Credit cards feature a host of features and benefits – a very good reason why bank cards are a favorite phenomenon. If you should be looking to apply for a bank card anytime soon, listed below are 10 things you certainly need certainly to know. These points will give you a better understanding 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 another, even in the case of cards made available from the same bank. Usually, Premier cards that provide better benefits than normal cards feature a higher annual fee.
As the Primary card most likely posseses an annual fee, supplementary cards also include an annual fee in many cases. Sometimes, the annual fee on the supplementary card is waived for the very first year or so – that is to keep the card more competitive and in-demand. Certain banks waive the annual fee on the primary card as well – for the very first year, or first 2 yrs, or longer.
Annual rate of interest
All transactions you make using your bank card attract a particular rate of interest referred to as the annual percentage rate of interest (APR). The interest rate is determined by the lender that’s offering the card and the sort of card. The interest rate for most bank cards is Singapore is between 23% p.a. and 30% p.a.
Banks permit an interest free period of about 21 days from the release of the statement (again, this depends upon the lender and the sort of card) and don’t charge an interest if the total amount is repaid entirely through this interest free window. If the total amount isn’t paid before the end of the interest free period, interest charges will accordingly hold applicable.
Cash advance charges
Credit cards enable customers to produce emergency cash withdrawals from ATMs. These cash advances carry a handling charge of about 5%-6% of the withdrawn amount, besides interest charges that fall in the range between 23% and 28% p.a. Interest on cash advances is computed on a daily basis at a compounding rate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. If you withdraw money using your bank card, it’s advisable that you repay the total amount entirely at the earliest.
Minimum monthly payments
As a bank card customer, you are required to pay for a minimum amount every 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 need certainly to avoided. The minimum payment in your bank card monthly statement can also 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 particular fee, commonly known as the late payment fee. The late payment fee for bank cards in Singapore may be anywhere in the range between S$40 and S$80, with respect to the bank offering the card.
Overlimit fees hold applicable and are levied by the lender 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 that makes credit-cards a fairly exciting phenomenon is the reward points/cashbacks that may be earned on purchases. Different cards are structured differently and allow you to earn either cashbacks or reward points or both, in your purchases. 카드깡 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 depends upon the sort of card and the lender offering this 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 allow you to transfer your entire bank card balance to that specific bank card account, enabling one to consolidate your debt. Balance transfer bank cards include an interest free amount of 6 months – 1 year, with respect to the card you’ve applied for. In case of balance transfer cards, banks charge a processing fee and may also charge an interest (unlikely in most cases). Following the interest free period (6 months – 1 year with respect to 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 for their premium nature. As a person of a premium bank card, you are able to accumulate enough air mile points to completely offset the next vacation!
In brief, your credit score is a projection of how well you’ve managed your debt in the past. It requires into consideration 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 good credit score is vital to getting loan applications and bank card applications approved.
The aforementioned mentioned points will come in handy if you should be contemplating applying for a credit card. These aspects will give you a comprehensive understanding of how bank cards work in Singapore, providing you a better concept of everything you can expect. These will even work if you should be not happy along with your current card and are looking to switch over to another bank card as well.