Credit cards offer a great way to earn rewards and bonuses from nearly all kinds of spending, from shopping sprees to buying groceries and even booking your next vacation. While the benefits are undeniable, it’s important to understand your card to avoid making unfortunate mistakes.
Below we outline five different credit card conditions or scenarios that users commonly overlook or misunderstand which can prevent them from truly maximising their credit card rewards.
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Last Minute Transactions May Not Count Towards Minimum Spend
Most (but not all) cashback credit cards come with a minimum spend requirement that cardholders must meet each month to access the high advertised cashback rates. While rebates of up to 10% are incredibly attractive, they’re not automatic. Failing to spend the necessary amount (which can range from S$500 to as much as S$2,000) usually means consumers earn just a base rate of just 0.25% – 0.3% on all spend. Advertised rates won’t matter if you can’t consistently meet a card’s minimum spend requirement.
Example of the Impact of Falling Below the Monthly Minimum Spend Requirement
| Amount Spent | Cashback Earn Rate | Total Cashback Earned |
|---|---|---|
| S$790 | 0.25% | S$1.98 |
| S$800 | 5.0% | S$40.00 |
| *Assumptions: Monthly minimum spend of S$800, all spending falls into rewards-eligible categories | ||
OCBC 365 Credit Card
OCBC 365 Card offers one of the best cashback rates for essentials on the market.
Pros
- 5% rebate on dining, 3% on groceries, transport, utilities, pharmacies, streaming services and EV charging
- Fee waiver with S$10,000 annual spend
- Up to 21.04% fuel savings at Esso and 22.92% at Caltex
Cons
- 0.3% rebate on general spend
- High S$800 minimum spend requirement
Even if you can confidently meet minimum spend requirements, there’s still a chance you’ll miss out on higher rates. This comes down to the timing of your purchases. Transactions are posted to an account several days after they actually take place due to processing and authorisation processes. Purchases made at the very end of a month, therefore, may not be posted until the next month – and will not count towards the current month’s minimum spend requirement. As a result, last-minute purchases aren’t likely to help a cardholder reach their requirement, and those who fall short (even by a few dollars) could end up losing out on a substantial amount of cashback.
Related: Best Cashback Credit Cards in Singapore 2024
Falling S$1 Short Can Lose S$33/Month in a Quarter System
Just like the timing of purchases can be crucial, so too is consistency – especially in a quarterly rebate system. In such structures, cardholders must hit a minimum spend requirement every month, for 3 months total to be eligible for rewards.
For UOB One Card, consumers can earn an incredible S$200/quarter, if they maintain S$2k spend for each of the 3 months. However, if a cardholder spends just S$1,999 for one of those months, they’ll fall into a lower tier and earn just S$33/month (S$100/quarter).
UOB One Credit Card
Maximum cashback for stable budgets.
Pros
- Good fit for budgets of at least S$2,000 per month
- Easy cashback on daily spend
- Gives rebates for paying bills
Cons
- Doesn't fit inconsistent budgets
- Annual fee
While the rewards for consistency are quite high, underspending by just S$1 once can lead to a hefty loss (S$33/month, or S$100/quarter). That being said, UOB One Card is an excellent fit for those with stable budgets, and actually offers higher cashback potential than nearly all of its competitors. If you opt for a card with a quarterly rebate system, take care to manage your spend closely in order to reap maximum rewards.
Supplementary Cardholders May Not Have Access to Cashback They Earn
There are many benefits to having a supplementary credit card. To begin with, they offer a great way for young adults (especially university students) to begin engaging with their personal finances under the guidance of their parents, who can monitor their monthly statements. Additionally, supplementary credit cards often are “free” or have deeply discounted annual fees.
Nonetheless, supplementary cardholders should be aware – while they can generally earn the same rewards rates, banks typically issue these rewards back to the primary cardholder’s account only. In other words, if you’re spending a great deal on your supplementary card, you’re actually helping the primary cardholder boost their rewards. This may be fine if you’re sharing the card account with a spouse or child, but it’s worth discussing beforehand to keep everyone in-the-know.
Related: A Basic Guide to Supplementary Credit Cards
Guests May Count Towards Your Limited Lounge Visits
In many cases, the best part of having a miles card is the associated travel perks. While the priciest cards tend to have the most benefits, there is an increasing number of options on the market that are both affordable and offer free airport lounge access.
The market forerunners, DBS Altitude Visa and Citi PremierMiles Visa, both offer two free visits per year. However, these visits may not stretch as far as you’d think. In both cases, bringing a guest is technically free, but counts as one of the allotted visits. If you travel with a companion, your perk will be exhausted just from one leg of your trip.
Pros
- Great for online travel bookings
Cons
- Those willing to pay an annual fee for more bonus miles
- Affluent travellers who are willing to pay a high fee for luxury travel perks
Citi PremierMiles Card
Best miles credit card for average consumers.
Pros
- Frequent traveler perks
- Low fees
- Flexible miles redemption
Cons
- Lacks luxury perks
- Not suitable for occasional travel
Related: 7 Money-Saving Hacks For The Savvy Traveller
Credit Card Rewards & Terms Can Change – A Lot
Recently, there’s been quite a bit of upheaval across the credit card landscape. When you apply for a card, you may feel fairly certain that its terms and conditions – as well as its rewards structure – will stay the same. However, this is not the case. Changes vary both in form and scope. For example, new transaction types may be excluded from earning rewards. Many credit cards have moved to exclude insurance payments and tax payments, for example, from earning rewards.
A more dramatic way in which cards change is through an overhaul of their rewards systems. A credit card’s advertised rewards rates, eligible categories (ie, dining, shopping, etc.), minimum spend requirement & more may shift. In some cases, updates can completely change what type of consumer is most likely to benefit from the card.
Ultimately, credit card terms aren’t set in stone. Keep tabs on your card to stay apprised of any changes, and don’t be afraid to reevaluate your card’s value if its terms and structure shift.
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Read More:
- 4 Expenses You Could be Earning Credit Card Rewards For But Probably Aren’t
- Currency Crunch — How to Make Use of Weakening Currencies to Further Your Travel Plans
- 3 Things to Consider When Choosing Your Second Credit Card
- 4 Tips for Using Credit Cards to Make Large Purchases You Can’t Afford
- Basic Guide to Credit Card Minimum Spend Requirements
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