Credit cards feature a host of features and benefits – a good reason why bank cards are a popular phenomenon. If you are looking to apply for a bank card any time soon, listed here are 10 things you definitely need to know. These points provides you with an improved understanding of how bank cards work and what you can expect from them.
Annual fees on bank cards
All bank cards provided by banks (at least a major percentage of them), come with an annual fee. The annual fee mostly varies from card to some other, even in the case of cards provided by the same bank. Usually, Premier cards that provide better benefits than normal cards feature a higher annual fee.
Whilst the Primary card almost certainly posseses an annual fee, supplementary cards also come with an annual fee in most cases. Sometimes, the annual fee on the supplementary card is waived for the first 12 months – this really is to keep the card more competitive and in-demand. Certain banks waive the annual fee on the primary card as well – for the first year, or first 2 yrs, or longer.
Annual rate of interest
All transactions you make utilizing your credit card attract a certain rate of interest known as the annual percentage rate of interest (APR). The interest rate is determined by the bank that’s offering the card and the kind of card. The interest rate for many bank cards is Singapore is between 23% p.a. and 30% p.a.
Banks permit a pursuit free period around 21 days from the release of the statement (again, this depends on the bank and the kind of card) and don’t charge a pursuit if the total amount is repaid entirely through this interest free window. If the total 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 make 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 These cash advances carry a handling charge around 5%-6% of the withdrawn amount, besides interest charges that fall in the product range between 23% and 28% p.a. Interest on cash advances is computed on a regular basis at a compounding rate until the amount is repaid in full. Cash advances usually are a risky phenomenon, mostly taking into consideration the high interest charges. So if you withdraw money utilizing your credit card, it’s advisable that you repay the total amount entirely at the earliest.
Minimum monthly payments
As a bank card customer, you’re required to pay a minimum amount each month – or the entire amount if that’s possible – amounting to 3% of the sum total monthly outstanding balance. Minimum payments need to be created by the payment deadline if late payment charges have to avoided. The minimum payment in your credit 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 deadline, banks levy a certain fee, commonly referred to as the late payment fee. The late payment fee for bank cards in Singapore may be anywhere in the product range 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 bank cards in Singapore.
Cashbacks and reward points
An aspect which makes credit-cards quite a exciting phenomenon could be the reward points/cashbacks that may be earned on purchases. Different cards are structured differently and permit you to earn either cashbacks or reward points or both, in your purchases. Some cards permit 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 that are specific to certain bank cards and the extent of benefits depends on the kind of card and the bank offering the particular card. Reward points earned on purchases may be became exciting vouchers, discounts and attractive shopping/retail purchase/online deals from the card’s rewards catalogue.
Certain bank cards permit you to transfer your complete credit card balance to that particular credit card account, enabling you to consolidate your debt. Balance transfer bank cards come with an interest free amount of 6 months – 1 year, 소액결제 현금화 depending on the card you’ve applied for. In the event of balance transfer cards, banks charge a processing fee and might also charge a pursuit (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) provided by some banks in Singapore permit you to earn air miles by converting your reward points earned on purchases utilising the card. Usually, air miles cards feature a higher annual fee owing with their premium nature. As an individual of reasonably limited credit card, you are able to accumulate enough air mile points to completely offset your next vacation!
In brief, your credit score is just a projection of how well you’ve managed your debt in the past. It requires into account your payment patterns and records cases of late payments, credit overlimits, loan defaults, history of regular/timely payments, etc, and gives banks a notion of how good you may be at handling debt in the future. An excellent credit score is imperative to getting loan applications and credit card applications approved.
The aforementioned mentioned points comes into play handy if you’re contemplating applying for a credit card. These aspects provides you with a comprehensive understanding of how bank cards work in Singapore, providing you an improved notion of what you can expect. These will also work if you’re not happy along with your current card and are looking to change over to some other credit card as well.