Credit cards have become a ubiquitous part of modern life, offering convenience and flexibility in how we make purchases and manage our finances. In fact, I highly recommend young adults starting their new career to get a credit card as soon as possible. Most of us in Singapore start applying for our own credit cards after getting our first job and meeting the minimum income requirement, which is usually around $30,000 per year. In fact, as a young working adult, applying for a credit card is usually one of the first few financial decisions we make for ourselves. Obtaining our first credit card will aid in the development of our credit history and the preservation of our financial health, as your creditworthiness will be determined based on past and current credit activities.
With a plethora of credit cards available in Singapore, choosing the right one can be a daunting task. However, by understanding your spending habits and lifestyle, you can choose a credit card that will provide the best benefits and rewards for you. Here are some steps to help you choose the best credit card for your lifestyle in Singapore.
Understand Your Spending Habits
Before choosing a credit card, it’s important to understand your spending habits. This includes identifying your biggest expenses and categorising your spending into different categories such as groceries, dining, travel, and entertainment. By doing so, you can choose a credit card that offers rewards and benefits that align with your spending patterns.
For example, if you spend a lot on groceries and dining out, a credit card that offers cashback or rewards for those categories may be the best option. Alternatively, if you frequently travel for work or leisure, a credit card that offers air miles or travel rewards may be more beneficial.
Personally, I prefer a cash back credit card as I am a simplicity-seeker. Cash back credit cards allow me to earn flexible rewards on everyday purchases.
Types of Credit Cards Available
There are several types of credit cards available in Singapore, including cashback, rewards, and air miles cards. Each type offers different benefits, so it’s important to compare them and choose one that suits your lifestyle.
Cashback cards offer cash rebates for specific categories of spending, such as groceries, dining, or petrol. Rewards cards offer points or miles for each dollar spent, which can be redeemed for products or services. Air miles cards allow you to earn miles for spending, which can be used for flights or hotel bookings.
Factors to Consider When Choosing a Credit Card
When choosing a credit card, there are several factors to consider, such as interest rates and annual fees, credit limit and credit score requirements, rewards and cashback programs, and additional perks and benefits.
Always ensure to read the terms and conditions of each credit card carefully to understand the fees and charges involved. There are various requirements such as credit limit, credit score and annual income. This will determine the eligibility of the credit card that you are interested in.
Evaluate the rewards and cashback programs to determine which one offers the most value for your spending habits. Some credit cards may offer higher rewards for specific categories of spending, while others may offer a flat rate for all spending.
Additionally, some credit cards may offer additional perks and benefits, such as discounts on dining or shopping, complimentary travel insurance, or airport lounge access. Consider which perks are most valuable to you and whether they outweigh any annual fees or other costs associated with the card.
Matching the Right Credit Card to Your Lifestyle
Once you’ve identified your spending habits, chosen the type of credit card that suits your needs, and considered the factors mentioned above, you can now choose a credit card that aligns with your lifestyle.
For example, if you are a frequent traveller, an air miles card may be the best option for you. On the other hand, if you spend most of your money on groceries and dining out, a credit card that offers cashback or rewards in those categories may be more beneficial.
Make sure to choose a credit card that matches your lifestyle and offers the most value for your spending habits. It is counter productive to choose a credit card that provides great incentives yet being able to hit the required spending mechanisms.
Tips for Maximising Credit Card Benefits
To maximise the benefits of your credit card, make sure to:
- Pay your bills on time to avoid late fees and interest charges
- Use your card for purchases in the categories that earn the most rewards or cashback
- Keep track of your spending to avoid overspending and accumulating debt
- Take advantage of additional perks and benefits offered by your credit card, such as discounts or promotions
Pro-tip: Most credit cards have an annual fee of at least $190. Depending on how you utilise the credit card benefits, these fees may end up costing you instead of helping you to save. In this situation, you can simply contact your credit card issuer to request for a waiver of your annual fees. Although this is not guaranteed, most issuers do grant at least a one-time waiver of your annual fees.
In conclusion, choosing the best credit card for your lifestyle in Singapore requires careful consideration of your spending habits, the types of credit cards available, and the factors that matter most to you. By following these steps and tips, you can find a credit card that provides the maximum benefits and rewards for your lifestyle.