Saturday, May 5, 2012

Who say credit card is not good ?

We often hear the financial advisor that it is best not to use credit card but to pay items in full cash because this is the best way to control your spending and not stretching beyond your spending limits. For those people who is able to control yourself, it is definitely not true for the above statement. Use credit card wisely and you will know you gain a lot and be happy planning a strategy to use the credit card you have !

Based on my limited knowledge on all the credit cards in Singapore, I would like to introduce some credit cards that I personally think it works out perfectly for me.

(1) The best credit card you should use every day is UOB One card. There are always some rules but you should be able to meet the criteria easily. Firstly, you must swipe a minimum of 3 transactions per month and also a minimum monthly spent of S$300 per month continuously for 3 months (that's not very hard, right? ) and you will get cash rebate of S$30.

Of course, there are many ways to plan your monthly payment, you can consolidate all your payment (insurance, phone bills, oversea spending, etc.) If you can hit the amount of S$800 per month with the above criteria, you get S$80, and the 3rd categorory is S$1,500 per month. That's 3.3% cash rebate ! Go and calculate your redemption value per dollars spent, it is always in the range of 0.5% and below, definitely not over 1%. If you want to hit the second or third category, you can issue a supplementary credit card for your spouse to consolidate the spending in monthly basis (we are not encouraging you to spend more in order to get the cash rebate, the key point is consolidation).

For me, once I know I hit the S$800 per month, I will immediately stop using this card and change to OCBC Robinson Card (why ? tell you below later at point 3).

(2) The second best card you should own is Standard Chartered Manhattan Platinum card because the card is very beautiful (not only that). Ask yourself a question, do you ever swipe a S$3,000 item in a year ? If you do, get this card. I can give you some good example, like buying a good mattress, a TV , furniture, consolidate your insurance payment in annual term instead of monthly term (in fact annual term insurance is slightly cheaper than monthly term), NATAS fair booking, air ticket booking, oversea spending, or paying a downpayment of JB condo, Horizon Hills (2%, 8%), etc.

This card works perfectly if you spend above S$3,000 in a month, because the cash back is 5% , their second category of $1,000-$2,999 is only 1%, I rather go and use UOB one card. Hence, the key here is, buying the big item purchase. If you have one, use this card, since you hit the S$3,000 that particular month, make sure you don't stop it, might as well consolidate the credit card into this card until it hit S$4,000, as the cap is S$200 per quarter. My strategy is , use the card only for one month and hit S$4,000 and stop using the card for the next two months, and just wait to get the cash rebate of S$200, the rest of the spending, goes to OCBC Robinson card.

For me, it is easy to hit S$3,000 sometimes, as I need to travel once in a month, the hotel, air ticket spending can hit that figure easily especially the Europe business trip.

(3) My third card, OCBC Robinson credit card. Personally, I like Robinson departmental store, and you only need to collect S$4,800 spending (no restriction like above, same as other normal credit card) to redeem S$30 dollars Robinson voucher. If you take a look at normal credit card redemption, it is always at least S$2300 spent for $10 voucher (be it a departmental store voucher , petrol voucher, NTUC voucher, etc.). So, make the calculation yourself, S$2,300 x 3 = S$6,900 spent, then you can only redeem a S$30 worth item. With OCBC robinson credit card, that's only S$4800. Of course there are more good things about this card, like free card park at raffles city center, more discount during the Sales period, etc.

(4) Last but not least, there are some good credit card target on specific spending, like my POSB Everyday card, I use it for my car petrol, together with my SPC U Card, that's a total cash rebate up to 17% ! And this POSB Everyday card good for HDB season parking of 3% rebate, and also the SP services, Town council monthly rebate, etc. For these targetted store rebate, you should just go ahead and use the particular card , instead of using the above credit card mentioned.

There are many more credit cards in the market, like Citibank card, 2% rebate on Giant purchase, etc. I recently just redeem 17 pieces of Carltex Petrol voucher of $10, I found out, this HSBC card is no longer my beloved card, as I have found the best credit card  mentioned above.

After all these good benefits, to get a credit card like Standard Chartered credit card, they even give you free cash of S$80 each in the card, hey, what more you want to ask for ? In conclusion, plan carefully, you will know credit card spending is good and fun, don't you think so ? at least for me, it is.

p/s: oh yeah, I read some people posting about redeem the credit card point to Krisfyler mileage point, for me, don't waste time on this, first of all, the SIA ticket fuel surcharge is so expensive, with that surcharge, I can purchase a complete full fare budget airline ticket ! I am quoting the airfare from Singapore to Hong Kong, Taiwan and even Japan. There is no saving at all ! For me, it is way faster to just collect the Krisfyler mileage point by flying SIA during the business trip instead of converting the credit card points...

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