When Should You Pay?
Most credit card holders in Singapore would know the open-secret that if you spend a minimum sum on your credit cards every year, you will be able to bargain with the bank for a fee waiver. Banks like UOB even set up an automated phone banking system for customers to request for a fee waiver! So with so many “free” credit cards around, why are some of us still paying for these hefty fees?
Well, there are actually times where annual fees do make sense…
When The Card Comes With A Sign-Up Or Renewal Bonus
You’d find that most of the credit cards that earns you air miles in the market follow this model – pay for the annual fee and you’d automatically get a fixed number of air miles. Most of these cards, like the DBS Altitude, ANZ Travel Card or the Citibank PremierMiles come with annual fees that are around $200. What you can do to ensure that you are paying a fair amount is to simply calculate how much you are paying per mile. As an industry average, you shouldn’t be paying for more than 2.1 cents per mile.
What’s more, travel credit cards often offer more benefits compared to other types of cards where the bank may have to pay for the services. Think for instance, your free travel insurance (they are free for you but someone has to bear the cost, right?), and access to travel lounges or even free night stays at certain hotels.
When The Card Gives You A Huge Up-Front Benefit
You know those super high-end cards that are often “by-invite” only? Those cards, such as the AMEX Centurion and Citibank ULTIMA, with card fees in the 4-figure range? These cards are obviously not targeting the man on the street, not even those of a managerial level. You probably need to have some kind of special status and have a whole lot of money in the bank before you are invited for these cards. The truth is that for cards of this calibre that grant you free luxury hotel stay, personal butlers and the like, you can expect that perhaps card-holders voluntarily pay for them!
On a more common-man level, we have a few of such examples, such as AMEX’s Platinum Card card. The card’s annual fees are at $321, but you get a host of benefits and free memberships, such as the Far Card memberships (retailing at $425) which give you up to 50% off dining at exclusive hotels, as well as complimentary green fees.
Many cardholders in Singapore also know that American Express is notorious for not waiving their card fees most of the time (although there are few who reported they’ve successful waived them with certain cards). If you do notice, the AMEX Platinum card also comes with a special but often-overlooked benefit – fraud protection. In this day and age where most consumers do not hesitate before keying in their credit card details online, fraud protection is actually pretty important.
What Do I Do If I Don’t Get These Benefits and Am Still Charged a Fee?
Well, most people “threaten” to cancel their cards if banks do not waive the fees. Let’s just say that if you do love the card and its uses, what you can do is to request for a waiver if you are able to promise to spend a minimal amount in the next weeks. If not, there’s probably a reason why you are not using the card enough – it doesn’t suit your needs! So perhaps then it’s time to look for a card with a better fit for you.