Credit cards come with a host of capabilities and advantages – a good reason why credit cards are a popular phenomenon. If you are looking to apply for a credit card anytime soon, here are 10 things you undoubtedly require to know. These points will give you a far better understanding of how credit cards operate and what you can expect from them.
Annual charges on credit cards
All credit cards offered by banks (at least a big percentage of them), come with an annual charge. The annual charge mostly varies from one card to another, even in the case of cards presented by the identical bank. Normally, Premier cards that provide much better positive aspects than regular cards come with a larger annual fee.
When the Primary card pretty much surely comes with an annual charge, supplementary cards also come with an annual fee in most circumstances. Occasionally, the annual charge on the supplementary card is waived for the very first year or so – this is to hold the card more competitive and in-demand. Specific banks waive the annual charge on the key card as well – for the very first year, or very first two years, or longer.
Platinum Processing of interest
All transactions you make using your credit card attract a specific price of interest recognized as the annual percentage price of interest (APR). The interest rate is dependent on the bank that is supplying the card and the type of card. The interest price for most credit cards is Singapore is amongst 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 sort of card) and don’t charge an interest if the amount is repaid in full inside this interest totally free window. If the quantity is not paid before the end of the interest cost-free period, interest charges will accordingly hold applicable.
Money advance charges
Credit cards enable prospects to make emergency cash withdrawals from ATMs. These money advances carry a handling charge of about 5%-six% of the withdrawn amount, in addition to interest charges that fall in the variety involving 23% and 28% p.a. Interest on cash advances is computed on a everyday basis at a compounding rate till the quantity is repaid in full. Money advances are normally a risky phenomenon, mainly thinking about the higher interest charges. So if you withdraw money working with 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 expected to pay a minimum quantity every single month – or the entire quantity if that is possible – amounting to 3% of the total monthly outstanding balance. Minimum payments need to have to be made 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 consist of pending minimum payments from previous months, late payment charges, money advance charges, and overlimit fees, if they hold applicable.
Late payment charges
If the minimum quantity isn’t paid by the payment due date, banks levy a certain fee, generally referred to as the late payment fee. The late payment fee for credit cards in Singapore can be anyplace in the variety amongst S$40 and S$80, depending on the bank supplying the card.
Overlimit charges
Overlimit charges hold applicable and are levied by the bank if the allocated credit limit is exceeded. Overlimit charges can range amongst S$40 and S$60 for credit cards in Singapore.
Cashbacks and reward points
An aspect that tends to make credit-cards a fairly thrilling phenomenon is the reward points/cashbacks that can be earned on purchases. Unique cards are structured differently and permit you to earn either cashbacks or reward points or each, on your purchases. Some cards enable you to earn reward points on groceries, although some other let you earn cashbacks or reward points on air ticket bookings, retail purchases, etc. Cashbacks and reward points are attributes that are precise to specific credit cards and the extent of rewards depends on the variety of card and the bank supplying the particular card. Reward points earned on purchases can be converted into thrilling vouchers, discounts and desirable buying/retail obtain/on-line bargains from the card’s rewards catalogue.
Balance transfers
Particular credit cards permit 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 totally 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 fee and may possibly also charge an interest (unlikely in a majority of circumstances). Right after the interest cost-free period (6 months – 1 year depending on the card), regular interest charges on the card are applicable for transactions and cash advances.
Air miles programmes in Singapore
Particular credit cards (mostly premium credit cards) presented by some banks in Singapore enable you to earn air miles by converting your reward points earned on purchases working with the card. Generally, air miles cards come with a higher annual fee owing to their premium nature. As a buyer of a premium credit card, you can accumulate enough air mile points to totally offset your next holiday!
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