Credit Cards

Understanding Credit Cards' Minimum Spend Requirements

Get the Best Credit Cards in Singapore

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No matter how attractive a credit card's advertised rewards rates are, it's important to take a step back and look at its requirements before making a final decision. Minimum spend requirements have a large influence on the actual value of a credit card for individual consumers. This guide describes what a minimum requirement is, and how it should ultimately factor into credit card selection.

Table of Contents:

What is a Minimum Spend Requirement?

Most credit cards–and nearly all of those that offer cashback rewards–have a minimum spend requirement that consumers must reach before unlocking higher rates. In fact, it may not be readily apparent from a credit card's marketing materials, but most advertised rewards rates (5% rebate on groceries, for example) are not automatic. Cardholders typically must spend a set amount before they're awarded at these rates; if they fall short, they'll only earn a base rate of about 0.3%.

Minimum spend requirements also vary from credit card to credit card and from issuer to issuer, but usually range from S$500–S$2,000/month. In some cases, there are tiers of requirements, where cardholders can unlock a lower rate if they achieve a lower minimum spend, but can boost their rewards rate with higher monthly spending. Quarterly systems require consumers to maintain a minimum spend amount across 3 months to maximise earnings. Some cards, like UOB One, combine both of these features, offering different rates for different minimum spend amounts as well as requiring consistency across an entire quarter.

UOB One Card's Tiered Quarterly Rebate System

Low SpendMedium SpendHigh Spend
Monthly Minimum SpendS$500S$1,000S$2,000
Minimum Spend for QuarterS$1,500S$3,000S$6,000
Total RebateS$50S$100S$300
Rebate Rate3.33%3.33%5.00%
Cardholder must make 5 transactions per month for all 3 months within the quarter to be eligible for cash rebate

Impact of Minimum Spend Requirements on Rewards Earned

A consumer's ability to reliably meet their card's minimum spend requirement will greatly impact their monthly earnings. As mentioned, failing to reach a minimum requirement–even by just S$1–can result in a substantial decrease in rewards rate. The difference between a 5% rebate and a 0.3% rebate can add up quickly, and while there's a new chance to reach the minimum every month, consistent underspending can mean a loss of S$100s in rewards per year.

Example Impact of Falling Below Minimum Spend Requirement

DescriptionSpendCashback RateTotal Earned
Below Min. Spend RequirementS$4900.3%S$1.47
Meets Min. Spend RequirementS$5005.0%S$25.00
Minimum spend requirement and rewards rates displayed are based on Maybank Family & Friends MasterCard, with assumption that all spend is in rewards-eligible categories

There are a few things to keep in mind while aspiring to reach a minimum spend requirement. First, quarterly systems require consistency. Failing to meet a minimum requirement by even a few dollars in one month will dramatically decrease earnings across the entire quarter. Credit cards with these systems are best for people with stable budgets and consistent spending habits.

Another potential trap is timing of payments. Transactions are posted to the cardholder's account several days after a purchase is made. As a result, spend at the very end of the month may not count towards that month's minimum, and instead be attributed to the next month. In this case, failing to hit the minimum before the last week of a month may result in missing the requirement, therein earning just the base rate for all of that month's spend.

Comparing Cards With and Without Minimum Requirements

Not all credit cards have minimum spend requirements. In fact, nearly all miles-earning credit cards allow consumers to earn at advertised rates with their very first spend. Miles cards tend to have lower rates, however. Considering each mile has an approximate redemption rate of S$0.01, earning 1 mile per S$1 spend translates to about 1% rebate. Rebate credit cards with minimum spends of S$500+ tend to offer much higher cashback rates, ranging from 3.33% up to 10% or higher. In this light, even miles cards with higher rates, such as 3 miles per S$1 spend overseas, still offer less in terms of pure redemption value. (It's important to mention, however, that miles cards come with a myriad of other travel perks that offer extremely high value to frequent travellers).

Example Card Comparison by Min. Spend Req. (S$800 Spend, Overseas Dining)

Credit CardMin. Spend Req.Rewards RateCashback EquivalentEarnings
OCBC 365 CardS$8006.0% cashback6.0% cashbackS$48
Citi PremierMiles VisaN/A2.0 mi/S$12.0% cashbackS$15
SC Unlimited CashbackN/A1.5% cashback1.5% cashbackS$12
See credit card websites for more details on rewards rate structures and qualifications

Other credit cards with no minimum spend requirement are typically unlimited cashback options. These cards also offer lower rates however, typically ranging from 1%–2% rebate. Unlimited cashback cards are usually "flat," meaning all spend is rewarded (instead of just specific categories), and allow consumers to earn an unlimited amount of rewards (no earnings caps). Because of this low rate, no cap structure, unlimited cashback cards are best fit for the highest spenders.

How Minimum Requirements Factor in When Choosing a Card

Overall, while minimum spend requirements aren't always clearly displayed on credit card marketing materials, they're key drivers in determining a card's value for each individual. If a consumer cannot reliably achieve a credit card's minimum spend requirement, they'll likely forfeit a great deal of potential rewards. In this case, an individual should limit their search to cards with minimums they can comfortably achieve, rather than focusing on cards with the highest advertised rates. As best practice, consumers should always scan the fine print to check for the minimum requirement and determine whether it fits their monthly spending style.

Carrie Arndt

Carrie is a Senior Analyst at ValueChampion, specialising in credit cards in Singapore. She previously led consumer studies worldwide as a Senior Research Executive at MMR Research.

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