#Ownthefuture: Here's Why You Should Own at Least 1 Credit Card in Singapore

Growing up, I had many people around advising me not to apply for credit cards as it would lead to overspending and land me in crushing debt.

There is truth to that statement, but then again, there is more to the story.

In my opinion, credit cards are like fire in the sense that they can be a good servant or a bad master.

If used well, they can help you save money. But, if your use of them is not controlled, they could burn you badly.

All things in moderation. In my opinion, if you can apply for a credit card and use it responsibly, everyone should own at least one credit card. So how do you know the card you apply is the best credit card for you?

Aside from the obvious benefits like cashback, cash rebate, miles or rewards that credit cards offer.

There are actually quite a few less obvious benefits that credit cards dish out.

Here is what you need to know!

Disclaimer: The information provided by Seedly serves as an educational piece and is not intended to be personalised financial advice. Readers should always do their own due diligence and consider their financial goals before committing to any financial product and consult your financial advisor before making any decisions.

TL;DR: Credit Card Singapore Benefits

1. Credit Cards Provide an Interest-Free Loan for About Two Months
2. Credit Cards Help You Build Up Your Credit Score for Taking Loans
3. Credit Cards Offer More Fraud Protection Than Debit Cards
4. Credit Cards Have Exclusive Deals and Discounts
5. Credit Cards Offer Balance Transfer Promotions With Lower Interest Rates That Can Help You Clear Your Debt
6. Credit Cards Are a Lifesaver for Travelling Expenses
7. Credit Cards Offer Attractive Sign-up Bonuses

Speaking of credit card sign up bonuses.

We have partnered with SingSaver and American Express to launch this super exclusive Bitcoin campaign for the first time ever in Singapore.

You will receive up to S$365 worth of Bitcoin when you successfully apply for a credit card. This offer is ONLY available on Seedly & SingSaver. You will not find it anywhere else.

These rewards will be given out from now until 7 November 2021 OR until S$1 million worth of Bitcoin has been claimed, whichever is earlier.

Also, the first 2,000 eligible applicants will receive an additional S$100 worth of Bitcoin so get to it!

If you were wondering, these rewards will also be given out to your Gemini account as they are our exclusive cryptocurrency wallet partner for this campaign.

How to Apply:

1. Apply for your favourite credit card.
2. Receive up to S$265 (S$265 for new customers and S$50 for existing customers) worth of Bitcoin after you fulfil the eligibility requirements.)
3. Spend S$500 on the card within the first 30 days of card approval.
4. Be one of the first 2,000 eligible applicants to receive up to an additional S$100 worth of Bitcoin.

Eligible Cards: American Express in Singapore

Here are the cards you can apply for with this campaign:

More details about the cards can be found on the landing page. And of course, terms and conditions apply.

Disclaimer: Seedly and Singsaver will never ask you for your crypto wallet address nor instruct you to transfer any crypto to us throughout any of the campaigns.

1. Credit Cards Provide an Interest-Free Loan for About Two Months

At its core, a credit card is a short term credit facility.

When you spend money on your credit card, you are actually borrowing money from the bank to pay for your purchase first.

Typically, you will not be charged interest on the outstanding balance three or four weeks after your credit card statement arrives.

This means that if you charged something on your credit card on the first day of the credit card’s statement cycle and pay only when payment is due, you can effectively take a two-month interest-free loan.

The money that is freed up for the two months can sit in your high-interest rate savings account to earn interest of about 0.5% – 1.5%.

Let’s say you have to buy big-ticket items like furniture or appliances that will set you back about $10,000.

If you put this $10,000 in your bank account for two months, you can receive about $25 in interest for just paying with your credit card.

And this is not even including the cashback, cash rebate, miles or rewards that credit cards give you.

This adds up over time if you have big expenses coming up.

If you want to employ this method, you should optimise your spending on the first day of the credit card cycle and pay one or two days before the payment is due to avoid being charged a late fee and interest on your outstanding balance.

It is vital that you pay your credit card bills on time as banks will late fees of about $100 if you do not pay on time or make the minimum payment.

In addition, banks will charge interest of about 25 per cent on the outstanding balance if you do not pay or just pay the minimum monthly amount due.

The crazy thing about the interest is that it compounds daily!

2. Credit Cards Help You Build Up Your Credit Score for Taking Loans

Another benefit of having a credit card is that it helps you build up your credit score found in your personal credit report issued by Credit Bureau Singapore (CBS).

Consumers with a long and good credit history will be viewed more favourably than consumers with little or no credit history.

More specifically, the last 12 months of your credit repayment conduct is one of the factors used to calculate your credit score.

This credit score is what banks will look at to assess your creditworthiness when you apply for loans and credit cards.

This is why it is good to spend responsibly with a credit card and make your payments promptly to build up a better credit score.

3. Credit Cards Offer More Fraud Protection Than Debit Cards

Apart from building up your credit score, credit cards offer better fraud protection as well.

And unfortunately, fraud is a problem in Singapore.

According to The Straits Times, there were 1,848 police reports made by victims who fell prey to criminals who phished for banking and card details and made unauthorised online banking and card transactions in 2020 – up 462 per cent from the previous year when there were only 329 cases.

In the vent that you fall prey to a fraudulent charge on a credit card, you can easily contact your bank to reverse the charge and resolve the issue.

Credit cardholders do not suffer any direct financial loss as the fraudulent charge is made on a credit facility,

Generally, these issues are resolved shortly after the fraudulent charge has occurred.

Whereas if you were using a debit card, the money from your account is taken out of your linked bank account immediately after processing the fraudulent charge.

In other words, you will directly suffer the financial loss from the fraudulent charge until your bank sorts out the issue and reimburses you.

There are two problems. First, you will not be able to access the funds that the criminals took out of your savings account. Second, you might temporarily lose access to the savings account while the bank sorts things out.

4. Credit Cards Have Exclusive Deals and Discounts

In addition to credit card rewards, you get to enjoy exclusive perks and discounts with credit cards.

You would often see many food and beverage establishments offer considerable discounts if you pay with a particular bank’s credit card.

5. Credit Cards Offer Balance Transfer Promotions With Lower Interest Rates That Can Help You Clear Your Debt

More often than not, banks will offer low-interest credit card balance transfer promotions or even cashback for the balance transfer.

This will be helpful if you are stuck with multiple high-interest rate debts (e.g. credit card debt), you can consider

If you currently have multiple debts with high interest rates, you can obtain a credit card balance transfer and consolidate your debt onto one credit card.

If you have done your due diligence, you will enjoy a lower interest rate and one easy to manage monthly payment that will help you clear your debts more effectively.

However, you have to be careful when taking up these credit card balance transfer promotions. Do carefully read the terms and conditions to find out when the low promotional rate will expire.

After all, these special promotional credit balance transfer rates will almost always expire.

6. Credit Cards Are a Lifesaver for Travelling Expenses

With Singapore introducing the Vaccinated Travel Lane (VTL) for travel to Germany and Brunei from 8 Sep 2021 you might be considering a trip there.

While travelling, having a credit card for your money needs is ideal, if you have the right one.

For instance, having credit cards offer better fraud or theft protection compared to a debit card.

Also, if you are looking to rent a car or book a hotel room you might find that they only accept credit cards.

This is because hotels and car rental firms want to have the assurance of being able to charge customers for any damages they might cause.

In addition, not all foreign country merchants will accept a debit card even if your card is from a huge international bank.

Not to mention that some of the best travel-focused credit cards offer additional perks like free travel insurance, airport lounge access, no foreign currency transaction fees, and more.

7. Credit Cards Offer Attractive Sign-up Bonuses

If you are still on the fence about credit cards, maybe the signup bonuses might help.

Banks are always offering free cash and expensive gifts for new and existing credit card sign-ups.

But do be careful and not go overboard and apply for too many credit cards.

This is because when you apply for a credit card, it will set off an enquiry into your credit score.

Too many such inquiries are a warning sign to lenders who view them as attempts to take on more debt, thus increasing your credit exposure.

This may lead to a decrease in your credit score.

In addition, there is a Balance To Income (BTI) cap mandated by the Monetary Authority of Singapore (MAS) across Financial Institutions (FI) in Singapore you need to be aware of.

MAS has mandated that as of 1 June 2019:

financial institutions may not grant further unsecured credit to an individual whose Balance-to-Income (“BTI”) ratio exceeds the industry-wide borrowing limit for three consecutive months.
This means that the FI cannot allow further drawdown of existing credit limits, approve credit limit increases, or grant new credit facilities to such a borrower.
The BTI is calculated by dividing the borrower’s outstanding unsecured debt by his or her monthly income.
This borrowing limit is being phased in from a BTI of 24 times from 1 June 2015, to a BTI of 12 times from 1 June 2019