Bank cards feature a host of features and benefits – a good reason why credit cards are a popular phenomenon. If you are looking to apply for a charge card any time soon, listed below are 10 things you definitely need certainly to know. These points will provide you with a better knowledge of how credit cards work and what you can get from them.
Annual fees on credit cards
All credit cards provided by banks (at least a significant percentage of them), come with an annual fee. The annual fee mostly varies from one card to some other, even in case of cards provided by the exact same bank. Usually, Premier cards that offer better benefits than normal cards feature a higher annual fee.
While the Primary card probably comes with a 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 couple of years – that is to help keep the card more competitive and in-demand. Certain banks waive the annual fee on the principal card as well – for the initial year, or first 2 yrs, or longer.
Annual rate of interest
All transactions you make using your charge card attract a certain rate of interest known as the annual percentage rate of interest (APR). The interest rate is influenced by the bank that’s offering the card and the type of card. The interest rate for most credit cards is Singapore is between 23% p.a. and 30% p.a.
Banks allow for a pastime free period of about 21 days from the release of the statement (again, this depends on the bank and the type of card) and don’t charge a pastime if the amount is repaid in full within this interest free window. If the amount isn’t paid before the finish of the interest free period, interest charges will accordingly hold applicable.
Cash advance charges
Bank cards enable customers to create 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 These cash advances carry a handling charge of about 5%-6% of the withdrawn amount, besides interest charges that fall in the number between 23% and 28% p.a. Interest on cash advances is computed on a regular basis at a compounding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 before amount is repaid in full. Cash advances are usually a risky phenomenon, mostly taking into consideration the high interest charges. If you withdraw money using your charge card, it is advisable that you repay the amount in full at the earliest.
Minimum monthly payments
As a charge card customer, you’re required to pay for the absolute minimum amount every month – or the entire amount if that’s possible – amounting to 3% of the full total monthly outstanding balance. Minimum payments have to be created by the payment deadline if late payment charges have to avoided. The minimum payment in your charge card monthly statement can also include pending minimum payments from previous months, late payment charges, cash advance charges, and overlimit fees, should they hold applicable.
Late payment charges
If the minimum amount isn’t paid by the payment deadline, banks levy a certain fee, commonly known as the late payment fee. The late payment fee for credit cards in Singapore may 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 bank if the allocated credit limit is exceeded. Overlimit fees can range between S$40 and S$60 for credit cards in Singapore.
Cashbacks and reward points
An aspect which makes credit-cards quite a exciting phenomenon is the reward points/cashbacks which can be earned on purchases. 신용카드 현금화 Different cards are structured differently and allow you to earn either cashbacks or reward points or both, on your own purchases. Some cards allow 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 can be specific to certain credit cards and the extent of benefits depends on the type of card and the bank offering the particular card. Reward points earned on purchases may be converted into exciting vouchers, discounts and attractive shopping/retail purchase/online deals from the card’s rewards catalogue.
Certain credit cards allow you to transfer your whole charge card balance to that specific charge card account, enabling you to consolidate your debt. Balance transfer credit 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 might also charge a pastime (unlikely in a majority 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 credit cards (mostly premium credit cards) provided by some banks in Singapore allow you to earn air miles by converting your reward points earned on purchases using the card. Usually, air miles cards feature a higher annual fee owing for their premium nature. As a customer of a premium charge card, you are able to accumulate enough air mile points to fully offset your following vacation!
In brief, your credit score is just a projection of how well you’ve managed your debt in the past. It will take into consideration your payment patterns and records instances of late payments, credit overlimits, loan defaults, history of regular/timely payments, etc, and gives banks a notion of how good you can be at handling debt in the future. A great credit score is vital to getting loan applications and charge card applications approved.
The aforementioned mentioned points comes into play handy if you should be contemplating applying for a credit card. These aspects will provide you with an extensive knowledge of how credit cards work in Singapore, giving you a better notion of what you can expect. These may also work if you should be not happy with your current card and are looking to change over to some other charge card as well.