Why This Credit Card Myth is Costing Singaporeans Hundreds and Thousands of Dollars

Get the Best Credit Cards in Singapore

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If you are shopping around for a new credit card, you are probably starting out by asking what the best credit card in Singapore is. When you Google "best credit card in Singapore," you'll likely get a few results suggesting a few different cards. However, what you probably don't realise is that the concept of the "best" credit card is a myth, that there is no such thing as "the best credit card" for everyone. Unlike most consumer products like smartphones, there isn't one specific card that is the ultimate best credit card in the market. Instead, what would the best credit card for you depends heavily on your financial circumstances.

To put it another way, what you should be searching for is "which best credit card for me." Your choice of credit card should depend heavily on how much money you spend and what you tend to spend it on. Let us demonstrate how this works out with real life examples.

Why Your Spending Pattern Matters

What credit card you should choose should depend first on how much money you spend. For example, my friend Robert makes S$50,000 a year, and spends about S$2,000 on his UOB One Card on a monthly basis. UOB One Card is a great cashback card that provides up to 5% cash rebate for all of your expenditures, plus some other benefits like discounts on petrol. Based on Rob's spending level, this translates to about S$1,200 of cash rebate annually, which nets out to S$2,207.4 in rebate over 2 years after subtracting S$192.6 of annual fee (which is waived for 1 year). While this may seem great, one should wonder: what if Robert spends less money?

Because UOB One Card requires at least S$2,000 of monthly spend to qualify for the 5% rebate, anything less would only earn maximum 3.33% of flat rate cashback. This means that my other friend Henry, who only spends S$1,000 on his card every month, can only earn S$607.4 in net cash rebate over 2 years if he uses the UOB One Card. In this case, Henry may have been better off by using a card like OCBC 365 Card, which earns cash rebate and waives the annual fee for anyone who spends S$10,000 per year on the card. To be specific, OCBC 365 earns 24% on petrol, 3% on online shopping, up to 6% on dining and 3% on groceries, among other things.

Comparing UOB One Card and OCBC 365 Card's Total Benefits In Terms of Cashback Earned Net of Fees Over 2 Years for Monthly Spending Levels of S$2,000 and S$1,000
Comparing UOB One Card and OCBC 365 Card's Benefits

Let's now assume that my third friend Tom is a foodie who loves to eat well. However, he doesn't care that much about traveling, shopping or entertainment (i.e. bars, karaokes, etc.). Therefore, he spends about 60% of his monthly budget on dining and groceries, while Henry only spends 35% of his spending on these two categories. In this case, Tom should prefer to use Citi Cashback Card over using OCBC 365 Card, since Citi Cashback card earns 8% cash rebate on all of his dining and grocery bills.

Comparing OCBC 365 Card and Citi Cashback Card's Total Benefits In Terms of Cashback Earned Net of Fees Over 2 Years for Someone Who Spends S$1,000 per Month
Comparing OCBC 365 Card and Citi Cashback Card's Benefits

How You Redeem Your Benefits Matter: Miles vs Cashback

There are many other factors besides your spending patterns that you must consider before choosing the right credit card. For instance, you may want to go for an air miles credit card instead of a cash back carf if you tend to travel frequently. This is especially so for people who like to redeem their miles for business class or first class seats. Our study has shown that 1 mile can be worth up to S$0.08 for longer and more expensive flights, compared to S$0.01 conversion rate for economy flights.

Let's consider our example of Robert again, who spends about S$2,000 per month on his card. If he used a Citi PremierMiles Card, he could be earning about 110,920 of miles over 2 years, plus additional savings on petrol, according to our calculations. This is because Citi PMV card awards 1.2 miles for every S$1 you spend locally, 2 miles for S$1 you spend overseas, 15,000 miles for customers who use the card within the first 3 months, and another 10,000 miles when you pay the S$192.6 of annual fee to renew your card. It can also earn 14-15% discounts on petrol in Singapore. If you were to convert the 111,000 miles you earn at a S$0.03 to 1 mile rate (i.e. short-haul business class seat), that's worth significantly more than the cashback Robert would earn on UOB One Card even after subtracting the annual fees. On the other hand, if Rob used his miles at a S$0.01 per mile rate, or never redeemed his miles at all, then UOB One Card would be the better deal.

Comparing UOB One Card and OCBC 365 Card's Total Benefits In Terms of Cashback Earned Net of Fees Over 2 Years for Someone Who Spends S$1,000 per Month
Comparing UOB One Card and OCBC 365 Card's Benefits for Someone Who Spends S$2,000 per Month

Other Factors You Must Consider

Besides the factors we discussed above, there are other quantifiable qualities like annual fee waivers that are important. For instance, if you liked Citi PMV card but are hesitant to pay the hefty annual fee of S$192.6, then DBS Altitude Card could be a decent alternative option. Conversely, if you liked OCBC 365 card but are willing to pay a higher annual fee for better benefits, POSB Everyday card is a must consider.

Lastly, there are intangible benefits like free airport lounge access or complimentary travel insurance that you might find to be important. The value of these perks are very difficult to quantify, but that doesn't mean that they should be ignored when choosing a card. If you are like me and travel frequently for business, getting a short-break at the airport lounges can sometimes be a difference between life and death. However, cards that provide benefits often tend to come with a relatively high annual fee without waivers. This just the kind of tradeoff you get when you are choosing between Citi PremierMiles Card and DBS Altitude Card. Therefore, one must often choose between paying annual fees and forgoing additional perks that are valuable for some, but not everyone.


When looking for the "best credit card," it's extremely important to keep in mind how you spend your money and what kind of rewards you care about. As you can see from our calculations above, picking the right card given how you spend your money can result in significantly greater benefits over a period of few years. However, doing this can be rather complicated because there are over a hundred credit cards to choose from with seemingly incomparable characteristics. If you need further help in your card shopping process, our team at ValueChampion has painstakingly analyzed each and every card in the market to facilitate your search. You can check out our recommendations at ValueChampion's credit card analyses.

Duckju Kang

Duckju (DJ) is the founder and CEO of ValueChampion. He covers the financial services industry, consumer finance products, budgeting and investing. He previously worked at hedge funds such as Tiger Asia and Cadian Capital. He graduated from Yale University with a Bachelor of Arts degree in Economics with honors, Magna Cum Laude. His work has been featured on major international media such as CNBC, Bloomberg, CNN, the Straits Times, Today and more.

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