If you are someone who has a decent credit score, you can easily apply for a credit card in Singapore. There are numerous banks and financial institutions that will be more than happy to offer you with a card that will be customised to meet your needs.
Getting a credit card is not difficult these days but managing one can certainly be a daunting task. As a credit cardholder, you will need to make sure that you use the card sensibly so that you can pay off its balances without any difficulty and also improve your credit score in the process.
Here are some tips that will help you in effectively managing your credit card.
These tips are both for people who already have a credit card, but have failed to manage it properly, and for those who have not yet used a credit card but are interested in applying for one.
1. Remember that a credit card is money, which is after all provided by the bank and you will need to pay off that money with commissions and interest. Therefore, you should spend only what you can afford to pay.
2. Keep the usage of the card under control and make sure that not too many expenses are paid for with credit cards. Also ensure that you keep all receipts for what you bought and then compare the same with your statement; this way you can also detect early, if there are any incorrect charges reflecting in your account.
3. Many banks today offer interest free periods on their credit cards, some as high as up to 51 days. Make sure to pay complete outstanding balances reflected in your monthly statement to enjoy interest free periods on your credit card.
4. It is much better if you make payments on the credit card before the deadline, and the calculation of interest charged on the bank will be a lower amount and avoid being charged late interest. Do the same for your other payments as well.
5. If you make payments by check and other bank transfers, be careful that the payment is made early enough, given that the bank takes 72 hours to process such payments and post the same on your credit card account.
6. In order to reduce your credit card debt, pay at least double the minimum required amount every month if possible so that you will be able to pay off your credit card balances in no time and will also be able to improve your credit score in the process.
7. Apply for transaction alerts and fraud alerts for your credit card. This way, each time your credit card is used, you will get a transaction alert detailing the place, time and the transaction amount that was paid using your credit card. You also have the option of setting transaction limits wherein, every time a transaction amount exceeds your set limit, the bank will verify the transaction with you first. This will help safeguard your credit card from unauthorized or fraudulent use.
8. Make payments for all the purchases i.e. the total outstanding balance of your card within the due date so that you will not have to pay a lot of interest for your purchases. For example, if you cultivate the habit of making complete outstanding payments on your statements, it will keep your credit card spends in check. You’ll think twice before splurging because you’ll always think about paying the full outstanding amount the following month. You’ll also enjoy additional perks such as interest free period on your purchases.
9. When calculating card payments, also take into account the extra fees and interest that will eventually be charged on the account, so that you can make sure that you have a fair idea of the amount that you will need to pay.
10. Examine your statement and make sure that the opening balance matches the previous statement; compare this balance with your receipts or vouchers. Also check if the annual fees, finance charges and other charges reflected in the statement are accurate.
11. Remember that if you want to file a dispute claim for any of the transactions, it has to be made within 45 calendar days from the closing date of your credit card statement and you will need to contact the bank. So remember that it is also necessary to retain all documents and evidence related to the handling of your card, as you will need to present the same at the time of filing a dispute.
12. It is important to check that that all payments were made in the previous period appear in the statement.
13. Consider whether you really need the additional services offered by the bank through the card as travel accident insurance, health care coverage etc. as these insurance covers may increase the minimum amount that you need to pay every month. If you do not need these services, you can cancel them by contacting the bank and then you can avoid those charges.
14. Do not use so many credit cards because you can lose control of what you spend with them, plus you will pay more as interest charged on the cards. Hence, it is better to use only as many cards as you can afford.
15. Do not neglect the expiry date of the card and make sure that you request for a replacement card before it expires. For example, if your card is going to expire in June, 2017, it is advisable that you request a replacement card by April, 2017 itself so that the replacement card will reach you before your existing card expires.
Disclaimer: This blog is solely for the purpose of creating general awareness about financial products and services available through banks/ other financial institutions in Singapore. For more details, please consult your financial adviser before purchasing.