Best Credit Card Guide
in Singapore

Credit cards allow you to make purchases now and pay later. It offers a revolving line of credit, meaning it has a credit limit that you can use to make purchases, balance transfers, and/or cash advances.

This is different from a typical bank loan wherein you can borrow large sums which you can pay long-term. A credit card, on the other hand, allows you to borrow smaller amounts that you’ll pay back at the end of your billing cycle.

To avoid penalty fees and interest, you are required to pay your monthly outstanding balance in full. You can use online banking and mobile banking applications to monitor your credit card expenses.

One of the attractive features of a credit card is its reward structure. Credit cards typically come with points accrual programs which you can exchange for gifts and rewards. For instance, you may be entitled to benefits, such as air miles, cashback, and rewards.

The biggest payment networks are VISA, MasterCard, and American Express. However, not all merchants accept all types.

In Singapore, you must be at least 18 years old to apply for a credit card in your name. If you are above 18 years old but below 21 years old, you can apply for student credit cards with a parent or guardian’s consent.

There are a wide variety of options when it comes to choosing a credit card. However, there are three most popular types of credit cards in Singapore.

• Air Miles Credit Cards: An air miles credit card allows you to earn air miles for every dollar you spend. You can use your accumulated miles to upgrade your seats or redeem free air tickets when you travel.
• Cashback Credit Cards: With a cashback card, you can earn a small percentage of the amount you’ve spent using the card. Use it to save on groceries, petrol, dining, travel, and more. You can redeem the accumulated cashback amount to offset your next purchase or bill cycle.
• Rewards Credit Cards: Every time you use a rewards card credit card, you earn rewards points. With your accumulated points, you can redeem products or vouchers from partner companies. Rewards programs differ per bank and each comes with its own points earning rate.

Note that cashback credit cards typically have a minimum spending requirement. If you fail to meet the minimum amount, you won’t get your cashbacks. If you aren’t a big spender, you can look for cashback cards with no minimum spend.

Visa and MasterCard as well as American Express are the 3 big global payment networks. This means they manage credit card transactions anywhere in the world. Visa and MasterCard are widely accepted globally – both online and offline. Best of all, both are easy and secure to use.

Let’s compare the two payment network’s key features and services:

• Card acceptance: Visa boasts a wider ATM network than MasterCard. However, both Visa and MasterCard offer worldwide access in more than 200 countries. Both also accept contactless payments.
• Consumer protection: Both Visa and MasterCard offer excellent consumer protection and add a layer of security to online transactions.
• Overseas use: Visa and MasterCard both charge a 1% fee when converting currencies and making overseas purchases. However, MasterCard offers a lower fee than Visa if you convert currency purchases locally in Singapore dollars. Additionally, if you buy in Singapore dollars overseas, MasterCard will also charge a lower fee.
• Benefits: Visa and MasterCard offer different benefits at premium tiers. However, the features and benefits offered will depend on the credit card provider. That said, look at specific details for each credit card.

When choosing a credit card, you must first determine what you’ll need the credit card for. Will you be using it for bills payment, online shopping, or travel spending?

That said, the best credit card for you will depend on your personal preferences, lifestyle, and spending habits. For instance, those who travel often may benefit more from a miles card because it offers air miles they can convert to free air tickets.

If you spend more on specific categories, such as grocery or dining, you can select a card that will help you maximize rewards for that category.

Lastly, pay attention to the fine details, including the annual fee and minimum spend required to enjoy the benefits of a card.

There are three options you can try to increase your credit limit:

• Temporary Credit Card Limit Increase: You can make a request online for a temporary credit card limit increase. This is especially useful for when you’re traveling or if you’re spending on a wedding. Make sure to pay off the bill before the credit limit increase expires or you’ll be charged with an overlimit fee.
• Apply for a Credit Limit Increase: If you want a permanent credit limit increase, then provide your card issuer proof that your income has increased. You’ll need to submit your latest income documents, such as payslips or CPF statements.
• Make Advance Payment: You can also increase your credit card limit by making advance payments on your credit card.

You will not incur any interest charges if you pay your credit card balance in full and on time.

Every month, you will receive a credit card statement where you will find a list of all your purchases during that credit cycle. On the statement, you will find your total outstanding balance as well as the minimum amount due for that month. If you pay the full amount, you will not incur interest charges.

However, if you only pay the minimum amount:

• You will be charged with interest fees daily for the outstanding amount
• Any interest that you fail to settle by the next payment schedule will also incur interest in the next statement.
• Interest will also be charged on any new purchases until you pay off your outstanding balance in full.

The average interest rate of credit cards in Singapore is around 25%

It usually takes between 10 to 14 days to process your credit card application upon receipt of all the required information and documents. Most banks will send you an SMS once the application has been processed. Once your application is approved, you will receive a letter enclosed with your credit card.