Credit cards in Singapore in 2017!

Useful information on consumer rights, financial products and debt problems!

• http://www.moneysense.gov.sg/Understanding-Financial-Products/Credit-and-Loans/Guides-and-Articles.aspx - this website is provided by the Government of Singapore and here you can find useful information and tips on financial services such as loans and credit cards.
• https://www.case.org.sg/Default.aspx - this website is provided by the Consumers Association of Singapore and here you can find information on consumer rights and protection as well as laws and regulations that comply with consumer rights.
• http://www.ccs.org.sg/ - this website is provided by the Credit Counselling Singapore and here you can find information on debt problems, solutions and receive information on debt counselling.

How do credit cards work?

Credit cards allow you to borrow money up to a certain limit as long as you make regular minimum repayments. Most credit cards have an annual fee.

To get a credit card you simply must fill our the application form on credit card issuer's website and wait for approval. Once your application is approved you will receive a line of credit. Afterwards you will receive your credit card in the mail and will have to activate it and sign the back of the credit card. You can use your credit card to make purchases in store or online as well as you can pay your bills.

Sometimes while making a purchase your credit card can be declined, below you can see some of the most common reasons:

• - Your credit card is not activated;
• - Your credit limit is exceeded;
• - You haven't made your credit card re-payments;
• - Problems with internet connection.

Assuming that your credit card doesn't get declined and you can make all the purchases you want, do not forget that you will have to repay the borrowed amount. Every month institution that issued your credit card will send you a bill. In the bill you will be able to see what purchases you have made and your balance due and the minimum amount, usually 3% of the outstanding amount that has to be paid.

Before you apply for a credit card:

• - Choose the right type of credit card for you;
• - Different cards have different features, for example, reward points;
• - Choose the right credit limit for you;
• - Make sure that there are not high monthly fees;
• - Take a look at your budget, decide carefully whether you will be able to make repayments;
• - Think what would happen if you lose your job or other sources of income - how will you make your credit card repayments?
• - Make sure that you fully understand terms and conditions of the credit card.

Tips for using your credit card

• - Make sure you don't miss your payments - remember, missed payments can make your financial situation difficult as well as negatively affect your credit score.
• - Pay off your credit card balance: although you can only make the minimum monthly payment it's better to pay off your credit card in full to avoid paying interest for carrying your balance from month to month.
• - Avoid purchasing very expensive things that you can't afford: having a credit limit may seem like you have extra money to buy expensive things, but do not forget that you will have to pay back the amount of money you spend.
• - Avoid having multiple credit cards: if you have multiple credit cards it can be easy to forget how much you have spend and when you have to make the payment for each card. To better keep track of your expenses it is highly advisable to have no more than 3 credit cards at the same time.

To be eligible to apply you must:

• - Be a resident of Singapore;
• - Be employed;
• - Have a regular income;
• - Meet the minimum income guidelines;
• - Be at least 21 years old;
• - Have a positive credit history;

Make sure you have all the necessary paperwork credit card issuer may ask you:

• - Proof of income - payslip, tax return report etc.;
• - Information about your current income and expenses;
• - Copy of your bank statement that shows your savings and other made repayments;
• - Passport or drivers licence.

Main types of credit cards:

• - Reward points: these types of credit cards gives you reward points that can be redeemed for gifts or other goods;
• - Cashback cards: you can get certain amount of money back, this depends on how much you have charged from your credit card;
• - Travel miles: these types of credit cards gives you mile points, which can be used to make travel related purchases, for example, plane tickets;
• - Petrol: these types of cards offer you to get petrol related benefits.

Fees and charges:

• - Application or processing fee: some credit card issuers may charge this fee when you sign up for a credit card;
• - Annual Fee: some credit card issuers may charge you with annual fee. Annual fee is set by the credit card issuer. Keep in mind that exclusive credit cards usually are design for people with higher income and such credit cards are more expensive;
• - Foreign Transaction Fee: this fee can be charged for transactions that are processed outside of Singapore;
• - Cash Advance Fee: if you withdraw cash from ATM machine you have to pay additional fee for the withdrawn amount;
• - Late payment Fee: you may be charged interest if you fail to repay money borrowed from the credit card.

Credit card minimum repayments

If you make only the minimum repayment on your credit card each month, you will pay more in interest and it will take longer to pay off your balance. Your monthly statement must give you information about how long it will take to pay off the entire balance by making minimum repayments.

Credit card interest rates

Credit cards tend to have higher interest rates than other forms of credit, and the rate can vary depending on what features the card offers. You are charged interest on all outstanding transactions if you don't pay your full balance each month.

If you have a credit card without an interest-free period, you pay interest either from the day you make a purchase or from the day your monthly statement is issued.

Unless you use a card that is interest-free and fee-free, buying items with a credit card will always cost you more than if you pay with cash.

If you are experiencing financial difficulties and can not make your payments:

• - Contact the institution that issued your credit card as soon as possible to work out a payment plan;
• - Seek for professional financial advise.

Attention!

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