Credit cards come with a host of capabilities and added benefits – a excellent purpose why credit cards are a common phenomenon. If you are seeking to apply for a credit card anytime soon, right here are ten points you surely will need to know. These points will give you a much better understanding of how credit cards function and what you can count on from them.
Annual costs on credit cards
All credit cards supplied by banks (at least a key percentage of them), come with an annual charge. The annual fee mainly varies from 1 card to yet another, even in the case of cards supplied by the similar bank. Normally, Premier cards that offer improved benefits than normal cards come with a higher annual charge.
Even though the Key card just about definitely comes with an annual fee, supplementary cards also come with an annual charge in most cases. At times, the annual fee on the supplementary card is waived for the very first year or so – this is to maintain the card more competitive and in-demand. Particular banks waive the annual fee on the main card as properly – for the very first year, or 1st two years, or longer.
Annual price of interest
All transactions you make employing your credit card attract a particular price of interest identified as the annual percentage rate of interest (APR). The interest rate is dependent on the bank that’s providing the card and the sort of card. The interest rate for most credit cards is Singapore is among 23% p.a. and 30% p.a.
Banks allow for an interest no cost period of about 21 days from the release of the statement (once again, this depends on the bank and the sort of card) and never charge an interest if the quantity is repaid in complete inside this interest free of charge window. If the quantity isn’t paid ahead of the end of the interest free period, interest charges will accordingly hold applicable.
Money advance charges
Credit cards enable customers to make emergency cash withdrawals from ATMs. These money advances carry a handling charge of about 5%-6% of the withdrawn quantity, in addition to interest charges that fall in the range involving 23% and 28% p.a. Interest on cash advances is computed on a each day basis at a compounding rate till the quantity is repaid in full. Money advances are normally a risky phenomenon, mostly taking into consideration the higher interest charges. So if you withdraw income using your credit card, it is advisable that you repay the quantity in full at the earliest.
Minimum monthly payments
As a credit card client, you are expected to pay a minimum amount every single month – or the whole amount if that is feasible – amounting to three% of the total month-to-month outstanding balance. Minimum payments have 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 things like pending minimum payments from preceding 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 particular fee, commonly referred to as the late payment charge. The late payment charge for credit cards in Singapore can be anyplace in the range between S$40 and S$80, depending 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 charges can variety 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 thrilling phenomenon is the reward points/cashbacks that can be earned on purchases. Distinctive cards are structured differently and allow you to earn either cashbacks or reward points or both, on your purchases. Some cards allow you to earn reward points on groceries, even though some other let you earn cashbacks or reward points on air ticket bookings, retail purchases, etc. Cashbacks and reward points are capabilities that are certain to specific credit cards and the extent of rewards depends on the kind of card and the bank offering the distinct card. Reward points earned on purchases can be converted into fascinating vouchers, discounts and desirable shopping/retail purchase/on the net bargains from the card’s rewards catalogue.
Balance transfers
Particular credit cards enable you to transfer your whole credit card balance to that distinct credit card account, enabling you to consolidate your debt. Unicc Shop come with an interest free of charge period of 6 months – 1 year, based on the card you’ve applied for. In the case of balance transfer cards, banks charge a processing fee and might also charge an interest (unlikely in a majority of instances). Right after the interest free of charge period (6 months – 1 year based on the card), standard interest charges on the card are applicable for transactions and cash advances.
Air miles programmes in Singapore
Certain credit cards (mainly premium credit cards) supplied by some banks in Singapore allow you to earn air miles by converting your reward points earned on purchases using the card. Usually, air miles cards come with a higher annual fee owing to their premium nature. As a consumer of a premium credit card, you can accumulate enough air mile points to entirely offset your subsequent holiday!