Question 1

How do credit cards work?

Accepted Answer

Credit cards allow you to spend credit provided by the bank which you then have to repay. When you receive a credit card, your credit card limit is the maximum amount you have been approved for at the time of your application. This is highly dependent on your annual income. The great benefit of having a credit card is that, depending on the card itself, you can receive cashback on various purchases, discounts and perks on travel, dining, sports and other activities.

Question 2

How do you apply for a credit card in Singapore?

Accepted Answer

Depending on whether you are a student, an employed citizen or foreigner, the requirements you must meet to apply for a credit card vary. Typically, you are required to have a minimum annual salary of S$30,000, and to provide your payslips, most recent Tax Assessment and a copy of your NRIC. Read our guide to see specific details about these requirements.

Question 3

What is the best credit card in Singapore?

Accepted Answer

As our RealValue rewards calculator shows, the best credit card for each person will be different depending on where they spend money and what benefits they prefer. For example, the DBS Altitude Visa is a top pick for frequent travellers while the Citi Cashback excels at earning rewards on groceries and petrol.

Question 4

What is the difference between cashback, miles, and points?

Accepted Answer

Cashback: Cashback credit cards, also known as rebate cards, are named as such because they reward spend with cash credit equal to a given percentage of the transaction amount. For example, a credit card may offer 5% cashback on dining. Using that credit card to pay a S$100 restaurant bill will then earn S$5 in cash credit rewards. Cashback credits usually cannot be redeemed as actual cash. Instead, rebates are usually automatically applied to the next monthly card statement to offset the bill. Because of this automation, cashback cards are quite simple to use. This makes them a great choice for credit card beginners or those seeking an easy-to-use card for daily essentials.

Miles: Travel cards offer cardholders air miles for their purchases. Unlike cashback cards, rewards are usually differentiated by local vs. overseas spend, rather than by individual spend category (ie dining, transport, etc). Miles cards also typically offer higher rewards rates for purchases made in foreign currency. They also often offer luxury perks ranging from airport lounge access to free travel insurance, golfing privileges & more. For these reasons, travel cards are understandably popular with frequent travellers who can take advantage of miles rewards while enjoying luxury perks. Miles cards also rarely have minimum spend requirements or rewards earning caps, but they tend to have higher (and often non-waivable) annual fees.

Points: The most typical kind of points credit cards is shopper cards. In this case, a certain number of points are earned per S$1 spend. However, points are often represented in miles form instead. For example, if S$1 spend earns 10 points, but cardholders can redeem 10 points for 4 miles on the rewards platform, it's safe to say that spending S$1 earns 4 miles. Points can also be redeemed for other rewards such as cash vouchers, merchandise, or credit with select vendors. However, the value gained from redeeming points for such items is typically lower that the redemption rate for miles.

Question 5

How do I select the right credit card for me?

Accepted Answer

Selecting the right credit card depends both on spending behaviour & a few key factors. To begin with, nearly all credit cards have annual fees that can limit accessibility or diminish earnings. Travel credit cards tend to have higher annual fees, but some–alongside several rebate cards–offer condition-based fee-waivers. In these cases, a consumer can avoid paying the annual fee if they achieve a minimum spend by the end of the year (ie, waiver granted with S$12k annual spend). Many cards also waive the annual fee for the first 1-3 years after approval, making it easy to get started with the card upfront. Nonetheless, even if the annual fee seems achievable, it's possible to end up with a nett loss by the end of the year. In other words, if earnings from the credit card do not exceed the fee, you'll actually end up losing money. This is one reason it's important to pick a card that rewards your lifestyle. In addition to annual fees, minimum spend requirements are important to consider. Minimum spend requirements reflect how much a cardholder must spend in order to unlock higher rewards rates as advertised. For example, a card might require S$800 minimum spend for the month in order to earn a 8% rebate that month. Spending even S$1 less than the minimum may result in the cardholder earning at a base rate of just 0.2%–0.3%, which translates to a massive loss in earnings potential. It's incredibly important to review a card's minimum spend requirement before applying. If you can't reliably achieve the given amount, you won't be able to access meaningful rewards rates. Finally, make sure to review the overall rewards system structure. Choose a card that rewards categories you're most likely to spend on. Many cards cater to specific profiles (retail shoppers, travellers, everyday spenders & more) which can make selection a bit easier. It's essential to keep in mind that while high rewards rates can be very tempting, they won't prove beneficial unless you're likely to spend in the rewarded category. Considering these factors together can help you to find a credit card that will truly maximise earnings for your spend.

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