Optimise Your Credit Card Usage With These Features
When Singaporeans sign up for a credit card, most of them have a specific reason in mind – perhaps it was the attractive sign-up gifts and offer, or you really wanted an air-miles card to help you redeem air tickets while you spend. Whatever it is, we can be sure that credit cards are here to stay, especially with the increasing growth of e-commerce and m-commerce.
Besides giving cardholders discounts with partner merchants, providing a convenient payment option, as well as using them to earn reward points and cash rebates, do you know that the little piece of plastic has some other neglected features that can be useful for you? Let us take a look at some of these unique features credit cards here in Singapore have that might be helpful for you in managing your finances:
Free Travel Insurance Coverage
This is a cool feature that is offered mainly with travel credit cards that gives you air miles when you spend. After all, it’s a complementary product and some customers may forget about this useful feature that can be a great blessing in times of trouble. For most cards, you’d need to pay for your air tickets with the said credit card before you can activate the free travel insurance feature. Some cards even provide coverage for your spouse and child who is travelling with you as well! This is a great way to get insurance coverage and also saves you the hassle of looking for your own travel insurance.
Some credit cards that provide this feature includes the ANZ Travel Visa Signature Credit card and the AMEX KrisFlyer Credit Card.
0% Interest Payment Plans (IPP)
The main difference between using a credit card and a debit card is that the former is essentially a 30-day interest-free loan from the bank for you to pay for a purchase in advance. Imagine the scenario where you would like to pay for a spa package that cost you $5,000 for 2 years but not pay it all at once. You can now use a credit card for instalment payments at no cost!
This feature is especially useful when you want to pay for big ticket items so that you can better manage your cash flow – furniture, home appliances and expensive electronic gadgets are some common items that you can use with 0% interest payment plans(IPP). Do however note that the amount you need to pay each month will eat into your monthly credit limit though.
The balance transfer feature is not very well publicised but it can be a very useful tool to help in debt consolidation. For instance, you may have used 2 of your credit cards for a large payment and are paying them month by month with what you can afford. Balance transfer allows you to transfer the outstanding balances you have from these two credit cards to a third one, albeit at a much lower interest rate. The use of balance transfer is thus useful when one is looking to clear a credit card debt at 26% pa interest rate since you will be able to qualify for lower interest rates with a small upfront fee.
Ever find yourself in a situation where you are overseas and can’t find a money changer? Here’s where your credit card can help you. Cash advance services allow you to draw cash from the ATM with your credit card is essentially a loan by the bank to you. When you withdraw cash using your credit card, you are essentially “borrowing” money from the bank and thus, will incur a higher fee compared to using a debit card in your home country. Do not mistake this for a debit card which is tied to your savings account in the bank. The downside is that it is one of the most expensive way to “borrow” as Interest are charged on a daily basis and there is an upfront transaction fee as well.