Slay those credit card myths in Singapore
Here we go again – people knocking credit cards because they don’t know how they work. The myth we hear the most is to do with the one piece of advice we most often give to new card holders, and it’s this: “The banks don’t want you as a customer if you pay your card off in full every month”.
This claim is, frankly rubbish. The banks LOVE you as a customer if you pay off your balance in full every month. You’re proving to them that you’re a great customer who is less likely to be a bad debtor, and this gives you a better chance of applying – and receiving – better credit.
While the banks to not get the profits out of you that they would from somebody who leaves a balance on their cards every month, scraping free money from the customer through the means of interest charges, you’ve still got a vital role to play for them.
If you’re a regular user of your credit card, then the bank receives a fee from the merchant every time you swipe your card. Typically, the bank earns an operating fees from the vendor or around two to three per cent, and when they have millions of account holders using their cards every days these tiny percentages soon add up. So, even if you finish each month with a zero balance, you are still earning them money. Unless you never use your card at all, then they probably do hate you!
And while we’re here, let’s slay a myth about card bonuses. Who says they’re a one-off? According to the story, you can’t claim your signing-on bonus more than once. That’s patently untrue. The credit card market is so immensely competitive that they’ll do anything to keep you as a customer, particularly if you’re a high-spender on a premium account. They want to keep you from defecting to a different bank the second your bonus expires, so they may be willing to offer another one. Be cheeky – if you don’t ask, you don’t get. If they say no, our website is packed full of cards that might say otherwise.
The bottom line is this: Prove you’re a great customer, and the bank will go out of their way to reward your loyalty.
Article by Jason Taylor – [email protected]