Credit cards feature a host of features and benefits – a good reason why bank cards are a favorite phenomenon. If you’re looking to apply for a bank card any time soon, listed below are 10 things you actually need to know. These points will provide you with an improved comprehension of how bank cards work and everything you can expect from them.
Annual fees on bank cards
All bank cards made available from banks (at least a major percentage of them), include an annual fee. The annual fee mostly varies from one card to a different, even in case of cards made available from the exact same bank. Usually, Premier cards that provide better benefits than normal cards feature a higher annual fee.
As the Primary card almost certainly comes with a annual fee, supplementary cards also include an annual fee generally in most cases. Sometimes, the annual fee on the supplementary card is waived for the initial couple of years – this is to keep the card more competitive and in-demand. Certain banks waive the annual fee on the primary card as well – for the initial year, or first couple of years, or longer.
Annual rate of interest
All transactions you make using your charge card attract a specific rate of interest called 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 many bank cards is Singapore is between 23% p.a. and 30% p.a.
Banks permit an interest free period around 21 days from the release of the statement (again, this is dependent upon the bank and the type of card) and don’t charge an interest if the amount is repaid entirely within this interest free window. If the amount isn’t paid before the conclusion of the interest free period, interest charges will accordingly hold applicable.
Cash advance charges
Credit cards enable customers to create emergency cash withdrawals from ATMs. These cash advances carry a handling charge around 5%-6% of the withdrawn amount, besides interest charges that fall in the number between 23% and 28% p.a. Interest on cash advances is computed on a regular basis at a compounding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 usually are a risky phenomenon, mostly taking into consideration the high interest charges. If you withdraw money using your charge card, it’s advisable that you repay the amount entirely at the earliest.
Minimum monthly payments
As a bank card customer, you’re required to pay for a minimum amount every month – or the entire amount if that’s possible – amounting to 3% of the total monthly outstanding balance. Minimum payments have to be created by the payment due date if late payment charges need to avoided. The minimum payment in your charge card monthly statement also can include pending minimum payments from previous months, late payment charges, cash advance charges, and overlimit fees, when they hold applicable.
Late payment charges
If the minimum amount isn’t paid by the payment due date, banks levy a specific fee, commonly called the late payment fee. The late payment fee for bank cards in Singapore could be anywhere in the number between S$40 and S$80, depending on the bank offering the card.
Overlimit fees
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 bank cards in Singapore.
Cashbacks and reward points
An aspect which makes credit-cards a pretty exciting phenomenon is the reward points/cashbacks that may be earned on purchases. 정보이용료 현금화 Different cards are structured differently and allow you to earn either cashbacks or reward points or both, on your purchases. Some cards allow you to earn reward points on groceries, though some other enable you to earn cashbacks or reward points on air ticket bookings, retail purchases, etc. Cashbacks and reward points are features which are specific to certain bank cards and the extent of benefits is dependent upon the type of card and the bank offering the particular card. Reward points earned on purchases could be changed into exciting vouchers, discounts and attractive shopping/retail purchase/online deals from the card’s rewards catalogue.
Balance transfers
Certain bank cards allow you to transfer your whole charge card balance to that particular charge card account, enabling one to consolidate your debt. Balance transfer bank cards include an interest free period of 6 months – 1 year, depending on the card you’ve applied for. In case of balance transfer cards, banks charge a processing fee and might also charge an interest (unlikely in a lot of cases). Following 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 bank cards (mostly premium credit cards) made available from some banks in Singapore allow you to earn air miles by converting your reward points earned on purchases utilizing the card. Usually, air miles cards feature a higher annual fee owing with their premium nature. As a customer of a premium charge card, you can accumulate enough air mile points to fully offset the next vacation!
Credit scores
In brief, your credit score is just a projection of how well you’ve managed your debt in the past. It takes into account your payment patterns and records instances of late payments, credit overlimits, loan defaults, history of regular/timely payments, etc, and gives banks a concept of how good you can be at handling debt in the future. A great credit score is imperative to getting loan applications and charge card applications approved.
The aforementioned mentioned points will come in handy if you are contemplating applying for a credit card. These aspects will provide you with a thorough comprehension of how bank cards work in Singapore, giving you an improved concept of everything you can expect. These will even work if you are unhappy along with your current card and are looking to switch over to a different charge card as well.