Rewards credit cards offer you points for your everyday spending, which can be redeemed for a range of flexible travel and lifestyle rewards such as air miles, dining, discounts at the supermarket, and more. Plus, a number of providers in Singpore offer tempting sign-up offers like free luggage or bonus cash credits if you meet certain spending goals.
Read on to find out what you need to know about rewards credit cards, including the key benefits and costs to consider.
HSBC Advance Credit Card
HSBC Advance Credit Card
Receive S$150 cash back or a Prestige 69cm Spinner Exp luggage
Offer ends 31 Aug 2020
Eligibility criteria, terms and conditions, fees and charges apply
HSBC Advance Credit Card
Apply today and enjoy 3.5% cash back on all purchases. No minimum spend required.
Principal Annual Fee: S$0 annual fee for 1 year (permanently waived for HSBC Advance banking customers) - S$192.60 thereafter.
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Rewards credit cards usually earn you points for every S$1 spent on eligible transactions. When you have earned enough points, you can redeem them for rewards such as travel, flight upgrades, gift cards, cash back and merchandise.
Most rewards credit cards also have higher standard interest rates and annual fees than other options, because it costs lenders money to offer a rewards program. This makes it important to compare the potential costs against the value of a rewards card so you can decide if the benefits are worth it.
The definition of an “eligible transaction” can vary depending on the credit card and rewards program, but it generally covers most of your everyday purchases, including spending at retail stores, supermarkets and petrol stations. Common exclusions are bill payments, cash advances, balance transfers, instalment payments and other account fees and charges including annual fees and late payment charges. Check the rewards program terms and conditions for a full list of exclusions so you know when you will and won’t earn rewards.
What rewards do credit cards offer?
The rewards you can get with a credit card depend on the card you choose and the rewards program. Some of the most popular reward categories include:
Instant shopping discounts
Taxi cab savings
Tickets to concerts and other events
How can I use my credit card rewards?
The steps required to use your points to redeem rewards varies depending on the credit card and the rewards program. But there are a few key factors to remember:
Account login. You must log in to your credit card account or rewards program account to make redemptions. Once you’re logged in, it’s usually a simple process of going to the “Rewards” section, then selecting “Use points” and following the prompts.
Required points. Every reward option available for redemption has a specific point value (e.g. 12,000 points for a S$50 gift card). This means you need to have at least this amount of points in your account to redeem your chosen reward.
Points-plus-pay. Some programs allow you to use a combination of points and money to redeem your chosen rewards. This gives you more flexibility if you haven’t earned enough points when you want to make redemptions.
Types of credit card rewards programs in Singapore
There are a variety of different rewards credit cards you can compare and choose based on the benefits you want.
Many credit card companies in Singapore have their own branded rewards programs for customers. These options allow you to redeem points for a variety of rewards, including frequent flyer points travel, merchandise, gift cards and credit on your account. Some credit cards with their own rewards programs are:
Many of these rewards programs also offer auto-redemption for specific rewards, such as cashback, gift cards or frequent flyer points. For example DBS has rewards program in conjunction with Singapore Airlines and Air Asia with DBS Rewards KrisFlyer Frequent Flyer Program,
Frequent flyer programs are traditionally designed to earn you points and other benefits when you travel with a particular airline, such as Singapore Airlines. There are two main ways you can earn frequent flyer points with a rewards credit card in Singapore:
Direct earn frequent flyer credit cards. These cards are linked with a specific frequent flyer program and rewards are added directly to your airline loyalty account. The frequent flyer programs that are linked to direct earn credit cards in Singapore such as the Krisflyer Rewards Credit Card linked to the Singapore Airlines and Air Asia.
Indirect earn frequent flyer credit cards. These rewards credit cards let you transfer the points you earn to many different frequent flyer programs from all around the world, giving you more flexibility if you fly with a range of airlines. Credit card reward programs that indirectly earn frequent flyer points include American Express Membership Rewards, Citi Rewards, DBS Rewards, UOB Miles Card and many more.
These types of rewards cards add credit or “cash” to your account when you meet certain spending requirements. Most cashback credit cards offer a percentage of your total spends as cashback, or provide a one-time cashback sum as an introductory offer when you apply and are approved for a specific credit card.
You can also get cash back through most of the frequent flyer, credit card and supermarket or retail rewards programs outlined above. Just choose the “cash” or “gift cards” category of your rewards program to see what options are available.
How to compare reward credit cards in Singapore
Comparing credit cards helps you find the features that suit your lifestyle while also keeping costs affordable. Below, you’ll find a checklist of things to consider when you are comparing reward credit cards.
Points per dollar. The more points you earn per dollar spent, the greater the potential value. A good rule of thumb is to look for a card that offers at least 1 point per S$1 for most transactions.
Point expiry and caps. Some credit card reward points expire after a certain amount of time, and some accounts have a limit on how many points you can earn in a month or year.
Bonus point offers. Reward credit cards often have sign up deals that give you hundreds or thousands of bonus points. Usually these offers require you to spend a certain amount of money on the card in the first few months you have it. As these offers only last for a limited time, they should only be considered after you have a clear idea of the type of card you want so that you can get the most value out of the deal and the rewards card you choose.
Points values. To work out the value of your rewards, consider how many points it would take to redeem. For example, if you need 12,000 points to get a S$50 gift card and your credit card has an earn rate of 1 point per S$1 spent, you would have to spend S$12,000 make a redemption. Breaking down the rewards like this can help you determine whether it’s worth your time and money.
Credit cards with the best rewards. Rewards programs often partner with retailers and businesses to provide you with a wider range of redemption options. You may also have the opportunity to earn bonus points when you shop with partner stores. Choose a credit card rewards program that has partnerships with your favourite brands and products so you can take advantage of these options.
Redemption limitations. Some reward programs have blackout periods when you may not be able to make redemptions. Check the fine print for this information and consider the impact it could have on you.
Annual fees. Most rewards credit cards charge an annual fee. The value of the rewards you earn should be equal to or more than the annual fee of a credit card.
Foreign transaction fees. Most credit cards apply a charge for transactions made overseas or with an international retailer online, usually worth 2% to 3.5% of the total transaction. Make sure you consider this fee before choosing a card – especially for any rewards card that offers more points for foreign transactions. You can compare cards with no foreign transaction fees with this guide.
Purchase rates. Rewards credit cards often have high standard interest rates. If you think you’ll carry a balance, consider how much interest your purchases will accrue and whether the rewards will outweigh the cost of your repayments.
Balance transfer rates. Some balance transfer credit cards also come with rewards. These cards allow you to move an existing debt to the new card and pay a low introductory interest rate on the balance. Usually, you won’t earn points for the balance that you transfer, and any new purchases will be charged interest at the purchase rate from the time the transaction is made. If you have credit card debt, it may be better to focus on paying it off completely before considering a rewards card.
Cash advance rate. If you use a rewards credit card for a cash advance transaction, such as getting money from an ATM, you will be charged interest at the cash advance rate, which could be as high as 22% p.a. Cash advances usually don’t earn reward points either.
Other fees. Rewards credit cards may come with a range of other fees, such as late payment and overlimit charges. Make sure you check these costs and factor them into your comparison so that you can choose a card that is affordable for you.
Rewards credit cards often come with a variety of additional features that can add value to the account you choose. Popular perks include:
International travel insurance
Airport lounge access
Purchase protection insurance
Extended warranty coverage
Price match guarantees
Will a rewards credit card work for me?
The value of a rewards credit card depends as much on the cardholder as the actual card you choose. A rewards credit card may be a great option if you don’t want the hassle of tracking too closely your expenditure in order to maximise for cashback or miles.
However, instead of making a definitive statement about whether or not reward credit cards are valuable, let’s take a look at the key factors that make them likely or unlikely to work for you.
A reward credit card could be worth it if you:
Pay off your credit card balance in full every month
Currently use a credit card on a regular basis
Have a clear idea of the type of points you want to earn
Are part of an existing reward program that could be complemented by a credit card (i.e. a frequent flyer program or shopping reward program)
Earn enough to pay a higher annual fee
Can regularly make use of the rewards or complimentary extras on the card, such as insurance
A reward credit card might not be right if you:
Have a lot of credit card debt
Often carry a balance on your credit card
Rarely use a credit card
Won’t be able to regularly use complimentary extras on the card
Can’t afford a higher annual fee
Are tempted to overspend in order to earn rewards
It’s worth noting that there are some exceptions to the guidelines above. If you can’t afford a high annual fee, for example, you might still get a lot of value out of reward credit card with no annual fee. On the other hand, if you regularly use a credit card but also have a lot of debt, it might be better to switch to a balance transfer or low interest rate credit card so that you get value out of paying less interest.
While rewards credit cards can be a useful way to get something back for your purchases, it’s important to remember that you have to repay everything (plus interest). By factoring in both benefits and costs when you compare reward credit cards, you can find an option that suits your needs.
Most rewards programs allow you to to view your points through an online account centre. Usually, you need a membership number or username and password to log in. Once you’ve logged in, you should be able to view your points and redeem them for the desired rewards.
I’ve redeemed a reward with my points, but I’ve changed my mind. Can I refund my points?
This will depend on the credit card, but generally, you can’t refund rewards or points once the transaction has been made.
What’s the difference between a tiered reward and a fixed reward?
Tiered rewards are rewards which typically earn you more for spending more, because the percentage of your rewards increases (up to a cap). A tiered reward could offer you 1% cashback for the first $250 spent and 3% for the next $250 spent. A fixed reward system will usually offer the same rate, regardless of the amount of a purchase.
What credit cards have the best rewards in Singapore?
In truth, there’s no one ‘best’ rewards card as what will work best for you will depend on your individual circumstances, and factors including the way you like to spend.
Which is better, cashback or rewards points?
Again, that’s up for you to decide. It’s important to shop around and, if rewards are a deal-breaker for you, a good starting point may be to look at the ‘Bonus Rewards’ for spending on a certain category.
Can I convert my points to frequent flyer points or rewards with another bank or program?
Some credit card reward programs allow you to transfer points to frequent flyer programs, including American Express Membership Rewards, DBS Rewards and Citi Rewards. Other reward programs such as the Kris Flyer Rewards Program lets you earn and redeem points with partnered airlines and organisations.
Read the terms and conditions or contact your rewards program provider directly to confirm where else you can earn and use your points.
How many points will I need for a particular item or flight?
The number of points you need depends on your credit card and the reward/s you want to redeem. For flights, most frequent flyer programs have a points calculator available on their website.
In regards to other types of rewards, most programs have an online catalogue that allows you to browse the rewards on offer and see how many points you need to redeem them.
How do I know which rewards program or rewards credit card is for me?
As a financial comparison service, we don’t recommend any specific products. Instead, we provide you with the information you need to make an informed comparison and decision. When comparing rewards credit cards, consider your spending habits to determine whether the rewards you’ll receive will outweigh the costs of the card.
Sally McMullen is Finder's credit cards and frequent flyer editor by day and a music maven by night. She's also one half of the Pocket Money podcast. Her byline can be spotted on Yahoo Finance, Dynamic Business, Financy and Mamamia as well as Music Feeds and Rolling Stone. Sally has a first-class Honours degree in Communications and Media Studies (majoring in Journalism and Professional Writing) from the University of Wollongong.
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