Owning a credit card in Singapore has a lot of perks. It offers a convenient way to purchase online or in person. Even if you’re short on cash for the month, you can still purchase big-ticket items or gadgets that you want since it allows you to buy now and pay later. Moreover, some of the credit cards provide quick cash in times of emergency. Also, spending with credit cards means earning rewards.
However, what mostly stops people from applying for one is that applying for a credit card can be challenging. Before processing your credit card, banks consider various aspects, including your credit history, income, employment, debt-to-income ratio, credit utilisation, and payment history, among others.
But, with the appropriate application strategy and patience, you may greatly improve your credit card application approval odds.
Therefore, let us discover the easiest ways to get a credit card in Singapore and enjoy its many perks.
Understanding How Credit Cards Work
Credit cards let you buy things without paying for them. You can borrow money from the bank and pay it back later. Credit cards offer rewards and points programmes, making them appealing to users.
They make managing expenses, making purchases, and accessing funds easy and flexible in Singapore.
Here are the key features of credit cards in Singapore:
Borrow Now, Pay Later.
Credit cards allow purchases without immediate payment. A bank gives you a line of credit. Shopping with a credit card involves borrowing money from the bank. At the point of sale, you can buy goods and services and pay later.
Rewards and Points Programmes
Credit card rewards and points programmes in Singapore are popular. Banks give incentives to consumers to use their cards for routine purchases. Cashback, rewards points, and airline miles are examples of incentives.
- Cashback: Credit cards offer rewards on a percentage of purchases. If your card gives 5% cashback on dining, your credit card statement will show 5% of the cost as a cash reward.
- Rewards Points: Rewards points are earned per transaction. You can collect these points and redeem them for gift cards, products, or cash credits.
- Airline Miles: Certain credit cards let frequent travellers earn airline miles with every purchase. These miles may book flights, upgrade your travel experience, and get you into airport lounges.
Flexible Repayment Options
Credit cards allow repayment flexibility. Each month, you can pay off your credit card statement in full or make a minimum payment. However, credit card interest can be high if you carry a balance from month to month. Responsible cardholders pay off their balance monthly to avoid interest.
Each card has a credit limit. This limit is your card’s maximum borrowing limit. Limits depend on creditworthiness, income, and card type. To minimise overspending, keep your credit card limit in mind.
Security and Fraud Protection
Security and fraud protection are common on Singapore credit cards. These precautions protect your finances if your card is lost, stolen, or used fraudulently. A zero-liability policy from many credit card providers protects you from fraudulent transactions.
Credit card companies send monthly statements with transactions, balances, minimum payments, and due dates. These statements help you track spending and manage your credit card wisely.
Credit Card Benefits In Singapore: Why You Should Own One?
Singapore credit cards are handy financial tools with several benefits. Below are some of the key benefits of credit cards in Singapore.
1. Instant Access to Funds and Increased Spending Power
Credit cards provide financial security in your wallet. With a credit limit, you may easily buy or handle unforeseen expenses. Your credit card gives you more spending power, letting you handle financial needs and obligations quickly.
2. Greater Security and Fraud Protection
Carrying cash can be risky. Credit cards make in-store and online purchases safer. You can easily deactivate a lost or stolen card to prevent unauthorised use. Credit cards frequently have strong fraud prevention features to prevent unauthorised or unfulfilled transactions. This extra security gives you peace of mind when using your card.
3. Convenience and Flexibility When Travelling
Credit cards are essential travel companions. They make hotel payments, airport fees, and unexpected payments easy to manage. Moreover, credit cards are convenient to use for ride-hailing, restaurant delivery, and last-minute travel extensions. Additional privileges include airport lounge access and emergency cash withdrawals with dedicated travel credit cards.
4. Complimentary Travel Insurance and Airport Lounge Access
Travel credit cards generally include free travel insurance for accidental injury, lost luggage, and other dangers. The coverage may vary, but it can enhance your travel plans. Moreover, free access to airport lounges with drinks, showers, and workspaces are available with selected credit cards.
5. Rewarding Every Purchase with Cashback, Points, or Air Miles
The ability to earn rewards for every credit card purchase is a major draw. Air miles, cashback, and rewards points are credit card incentives. Rewards can add up to big savings.
Cashback: Receive a percentage of your spending as cashback, effectively reducing your overall expenses.
Rewards Points: Accumulate points that can be redeemed for a wide range of perks, including gift vouchers, merchandise, or even cash credits.
Air Miles: Earn air miles that can be exchanged for flight tickets, seat upgrades, hotel stays, car rentals, shopping credits, and other travel-related benefits.
6. Cardholder Perks and Privileges
Credit cardholders get prizes and other benefits. These may include eating and hotel discounts, partner merchant incentives, and concierge services for travel and emergencies. These benefits enhance your lifestyle and add value beyond rewards.
7. Improving Cashflow and Financial Control
Credit cards help with budgeting too. Digital banking apps let you track and limit spending in real time. Credit cards can help you pay bills and other essentials before payday. This method reduces late payment fees and improves financial control.
Disadvantages of Credit Cards in Singapore
Credit cards provide many benefits, but they can have drawbacks. Credit cards are everywhere in Singapore, so understanding their disadvantages is essential to budgeting. Some disadvantages to consider:
1. Excessive Spending
Credit card convenience might be risky. The fact that you’re spending money you may not have is easy to overlook. Without caution, this can lead to overspending and debt. The convenience of swipe-based purchases can lead to uncontrollable spending.
Due to fees and interest, poor credit card management can be costly. Carrying a card balance can swiftly lead to difficult-to-repay debt. The high interest rates on some credit cards might make things worse.
3. Additional Fees
Credit cards are notorious for hidden fees. Missed payments, credit limit overages, and late payments may result in fines and interest costs. Some credit cards charge monthly or annual fees for use. Cash withdrawal ATM fees might potentially drain your funds.
4. Fraudulent Activity
Credit cards and other electronic payment systems are vulnerable to theft and fraud. A stolen credit card can be used to steal your identity and make unauthorised purchases, resulting in financial losses and a lengthy recovery process. Although many banks offer fraud protection, you must be watchful and report unusual activity immediately.
Monthly credit card balances can quickly rise to debt. Many underestimate the long-term effects of this practice. Interest and fees can quickly outweigh credit card convenience and perks. Revolving debt is easy to get into if you don’t pay your bill each month.
Credit card usage may be restricted (where and how). Some issuers charge extra for international card use, making foreign transactions less appealing. Credit card cash withdrawals may involve fees. This can be inconvenient if you travel often or need cash for certain transactions.
10 Easiest Ways to Get A Credit Card Approved In Singapore
You can’t deny that owning a credit card can be a game-changer in terms of simplicity, perks, and purchasing power. However, credit card approval can be difficult. Therefore, below are some of the easiest ways to improve your Singapore credit card application approval odds.
1. Limit Your Loans and Credit Cards
When reviewing credit card applications, Singaporean banks carefully review credit reports. Multiple loans or credit cards might signal to banks that you may struggle to handle another credit line. Consider paying off short-term debts before applying for a credit card to improve your chances. Reducing debt shows you can handle more financial obligations.
2. Fill Out Applications and Submit Documents Carefully
Application details are crucial. Please complete all forms and provide all essential documentation. Inconsistent applications can be rejected. These records help banks determine your financial stability, so it’s essential to present accurate and complete information.
3. Avoid Defaults and Bankruptcy
Credit record damage from defaults and bankruptcy can hurt your prospects of getting low-interest credit cards. Pay attention to your finances and prevent these concerns to maintain your creditworthiness.
4. Build a Good Credit History
Banks in Singapore evaluate creditworthiness based on history. Creditors may view a person without credit as risky. Consider a small loan and fast repayment to build credit. Or, use your first credit card sensibly by paying on time and minimising credit usage. Taking this proactive step improves credit history.
5. Pay Loans and Credit Cards on Time
Payments on time show financial responsibility and boost credit scores. Consistently paying loans and credit card bills shows financial responsibility.
6. Avoid Applying for Multiple Credit Cards Simultaneously
Multiple credit card applications in a short time may indicate credit-hungry behaviour to banks. This view can hurt your credit score and approval chances. Apply for one credit card at a time, and wait between applications.
7. Ensure You Meet Bank Eligibility Requirements
Check the bank’s qualifying requirements before applying for a credit card. These include being of legal age, having a stable income, earning enough to repay debts, and being a Singaporean or permanent resident.
8. Don’t Apply for a New Card Too Soon
After getting your first credit card, wait a few months before applying again. Multiple card applications in a row can appear to be overspending, which can hurt your credit score.
9. Avoid Delinquencies
Delinquencies and missed payments hurt credit. To keep your credit score high, pay your payments on time and in full.
10. Consider a Retail Credit Card for Your First Card
Apply for a retail credit card initially if you have little or no credit history. Despite higher interest rates, retail credit cards are easier to get. Successfully managing a retail credit card can lead to conventional credit cards.
The Bottom Line
In conclusion, Singapore credit card approval demands strategy and financial management. These tactics and financial awareness can help you get the credit card that meets your needs and goals.
If you can’t get a credit card and need money for major purchases or travel, you can get a personal loan. Crawfort offers instant loans with application approval that only takes 8 minutes. Apply for a personal loan today!