Credit cards feature a host of features and benefits – a good reason why bank cards are a favorite phenomenon. If you’re looking to apply for a bank card anytime soon, listed here are 10 things you definitely need certainly to know. These points will provide you with a much better understanding of how bank cards work and what you can get from them.
Annual fees on bank cards
All bank cards made available from banks (at least an important percentage of them), come with an annual fee. The annual fee mostly varies from card to a different, even in the case of cards made available from the exact same bank. Usually, Premier cards offering better benefits than normal cards feature a higher annual fee.
Whilst the Primary card most likely comes with an annual fee, supplementary cards also come with an annual fee in many cases. Sometimes, the annual fee on the supplementary card is waived for the initial year or so – this is to help keep the card more competitive and in-demand. Certain banks waive the annual fee on the primary card as well – for the initial year, or first two years, or longer.
Annual rate of interest
All transactions you make using your credit card attract a particular rate of interest known as the annual percentage rate of interest (APR). The interest rate is determined by the lender that’s offering the card and the kind of card. The interest rate for most bank cards is Singapore is between 23% p.a. and 30% p.a.
Banks enable an interest free period of about 21 days from the release of the statement (again, this depends on the lender and the kind of card) and don’t charge an interest if the amount is repaid in full in this interest free window. If the amount isn’t paid before the end of the interest free period, interest charges will accordingly hold applicable.
Cash advance charges
Credit cards enable customers to make emergency cash withdrawals from ATMs. These cash advances carry a handling charge of about 5%-6% of the withdrawn amount, besides interest charges that fall in the number between 23% and 28% p.a. Interest on cash advances is computed on a regular basis at a compounding rate until the amount is repaid in full. Cash advances are often a risky phenomenon, mostly considering the high interest charges. So if you withdraw money using your credit card, it is advisable that you repay the amount in full at the earliest.
Minimum monthly payments
As a bank card customer, you are required to pay for the absolute minimum amount every month – or the entire amount if that’s possible – amounting to 3% of the sum total monthly outstanding balance. Minimum payments must be created by the payment deadline if late payment charges need certainly to avoided. The minimum payment in your credit card monthly statement may also include pending minimum payments from previous months, late payment charges, cash advance charges, and overlimit fees, if they hold applicable.
Late payment charges
If the minimum amount isn’t paid by the payment deadline, banks levy a particular fee, commonly known as the late payment fee. The late payment fee for bank cards in Singapore could be anywhere in the number between S$40 and S$80, depending on the bank offering the card.
Overlimit fees hold applicable and are levied by the lender if the allocated credit limit is exceeded. Overlimit fees can range between S$40 and S$60 for bank cards in Singapore.
Cashbacks and reward points
An aspect which makes credit-cards quite a exciting phenomenon could be the reward points/cashbacks which can be earned on purchases. 신용카드 현금화 Different cards are structured differently and permit you to earn either cashbacks or reward points or both, in your purchases. Some cards permit you to earn reward points on groceries, while some other enable you to earn cashbacks or reward points on air ticket bookings, retail purchases, etc. Cashbacks and reward points are features which are specific to certain bank cards and the extent of benefits depends on the kind of card and the lender offering the specific card. Reward points earned on purchases could be changed into exciting vouchers, discounts and attractive shopping/retail purchase/online deals from the card’s rewards catalogue.
Certain bank cards permit you to transfer your entire credit card balance to that one credit card account, enabling one to consolidate your debt. Balance transfer bank cards come with an interest free period of 6 months – 1 year, depending on the card you’ve applied for. In the case of balance transfer cards, banks charge a processing fee and may also charge an interest (unlikely in a lot of cases). After the interest free period (6 months – 1 year depending on the card), normal interest charges on the card are applicable for transactions and cash advances.
Air miles programmes in Singapore
Certain bank cards (mostly premium credit cards) made available from some banks in Singapore permit you to earn air miles by converting your reward points earned on purchases utilizing the card. Usually, air miles cards feature a higher annual fee owing with their premium nature. As an individual of reduced credit card, you are able to accumulate enough air mile points to completely offset your next vacation!
In brief, your credit score is a projection of how well you’ve managed your debt in the past. It takes into account your payment patterns and records instances of late payments, credit overlimits, loan defaults, history of regular/timely payments, etc, and gives banks a concept of how good you may be at handling debt in the future. A good credit score is crucial to getting loan applications and credit card applications approved.
The above mentioned points comes into play handy if you should be contemplating applying for a credit card. These aspects will provide you with an extensive understanding of how bank cards work in Singapore, providing you a much better concept of what you can expect. These will also work if you should be unhappy together with your current card and are looking to modify over to a different credit card as well.