Optimise your Credit Card Rewards
Do you know that on average, each person in Singapore holds 2 credit cards? Are you maximizing the benefits of each card or did you sign up for the welcome-bonus and left the cards sitting dormant at home? Before you sign up for more credit cards, check out these five tips for optimizing credit card rewards.
1. Understand your spending pattern
Credit card marketers target their clients depending on their lifestyle. Are you a frequent flyer, prestige seeker or shopaholic? Understanding where you spend most of your money can help you filter out the most suitable credit card for you. For example, if you take public transport everyday, then a card with incredible fuel savings may not make sense for you.
2. Do not spend just to earn rewards
While we know earning rebates and rewards is one of the greatest draws of using a credit card, it shouldn’t be a motivating factor for you to spend. Think of these rewards as bonuses you earn by spending what you already need to spend on so that they do not influence your spending patterns.
3. Be Smart About Redeeming Rewards
Go beneath the promotional taglines of credit card rewards to understand how the card issuer is going to payout their rewards. For instance, some frequent flyer cards require you to pay an administrative fee to convert the miles you earn to match the flyer programme of your choice. The rewards points you have accumulated from months of spending may also need to be substantial before you qualify for the minimum redemption amount for shopping vouchers.
More importantly, for those who choose a cashback card for its simple rebates terms must take note that most of these cards require a minimum spend per month. A good way to maximise your cashback rebates is to set up your monthly bill payments for your utilities and telephone bills to be paid by your credit card. It is a one-time administrative task you need to do but this ensures at least a few hundred dollars spend on your card per month.
4. Choose a card with no annual fees
It is an open secret that most banks waive the annual charges on your credit card if you have performed a minimum number of transaction per year(although this number is arbitrary). However, there are also some cards where issuers will never budge on waiving fees due to company policy. This usually applies to more prestigious cards. A useful way to find out is to read up on forums or ask those around you who are using the same card. Other wise, be sure that the savings or privileges provided the card outweigh the annual fee. With so many free cards around, why pay?
5. Always pay your bill in full
No one should sign up for a credit card just so that they are able to roll over their spending purchases. With all these annual fees and exorbitant interest charges, it is definitely not worth it, not to mention it cuts into any rewards earned. Not being able to pay your bill in full is also bad for your credit score and a sign that you are probably not the right candidate to sign up for a credit card in the first place.
If you’re interested in getting a new rewards credit card, or just interested to compare the best credit cards in Singapore, then have a look at our credit card comparisons.