. What kind of rewards you are eligible to earn will depend on which type of credit card you are using and whether you are able to hit minimum spending thresholds with the right retailers, too.

7. Are Rewards Points Credit Cards Really Worth It?

This depends on several factors, including whether you are able to secure good annual fee costs and interest rates with the cards you are using. It’s important that your credit card balance doesn’t exceed the value of any rewards you accumulate each year, too.

8. Do I Need a Good Credit Score to Get a Credit Card?

You’ll almost always be subjected to a credit check when applying for a credit card in Singapore, though some banks and financial institutions are stricter than others when it comes to granting approval to customers with a lower credit rating.

9. What is the Minimum Annual Income I’ll Need to Get a Credit Card in Singapore?

Ordinarily, this sits at $30,000 for Singapore Citizens and Permanent Residents (PRs). If you are applying as a foreigner, however, there’s a fair chance you’ll need to be earning $45,000 or more.

10. What Alternatives to Credit Cards Should I Consider?

If you need to borrow money in Singapore, credit cards aren’t your only option. You can also look into personal loans or payday loans, which might sometimes be more appropriate to your unique circumstances.

See Also: How to Apply Credit Card in Singapore

Final Thoughts

With so many different kinds of credit cards available to borrowers in the city-state, it’s important to take a little time to familiarise yourself with how cash back, cash rebate and air miles cards work, and to compare the market widely to secure the best deal to suit you.

Don’t forget that

• Cashback cards are great for regular spenders seeking cash rewards, cash rebate cards are suitable for large purchases, and air miles cards are best for frequent flyers.
• A minimum income threshold, possibly higher for foreigners, is required to apply for a Singapore credit card.
• All credit cards have drawbacks: air miles may expire, cashback cards might have foreign transaction fees, and rebate cards can cap rewards. Consider these potential disadvantages.
• Online applications or using a bank’s app often yield sign-up rewards or bonuses.
• Market comparison is essential for finding a credit card that aligns with your unique financial situation.

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