Credit cards come with a host of capabilities and positive aspects – a fantastic reason why credit cards are a preferred phenomenon. If you are seeking to apply for a credit card anytime quickly, here are ten items you absolutely will need to know. These points will give you a much better understanding of how credit cards work and what you can anticipate from them.
Annual fees on credit cards
All credit cards provided by banks (at least a main percentage of them), come with an annual charge. The annual fee mainly varies from 1 card to yet another, even in the case of cards provided by the same bank. Usually, Premier cards that give superior rewards than standard cards come with a larger annual fee.
Although the Major card just about undoubtedly comes with an annual fee, supplementary cards also come with an annual fee in most instances. In some cases, the annual fee on the supplementary card is waived for the initially year or so – this is to retain the card additional competitive and in-demand. Certain banks waive the annual fee on the principal card as properly – for the initially year, or initial two years, or longer.
Annual rate of interest
All transactions you make using your credit card attract a certain price of interest identified as the annual percentage price of interest (APR). The interest rate is dependent on the bank that is offering the card and the sort of card. The interest rate for most credit cards is Singapore is among 23% p.a. and 30% p.a.
Banks permit for an interest free period of about 21 days from the release of the statement (once more, this depends on the bank and the type of card) and never charge an interest if the quantity is repaid in full inside this interest cost-free window. If the quantity isn’t paid just before the finish of the interest free period, interest charges will accordingly hold applicable.
Cash advance charges
Credit cards enable prospects to make emergency cash withdrawals from ATMs. These money advances carry a handling charge of about 5%-six% of the withdrawn amount, apart from interest charges that fall in the variety amongst 23% and 28% p.a. Interest on cash advances is computed on a every day basis at a compounding rate until the quantity is repaid in full. Money advances are ordinarily a risky phenomenon, largely contemplating the high interest charges. So if you withdraw money making use of your credit card, it is advisable that you repay the amount in complete at the earliest.
Minimum month-to-month payments
As a credit card client, you are essential to pay a minimum amount each and every month – or the entire amount if that’s doable – amounting to 3% of the total monthly outstanding balance. Minimum payments have to have to be produced by the payment due date if late payment charges have to avoided. The minimum payment in your credit card monthly statement can also involve pending minimum payments from previous months, late payment charges, cash advance charges, and overlimit costs, if they hold applicable.
Late payment charges
If the minimum amount isn’t paid by the payment due date, banks levy a certain fee, frequently referred to as the late payment fee. The late payment fee for credit cards in Singapore can be anywhere in the variety between S$40 and S$80, based on the bank supplying 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 involving S$40 and S$60 for credit cards in Singapore.
Cashbacks and reward points
An aspect that tends to make credit-cards a quite thrilling phenomenon is the reward points/cashbacks that can be earned on purchases. Various cards are structured differently and let you to earn either cashbacks or reward points or each, on your purchases. Some cards let you to earn reward points on groceries, while some other let you earn cashbacks or reward points on air ticket bookings, retail purchases, etc. Cashbacks and reward points are attributes that are certain to certain credit cards and the extent of advantages depends on the kind of card and the bank supplying the distinct card. Reward points earned on purchases can be converted into exciting vouchers, discounts and eye-catching buying/retail acquire/online bargains from the card’s rewards catalogue.
Balance transfers
Specific credit cards allow you to transfer your entire credit card balance to that distinct credit card account, enabling you to consolidate your debt. Balance transfer credit cards come with an interest cost-free period of 6 months – 1 year, depending on the card you have applied for. In the case of balance transfer cards, banks charge a processing charge and may possibly also charge an interest (unlikely in a majority of instances). Immediately after discover merchant services (six months – 1 year depending on the card), typical 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 permit you to earn air miles by converting your reward points earned on purchases applying the card. Ordinarily, air miles cards come with a higher annual fee owing to their premium nature. As a consumer of a premium credit card, you can accumulate sufficient air mile points to absolutely offset your subsequent trip!