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Smartest and Dumbest Ways to Use Credit Cards

Here’s the truth: whether you like it or not, we are living a life that has been accustomed to using credit cards. They seem to be rampant everywhere. There are even some places that only take payments via credit or debit cards. And it is also a given fact that most of us have at least one credit card in our wallets.

But take note that accessing credit cards is not a right but a privilege. If you make mistakes, you might just end up in a sea of debt that you’ll find very hard to clear.

With the advent of credit cards comes the dumbest and smartest ways to use it. Here’s a quick list of the dumbest moves that will surely leave you with a lot of credit debt.

Making late payments

Never mistake a due date as a guideline. It is your responsibility to execute timely payments for your credit use. Remember that although there are rules that must be followed, credit card issuers remain to have the right to raise rates when it comes to late payments. When you pay late, the following will apply to you:

You will be obliged to pay a late fee, and
Higher interest rates may apply to your future purchases. In some cases there may be an interest rate adjustment, but this is not an absolute fact.

Paying minimum for your credit card use

If you are paying the minimum in your credit debt now and then, it’s not actually a big deal, but it won’t be good at all anymore if you make it a habit. Paying only the minimum can dramatically increase your credit debt.

Abusing credit card cash advances

While there may be emergencies where your only option is to take cash advances, always remember that it is not a cheap deal. In general, licensed moneylenders can be a quick fix for your financial needs but it can incur up to 48% interest per annum. You can consider a personal loan before considering cash advance. There are several free personal loan calculators that can help you assess which will help you save more.

If there are dumb ways to use your credit cards, there are also considerably smart ways to utilise them. Credit cards offer valuable rewards when utilised properly. Here are the smartest ways you can utilise your credit card.

Earn credit rewards for spending

When you use rewards credit cards, it can earn valuable points, air miles and even cashback for up to 6% of your purchases. This might be a meager amount but some card holders earn a few hundred dollars with cashback rewards on a yearly basis. The best cashback credit cards in Singapore are usually just within reach.

Credit cards as a payment method

Paying your credit card statements within the grace period will help you avoid credit charges. When your credit cards are used as a payment method, it will allow you to enjoy a handful of benefits at no cost to you.

As your protection from devious merchants

When the merchant fails to deliver the services or items you have purchased, you can get help from your credit card provider during this dispute. If your credit card provider can verify your claim and block your payment, you just might be able to get your money back. However, keep in mind that this is only applicable with certain products. Always check the terms and conditions before applying for a credit card.

As a way to build your credit

Building your credit score is the best way you can do to qualify for the most affordable rates when doing big purchases. Observing how your credit card score affects your chances of getting a loan approval. If your credit score is bad, you don’t get approval on a loan. At most you will get a higher loan quantum with a good credit score. The best way still to improve your credit score is to get a personal instalment loan and pay it back consistently.

(This article is brought to you by SingSaver.)

How rewards could be the cash card for the financial services industry

Loyalty That Counts

James Berry, e-Commerce Director from Collinson Latitude explains how for banks and credit card providers, it’s time to make rewards add up, or risk losing out.

Consumers are keener than ever to shop around for a good deal when it comes to their finances, you just need to look at the rise of personal finance sites like Money Digest to see that. Armed with smartphones and 4G, they compare everything from the cheapest travel insurance to the best credit card rate, and are not afraid to do their research in order to get the best return for their hard earned cash.

In a new report, ‘Taking Account: The consumer perspective on loyalty programmes in financial services’ it was highlighted that nearly two thirds (63%) of consumers globally are now swayed by rewards on offer when choosing a new bank and credit card. In Singapore, stronger sentiments are expressed with nearly three quarters (73%) indicating that rewards have an influence on their choices, exceeding that of the global average. This actually ranked rewards on offer above customer reviews and almost on a par with brand reputation in terms of their sway in consumers’ decision making process.

But, it seems the financial service (FS) providers are playing catch-up when it comes to customer satisfaction. Many remain lulled by the false sense of security created by years of stable loyalty, as only 1 in 10 Singapore consumers said their rewards programme offers an excellent service.

The fact is the rules of engagement are changing.

Making Rewards Add Up

So we know loyalty programmes have a significant impact on consumers purchasing decisions when choosing a new bank or credit card, and that a positive rewards experience can evoke loyalty – but if it was that easy wouldn’t everyone be doing it?

The simple answer is yes, but it’s not that simple. Availability of a programme is one thing, matching it with increasingly high customer expectations is quite another.

Consumers today expect rewards that are suited to them and their lifestyle. Over eight in ten of respondents globally said that their reward programme would be better if it offered more choice and allowed them to choose the categories of reward they wanted. The point is, customers have come to expect value, flexibility and choice when it comes to rewards. With more than one in two preferring to engage with their programme online, offering a single channel package will no longer suffice. Using customer data to pinpoint their preferred touch-points and fitting the redemption process around these will encourage conversion, beneficial to customer and financial providers alike.

Cashing In On Loyalty

Unfortunately many companies in the FS industry continue to look towards reward programmes as an ‘add on’ rather than as an integrated part of their business offering; this undoubtedly has a knock on effect for customer satisfaction.

What’s important for programme managers and marketing professionals in the sector to realise is that consumer expectations have changed; they expect to be rewarded for their custom 24 hours a day, 7 days a week, on the device of their choice. Banks and credit providers need to start investing in more personalised reward programmes that offer consumers greater choice and accessibility.

In an era where online banking, live chats, mobile banking and remote account management are considered a necessity rather than a value add for ‘connected customers’ – rewards and incentives are helping differentiate providers. In fact, around three quarters said they would like better access to rewards online and the ability to redeem their rewards more easily.

The Forecast for Loyalty in Financial Services

Over the past ten years and during the midst of a world-wide economic crisis, the financial services industry had a shake-up – one that has thrown up new ways of doing things and ultimately changing the way consumers interact with them. So far, many have managed to keep hold of their customer base, but how many of that base have already taken a loan or a credit card with another provider?

It’s hard to say, but what is clear is that with smartphones in their pockets and information at their fingertips, it’s easier than ever for your customers to look elsewhere. And when they do, a decent reward programme will be towards the top of their priority list.

If you’re unsure how to go about ensuring your reward programme meets these needs our tops tips below are a good place to start:

Best Credit Cards For Frequent Flyers

Visualize beautiful and serene sandy beaches of Boracay, Philippines or the bountiful shopping escapades in New York City, USA. Your everyday spending using your frequent flyer or air mileage credit card can turn your dreams into reality. Bringing the world closer to you, here are the best credit cards in Singapore that you shall consider:

4. DBS ALTITUDE AMERICAN EXPRESS CARD

DBS Altitude American Express Card offers rewards for air mileage and dinner deals. Dinner deals include discounts at over 1, 000 places nationwide with the DBS Indulge program. For example, cardholders get 1-for-1 Buffet Dinner at Hotel Jen Singapore.

With a fee of S$180 every year (waived for 1 year), and a minimum annual income of S$80, 000 for Singaporean, PR, and Foreigners, you can earn 3 miles for every dollar spent on online flight and hotel transactions. Earn 2 miles for every dollar spent overseas and 1.2 miles for every dollar spent locally. The best thing about this is that your accumulated miles will never expire! Use it at your convenience.

3. ANZ TRAVEL VISA SIGNATURE CARD

ANZ Travel Visa Signature Credit Card’s minimum annual income eligibility for Singaporeans/PR is S$60, 000 while its S$90, 000 for Foreigners. With ANZ Travel Visa Signature, you may indulge on the complimentary access to airport limousine at departure or to airport lounges around the world. Earn 2.8 miles per S$1 spent on direct flight booking with Qantas and Jetstar airlines and 1.4 miles per S$1 for local spending. Aside from giving you rewards on air mileage, this card lets you convert your Travel$ to Cash Credit. The annual fee of S$200 is waived for a year.

2. CITI PREMIERMILES CARD

I cannot begin to enumerate the wide selection of rewards, Citi PremierMiles Card can gives to its faithful cardholders. You earn 2 Citi Miles for every dollar spent overseas and 1.2 Citi Miles for every dollar spent locally. These miles are redeemable in 70 airlines worldwide!

By signing on to S$193 fee a year (waived in the first year) and a minimum annual income of S$60, 000 for Singaporean, PR, and Foreigners, you are entitled to not just milage rewards but also dining and petrol deals. Enjoy up to 14% discount at Esso stations and 13.6% discount at Shell stations. Exclusive dining deals to Wooloomooloo Steakhouse, Yan Ting, LaBrezza, Tiffin Room, Long Bar Steakhouse, Bar & Billiard Room and more, are courtesy of Citi Gourmet Pleasures. What’s more? REceive 10, 000 Citi Miles upon annual membership renewal and round-trip ticket to Bali on Singapore Airlines with S$12, 500 (15, 000 miles) spending.

1. AMERICAN EXPRESS SINGAPORE AIRLINES KRISFLYER GOLD CREDIT CARD

With the lowest minimum annual income eligibility among these 4 cards…American Express Singapore Airlines KrisFlyer Gold Credit Card requires S$30, 000 annual income for Singaporean/PR and S$60, 000 for Foreigners. Enjoy 1 KrisFlyer mile for every S$1.60 spent. Earn 50% more KrisFlyer miles when you charge S$5, 000 or more to your card in a year and 50% additional KrisFlyer bonus miles for a minimum spend of S$12, 000 in a year. Not only is the first year waived but you also get a welcome bonus of KrisFlyer miles.

Worry not about the accumulation process since miles are credited directly to your KrisFlyer account.

Read Also: Best Credit Cards for Travel

4 Ways to Boost Your Travel Fund

How can you pay for trips if your budget is too tight? Certainly, saving for travel money is not an easy task, which is why a sparkle of effort is needed to turn your dreams into reality.

Here are 4 Ways to Boost Your Travel Fund…

1. SELL YOUR UNWANTED OR UNUSED ITEMS ONLINE

Anything that is still in good condition and has a credible brand name will be flocked over by buyers. Even your old furniture can be sold in online sites such as Carousell and Gumtree. Nonetheless, you can always sell your precious items to your close family and friends through a Facebook group.

Rules on selling include: be honest with the product’s flaws, have a simple and accurate description, and charge right for postage.

The popular and safe websites (or mobile apps) for selling are:

a. eBay
b. Gumtree
c. Carousell
d. Facebook

2. INDULGE ON AIR MILEAGE CREDIT CARDS

Some companies such as Citibank or Virgin offer a significant amount of air miles every time you purchase. Once you have an air mileage credit card and use it abundantly (within your needs), you may even book your flight for free!

Image Credits: William Cho via Flickr

3. CONTROL YOUR UNNECESSARY BUYING INSTINCTS

Stop buying useless things that you do not need. Rethink if buying overpriced coffee rather than making your own coffee at work saves you more. Instead of buying lunch, pack your own lunch for at least 2 months. It will not only save more money, but it will reduce waste. It may seem simple, but these unnecessary expenses add up.

4. BE PATIENT

If you need to purchase something for your trip, wait for sale to come around or buy the last season’s model. When selling your items, you must be okay to accept an item price for less. You must practice the virtue of patience, as you wait for the right time before you may be able to travel.

Best Credit Card For Petrol

When your car ran out of petrol, have you had problems deciding which petrol kiosks to go to enjoy the most savings? With four petroleum companies in Singapore – Exxon-Mobil, Caltex, Shell and Singapore Petroleum Company, you may at times scratch your head and wonder which petrol companies offer the cheapest petrol.

Owning and driving a car in Singapore is expensive, and it pays to find out how to save on your fuel expenses.

Using the right credit card to make your fuel purchase is important, as you could easily shave off up to one fifth of your petrol costs. The savings is huge! Imagine spending $2,000 on a petrol in a year – you could have saved up to $400 in a year!

There are many credit cards for petrol in the market and while some offer instant site and card discount, there are also cards that offer rebates and rewards to sweeten up the deal.

So which is the best card? Let’s find out! (Scroll to the bottom to see summary)

Esso

DBS Black VISA/AMEX Card & DBS Esso Card

If you own the DBS Black Visa or AMEX card, you can enjoy 18% discount off your fuel if you top up your petrol between 7pm – 7am. (4% cash rebates will end on 31 December 2014)

With the Smile rewards, you can redeem $30 worth of fuel for 750 litres of petrol pumped.That works out to be a 2.5% cut to your fuel expenses after taking into account of the 35% bonus Smile points.

And that’s not all – don’t forget you also earn DBS Points for your fuel top-up, at the rate of 1 Points = S$5 spent. That’s 0.31% on top of all the discounts and rebates!

Total effective discount = 20.81% (Until 31 December 2014)

DBS Esso Platinum Card

Besides their Black Card, DBS also carries the Esso Platinum Card in their product suite, which offers up to 19.81% off your petrol. The only difference is you don’t enjoy the 4% promotional card rebates that the Black card offers. It makes up with a 7% card discount which is higher than the 4% of the Black Card. This will be the card to go for if you don’t want to stick to 7pm-7am rule and if DBS don’t extend the promotional 4% rebate for their Black Card.

Total effective discount = 19.81%

OCBC 365

OCBC 365 is next on the list for Esso’s pump. You can enjoy savings of up to 20.80% effective discount which matches up with the DBS Black Card. Unfortunately, good thing don’t last and the cash rebates of 4.3% will end on 31 December 2014 and you will need a minimum charge of $600 with a $80 cap in rebates for a month.

Total effective discount = 20.80% (Until 31 December 2014)

OCBC Plus!

Good news is you can get a higher discount using a OCBC/NTUC PLUS! Card! That’s because you get Link points when you use the PLUS! card and a $300 spend will get you an additional dollar off your groceries at NTUC FairPrice. That is equivalent to an additional discount of 0.33%.

Total effective discount = 21.13%

Citibank Dividend Card & Other Citibank Cards

Citibank Dividend Card matches up with the PLUS! card of 21.13% for Esso station. As long as you meet a min spend of $50 in a transaction, you will qualify for the cash rebates. You will also earn Citi Dollars for your transaction and 1,500 Citi Dollars can be used to exchange a $5 Shell voucher.

Total effective discount = 21.13%

Caltex

UOB Lady Card

With the UOB Lady Card, get up to 20.75% off from your fuel! It offers a relatively higher card discount to make up for a lesser rebates as compared to the first few cards. Caltex also has it’s own loyalty programme – the Thanks! Rewards. 40 Thanks! points is equivalent to a dollar off and if you add this together with the rewards from UOB (UNI$600=$10 SPC voucher), it sums up to an effective discount of 20.75%!

Total effective discount = 20.75%

UOB One Card

Another product from UOB is the UOB One Card which has higher discount than the UOB Lady Card. With an effective discount of 21.54%, it is the best card from UOB for motorists. That’s because besides the usual Smart$ rebate of 1.68%, you are also entitled to the UOB One Rebate of 2.80%. That’s massive even though you don’t qualify for the UNI$ programme.

Total effective discount = 21.54%

All other cards from UOB may get up to 19.07% off from their fuel purchase.

HSBC Premier MasterCard/VISA Infinite/VISA Platinum

HSBC Premier MasterCard, VISA Infinite and VISA Platinum offers a whopping 23.45% discount to your fuel – and that makes it the best credit card for petrol in 2014. (Ends on 31 December 2014 – This post may come a bit late, but we will keep it updated!) However, it comes with a few conditions to be eligible for the full discount. First, to get $4 off your petrol you will need to spend $80 on gross petrol. (Ends 31 Dec 14) That is equivalent to a 5% cut which is easily achievable should you need to top up a full tank on a RON 98. Next, to get the cash rebates of 5%, you are required to charge $800 a month for all 3 months in a quarter. Otherwise you are only eligible for 3% rebate.

Total effective discount = 23.45% (Ends on 31 December 2014)

All other HSBC cards can get up to 15.06%.

Shell

HSBC Premier MasterCard

If you want to refuel at a Shell station, then coincidentally, the HSBC Premier MasterCard tops the list again with a total effective discount of 21.81%. This time round it offers a higher cash rebates of 6% with a min spend of $800 a month for 3 months in a quarter. Unlike in Caltex, you don’t get the $4 off petrol for a $80 pump, but there is a Shell Escape Rewards where you can exchange 600 Escape points for $20 worth of voucher and you get additional 1 point for every $5 charged to your card. For its own card rewards, you can exchange for a $10 voucher for every 2250 points.

Total effective discount = 21.81%

HSBC VISA Infinite and VISA Platinum gets 5% cash rebates so total saving = 20.91% and all other HSBC cards get 16.61%.

OCBC 365 & Citibank Dividend Card

You can also use OCBC 365 Card to enjoy 16.54% or Citibank Dividend Card for 18.43% discount.

SPC

American Express Platinum Credit Card

If there is only SPC in your vicinity and you happen to own an American Express Platinum Card, you can enjoy the highest discount of 21.64% in SPC as compared to other cards. That’s because of a very generous 7% cashback on the financial charge amount and a 5% site discount. You can also get a $20 SPC voucher once you have accumulated 3,900 reward points from AMEX. (2 Reward Points = S$1.60 spent)

Total effective discount = 21.64%

POSB Everyday Card

Who say you need to be a high-income earner to enjoy exclusive discounts? With the POSB Everyday Card, you can get up to 20.10% discount for your SPC fuel.

Total effective discount = 20.10%

UOB Cards

All UOB cards get up to 20.33% off as there is a $3 petrol discount for every $60 gross spend.

Total effective discount = 20.33%

To summarise everything in a table:

Petrol Company	Best Credit Card	Total Effective Discount
Esso	OCBC Plus! VISA & Citibank Dividend Card	21.13%
Caltex	HSBC Premier MasterCard/VISA Infinite/VISA Platinum	23.45%
Shell	HSBC Premier MasterCard	21.81%
SPC	American Express Platinum Credit Card	21.64%

To see the complete list and calculations:

http://www.moneydigest.sg/best-petrol-credit-card/

Esso

Caltex

Shell

SPC

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