Should You Own a Credit Card in Singapore?
Applying for a credit card is a huge milestone. It is a significant moment that marks your transition to working life. If you are a first-time card seeker, be prepared to adjust your lifestyle. With a mound of responsibilities that come with owning a credit card, you might be doubtful if you should apply for one, but fret not - you will be glad to know that owning a credit card comes with many benefits. We have compiled a list of the five key benefits of getting a credit card.
5 Key Benefits of Owning a Credit Card in Singapore
1. Credit Cards Help Build Credit History for Loan Applications
You must be wondering, what do credit cards have to do with loan applications? Credit cards help boost your credit score by building your credit history. It is imperative that you have a good credit history. Why is it so? Before a bank decides to issue a loan to you, they will assess your creditworthiness. With a good credit history, you are more likely to get approval on your loan application. Additionally, you would probably get favourable interest rates too. If you want to buy a house and need a mortgage loan from the bank, a low-interest rate will work in your favour.
How do you ensure that you have a reliable credit history? Firstly, settle your credit card bills promptly and in full. Secondly, do your best to stay below your credit limit. Doing so reflects your credibility and financial soundness. It is telling of your creditworthiness and ability to repay debts.
2. Gives You More Access to Money
In Singapore, your credit limit depends on your annual income. Your credit limit is capped between two to four times your monthly income. For example, if you earn $5,000 a month, you can spend between $10,000 to $20,000 in a month. Even if you do not have money in your bank, you will still have access to funds. In emergencies, this benefit of a credit card comes in handy. For example, big-ticket household items like washing machines might suddenly break down. With a credit card, you can still replace your washing machine without having to cough up a large sum of money immediately.
However, we recommend you spend within your limit and only borrow an amount you can afford, as credit card interest rates are very high. On average, credit cards have a 25% interest rate in Singapore.
3. Simple Way to Keep Track of Your Spending
Find it difficult to keep track of your monthly expenses? Making payments with a credit card is an excellent way to track your spending, as you will get a detailed breakdown of your expenses on your credit card statement. You can also better understand your spending habits and monitor trends. Moreover, you can also use your credit card statement to track unauthorized purchases or dispute any transactions, which is an added safety feature.
4. Get Credit Card Sign Up Promotions and Bonuses
Still on the fence if you should apply for a credit card? You will be happy to know that many banks offer credit card sign-up promotions and bonuses. Incentives usually come in the form of free cash or expensive gifts. Typically, these credit card sign-up promotions come with a catch. For example, most offers require you to spend a sum of money within a stipulated time frame. You will only be rewarded with the credit card sign-up promotion when you have met the criteria. You also need to pay your bills on time and in full to avoid penalties on your spending. Based on our analysis, three credit cards for your consideration are - Standard Chartered Unlimited Cashback Card, Citi Cash Back Card, and Maybank Horizon Visa Signature Card. These three credit cards offer some of the best sign-up promotions and bonuses.
Best Sign-up Credit Cards Promotions 2022
1. Standard Chartered Unlimited Cashback Card
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If you spend S$7,000+/month, you’re likely going to feel restricted by cashback cards with earnings caps–this is why Standard Chartered Unlimited Cashback Card may very well be the best option for you. Cardholders earn 1.5% flat cashback with no rewards caps, which offers high spenders unlimited earning potential.
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If you spend S$7,000+/month, you’re likely going to feel restricted by cashback cards with earnings caps–this is why Standard Chartered Unlimited Cashback Card may very well be the best option for you. Cardholders earn 1.5% flat cashback with no rewards caps, which offers high spenders unlimited earning potential.
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2. Citi Cash Back Card
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Citi Cash Back Card is the best card on the market for average spenders because it rewards key categories–food and transport–with remarkably high rewards rates. Cardholders earn 8% cashback on dining, groceries, and petrol after S$800 minimum spend, with earning potential capped at S$80/month. This is quite a respectable earning potential, allowing consumers to earn up to S$900/year. While there’s a S$192.6 fee, it’s waived the 1st year and can easily be offset by these extra savings.
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Citi Cash Back Card is the best card on the market for average spenders because it rewards key categories–food and transport–with remarkably high rewards rates. Cardholders earn 8% cashback on dining, groceries, and petrol after S$800 minimum spend, with earning potential capped at S$80/month. This is quite a respectable earning potential, allowing consumers to earn up to S$900/year. While there’s a S$192.6 fee, it’s waived the 1st year and can easily be offset by these extra savings.
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3. Maybank Horizon Visa Signature
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Maybank Horizon Visa Signature Card is the best travel card for people with mostly local budgets, but who want to earn miles when they plan and go on vacations. Cardholders earn more for local spend than any other miles card on the market–3.2 miles per S$1 spend on dining, petrol, taxis and Grab, and hotel bookings with Agoda. However, consumers also earn at respectable rates on travel spend and overseas, at 2 miles per $1 spend on air tickets, travel packages and foreign currency transactions. While not a traditional travel card, Maybank Horizon Card even offers a few perks, like free travel insurance and airport lounge access.
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Maybank Horizon Visa Signature Card is the best travel card for people with mostly local budgets, but who want to earn miles when they plan and go on vacations. Cardholders earn more for local spend than any other miles card on the market–3.2 miles per S$1 spend on dining, petrol, taxis and Grab, and hotel bookings with Agoda. However, consumers also earn at respectable rates on travel spend and overseas, at 2 miles per $1 spend on air tickets, travel packages and foreign currency transactions. While not a traditional travel card, Maybank Horizon Card even offers a few perks, like free travel insurance and airport lounge access.
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5. You Can Get Attractive Credit Card Promos and Rewards
How does saving money as you spend sound? A huge benefit of credit cards is the promos and rewards that come with them. Wonder what type of rewards and promotions you can get from credit cards? Examples include cashback, dining perks, and frequent flyer miles.
Best Credit Card for Cashback: UOB One Credit Card
Wonder how cashback works? Every time you charge a payment to your credit card, you will earn a portion of your spending back in the form of cashback. For most credit cards, the cashback is credited to your statement, which would reduce your credit card bill. If not, cashback is sent directly to your bank account. Moreover, there are two types of cashback rates. They are flat cashback rates and cashback rates that change according to your monthly spending. One of the best credit cards for cashback is the UOB One credit card.
- Pros
- Good fit for budgets of at least S$2,000 per month
- Easy cashback on daily spend
- Gives rebates for paying bills
- Cons
- Doesn't fit inconsistent budgets
- Annual fee
If you consistently spend S$2,000/month, UOB One Card is the best card for maximising cashback on all spend. UOB One Card offers 5% general cashback, boosted to 6% on electric bills and 10% on Grab and select UOB Travel spend. Given the card's very high base rate, cardholders don’t need to track purchases by category (ie, dining) or merchant in order to rapidly earn rewards. Cardholders who spend at least S$2,000/month for 3 months earn an impressive S$300 for that quarter (equal to S$100/month); lower or inconsistent spenders, however, earn between S$50 to S$100/quarter.
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- Pros
- Good fit for budgets of at least S$2,000 per month
- Easy cashback on daily spend
- Gives rebates for paying bills
- Cons
- Doesn't fit inconsistent budgets
- Annual fee
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If you consistently spend S$2,000/month, UOB One Card is the best card for maximising cashback on all spend. UOB One Card offers 5% general cashback, boosted to 6% on electric bills and 10% on Grab and select UOB Travel spend. Given the card's very high base rate, cardholders don’t need to track purchases by category (ie, dining) or merchant in order to rapidly earn rewards. Cardholders who spend at least S$2,000/month for 3 months earn an impressive S$300 for that quarter (equal to S$100/month); lower or inconsistent spenders, however, earn between S$50 to S$100/quarter.
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Best Credit Card For Dining Rewards: OCBC 365 Card
If you are a foodie, you will be glad to know that many credit cards offer dining rewards. For example, some establishments offer special discounts if you pay with a certain bank's credit card. A credit card with one of the best dining rewards is the OCBC 365 credit card.
- Pros
- 6% rebate on dining, 3% on groceries, transport, utilities, online travel
- Fee waiver with S$10,000 annual spend
- Up to 22.1% fuel savings at Caltex, 20.2% at Esso
- Cons
- 0.3% rebate on general spend
- High S$800 minimum spend requirement
If having a single card to reward nearly all of your everyday spend at high rates sounds appealing to you, you should definitely consider OCBC 365 Card. Unlike its competitors, OCBC 365 Card does not limit rebates to select merchants in any category. Cardholders enjoy 6% rebates on dining & online food delivery, plus 3% on online & offline grocery purchases, land transport (including Grab, Go-Jek, ComfortDelGro and more) and online travel bookings. Another stand-out feature is 3% rebate on recurring electricity and telco bills with no category-specific cap. Alternatives offer only 1% rebate, capped as low as S$1/month.
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- Pros
- 6% rebate on dining, 3% on groceries, transport, utilities, online travel
- Fee waiver with S$10,000 annual spend
- Up to 22.1% fuel savings at Caltex, 20.2% at Esso
- Cons
- 0.3% rebate on general spend
- High S$800 minimum spend requirement
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If having a single card to reward nearly all of your everyday spend at high rates sounds appealing to you, you should definitely consider OCBC 365 Card. Unlike its competitors, OCBC 365 Card does not limit rebates to select merchants in any category. Cardholders enjoy 6% rebates on dining & online food delivery, plus 3% on online & offline grocery purchases, land transport (including Grab, Go-Jek, ComfortDelGro and more) and online travel bookings. Another stand-out feature is 3% rebate on recurring electricity and telco bills with no category-specific cap. Alternatives offer only 1% rebate, capped as low as S$1/month.
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Best Credit Card For Travel Miles: American Express Singapore Airlines Krisflyer Card
The announcement of the new Vaccinated-Travel-Lanes (VTL) is an indication that travel is resuming. If you want to earn rewards during your trips, you should use mile cards for your travel-related spending. You can also save money on your travel expenses. For example, you can use your accumulated miles for free hotel stays. Additionally, free limousine transfers and access to airport lounges are also exclusive perks that come with travel miles credit cards.
- Pros
- Easy-to-use miles card
- No conversions & transfer fees
- Great rewards with Singapore Airlines
- Cons
- Not easy to maximise miles
- Lacks airline/travel rewards aside from SIA
American Express Singapore Airlines KrisFlyer Card is a noteworthy option for miles card beginners. Spend directly earns KrisFlyer Miles, which are credited to the cardholder’s frequent flyer account–there are no conversions or transfer fees. In addition, while consumers earn 1.1 miles per S$1 spend (2 miles for overseas in June & December) they can earn 2 miles for spend on SingaporeAir, SilkAir, and KrisShop. These straightforward rates are complemented by perks like free travel insurance, Hertz rental car privileges and Amex Selects discounts and deals. While there’s a S$176.55 fee, it's waived 1-year. Ultimately, Amex SIA KF Card is a worthwhile option for Singapore Airlines flyers looking for a convenient miles.
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- Pros
- Easy-to-use miles card
- No conversions & transfer fees
- Great rewards with Singapore Airlines
- Cons
- Not easy to maximise miles
- Lacks airline/travel rewards aside from SIA
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American Express Singapore Airlines KrisFlyer Card is a noteworthy option for miles card beginners. Spend directly earns KrisFlyer Miles, which are credited to the cardholder’s frequent flyer account–there are no conversions or transfer fees. In addition, while consumers earn 1.1 miles per S$1 spend (2 miles for overseas in June & December) they can earn 2 miles for spend on SingaporeAir, SilkAir, and KrisShop. These straightforward rates are complemented by perks like free travel insurance, Hertz rental car privileges and Amex Selects discounts and deals. While there’s a S$176.55 fee, it's waived 1-year. Ultimately, Amex SIA KF Card is a worthwhile option for Singapore Airlines flyers looking for a convenient miles.
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General Criteria for Credit Card Application in Singapore
How do you apply for a credit card in Singapore? In Singapore, most banks require Singapore citizens and permanent residents below 35 years old to have a minimum annual income of S$18,000 and those between the ages of 35 and 55 must have a minimum annual income of S$30,000. On the other hand, foreigners are required to have a minimum annual income between S$40,000 and S$80,000, which is dependent on the bank.
| Financial Requirement | Documents Required | |
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| Adult citizens and permanent residents under age 35 | S$18,000 annual income | NRIC and proof of employment |
| Adult citizens and permanent residents age 35-55 |
| NRIC and proof of employment |
| Foreign nationals | S$40,000 to S$80,000 | |
| Students | none | NRIC and proof of school enrolment |
The Bottom Line
Have you changed your mind on whether to apply for a credit card? Not only are credit cards great for your financial well-being, but they also help you earn money through credit card promotions.jpg However, you should use credit cards responsibly to avoid unnecessary debt.
With the advancement of technology, application for a credit card is quick and easy. You can simply apply for a credit card online. Applications are usually processed within minutes, giving you your approval almost immediately. Ultimately, deciding whether to apply for a credit card depends on your financial ability to repay charges.
Boon Hun spent over five years in the content marketing space as the managing editor of Goody Feed creating interesting and relevant content for the social media generation. In 2022, he moved to the FinTech space while remaining true to his roots, intending to bring financial literacy to more people in Singapore. When not doing his work, he can be found watching people build homes on YouTube.