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YouTrip vs Credit Card

Is it better to use a credit card or a prepaid card like YouTrip? The answer is, it depends what you prefer.

American Express or YouTrip? Buying on credit or direct debit? Both credit cards and prepaid cards from digital banking service providers give you a way to shop for what you want, locally and overseas. But there are a lot of differences between these two options.

Let’s take a closer look at how credit cards and prepaid cards from digital banking service providers stack up.

Compare your payment options

FeatureDigital payments app with prepaid cardTypical credit card
ExampleYouTripUOB PRVI Miles Visa Card
InterestNo interest on spending25.90% p.a.
Account feesNo annual feesS$257
Late payment feeN/AS$90
Eligible spendingEveryday shopping at both online and POS terminalsEveryday shopping, some bill payments, cash advance transactions and balance transfers
Purchase limitUp to the maximum account balance, which is S$5,000 at the time of writing.Up to the maximum credit limit — subject to lending criteria and approval.
PaymentsInstant payment from the card balance3% or S$50, whichever is higher
Credit checkNot requiredRequired
Read more – YouTripRead more – UOB PRVI Miles Visa Card

How do you sign up?

How to sign up with YouTrip

To get started, simply download the YouTrip mobile app from the App Store or Google Play.

Step-by-step application process

  1. Get started by clicking Go to site on this page. Use our promo code FINDER5 to receive S$5 once you’ve successfully created an account.
  2. After you’ve signed up, a YouTrip card will be sent to you by mail within five to eight working days.
  3. Once you’ve received the YouTrip card, proceed to register and activate it on the YouTrip app.
  4. Upon card activation, you’ll be able to link your bank account to your YouTrip account so you can start topping up your YouTrip account.

Eligibility criteria:

  • Applicants should be aged 15 and above.

Required documents:

  • Singaporeans/PR:
    • NRIC
  • Foreigners residing in Singapore:
    • Singapore-issued ID (e.g. Work permit, S-Pass, long-term visit pass etc)
    • Proof of residential address (e.g a picture of your utility or phone bill)

How to apply for a credit card

The first step to applying for a credit card is to compare your options and select one that best suits your needs. You can either apply for a credit card online or by visiting a physical bank branch.

Do note that the application process, eligibility criteria and required documents differ between cards and issuers.

Step-by-step application process

  1. Compare the various credit card options available. Review their privileges, benefits and costs.
  2. Once you’ve decided on a card, you can begin your application on the bank’s website.
  3. Singaporeans/PR may prefill the application form with SingPass. Foreigners will typically need to input the various fields manually.
  4. Provide the required details and documents.
  5. Check that all information provided is correct and submit.

Eligiblity criteria:

  • Applicants should be aged 21 and above.
  • The minimum annual income typically stands at S$30,000 for Singapore Citizens/PR, and S$80,000 for foreigners.

Required documents:

  • For salaried persons with a fixed monthly salary:
    • Front and back of your NRIC
    • CPF Contribution History Statements for the latest 12 months
    • Latest computerised payslip in Singapore dollars
    • Latest Income Tax Notice of Assessment
  • For self-employed persons or commission-based employees:
    • Front and back of your NRIC
    • Latest Income Tax Notice of Assessment
  • For foreigners:
    • Valid passport
    • Employment Pass (EP or S Pass with at least 6 months validity)
    • Proof of address (typically dated within 6 months)
    • Latest computerised payslip in Singapore dollars, your latest Income Tax Notice of Assessment together with your latest 12-month CPF Contribution History Statement or a letter from your company certifying your employment and monthly salary in Singapore dollars.

Unlike credit cards, most digital payment apps and prepaid cards – including YouTrip – don’t require credit checks.

With credit cards, you need to fill in an online application that asks for a lot more details than most digital payment service providers. This is because all credit card applications require a credit check (where the bank or provider looks at your credit history). In addition, you’ll need to be at least 18 to 21 years of age.

Bottom line: It’s easier to sign up for a digital wallet and prepaid card compared to a credit card.

How much does it cost?

Most digital banking service providers don’t cost anything when you sign up and are free to use. In the case of YouTrip, you’ll need to make an initial deposit of at least S$20 before you’re able to activate your card and start using it.

As for credit cards, you’ll incur late payment fees if the minimum payment isn’t made on time. Most banks in Singapore charge a S$100 penalty on top of the snowballing interest rate you’d face when you roll over your balance.

How does YouTrip make money?

YouTrip and other digital banking service providers usually earn revenue by taking a small commission from the merchant through the payment network (e.g. Mastercard or Visa) whenever you pay with your card.

Although YouTrip doesn’t offer any paid plans at the moment, other competitors that provide a wider range of finance management features tend to charge a monthly fee for their premium plans. For example, Revolut charges S$9.99/month for its mid-tier plan.

Traditional credit cards have annual fees that range from S$0 to S$400 or more. Interest rates are the other major cost to watch out for, with ongoing rates that range from 24% p.a. to 28% p.a. You can also get cards that offer introductory 0% interest periods.

Bottom line: Digital payment apps and prepaid cards don’t usually cost you much and comes with fee-free limits for most of their services. Also, they tend to be upfront about potential fees and those costs are usually nominal.

Credit cards typically offer consistent details of costs because the interest rate stays the same no matter what you buy or when you pay (meaning you can calculate charges and repayments). They also have to provide a key facts sheet with details of all the main rates and fees. Considering these differences between digital banking service providers and traditional credit cards, we’ll call this one a tie.

Where can you use them?

Like traditional credit/debit cards, you can use the YouTrip card (as well as other prepaid cards) at any business that accepts payment by card, including with overseas retailers. In Singapore, most places accept Visa and Mastercard and a lot of places also accept American Express.

Bottom line: You can use both credit and prepaid cards at most places.

How much can you spend?

With YouTrip and other prepaid card providers, you’ll only be able to spend up to the maximum balance that’s stored on the card. Once the amount is depleted, you can reload more funds to the account online. For example, if you’ve S$1,000 in your YouTrip account, you can only use the card for purchases within that limit. Also, do note that you’ll only be allowed to hold up to S$5,000 at any one point due to the MAS’ Payment Services Act.

This is vastly different from credit cards. When you use a credit card, you’re borrowing money for your purchases and will be charged interest on what you owe – unless you clear the balance in full each month. When you’ve successfully applied for a credit card, you’ll be issued a credit limit – which usually ranges from S$500 to S$20,000, based on the bank or provider’s assessment of your application.

Bottom line: Credit cards allow you to spend up to your approved credit limit, which is typically higher than S$5,000 – more than the maximum amount you can hold with a payment service provider like YouTrip.

Other key differences between YouTrip and credit cards

These details might not be your first priority, but they are worth weighing up when you’re trying to decide if a credit or prepaid card is the better option.

🔎 Credit check

When you apply for a credit card, the bank or provider will check your credit history. This check is listed on your credit report whether you’re approved or not. That’s why it’s not ideal to apply for too many credit cards in a short amount of time.

In comparison, there is no credit check when you sign up for YouTrip, or other digital wallets for that matter.

Keep in mind that a credit check isn’t necessarily good or bad, but having a lot of checks and not much else usually won’t be seen in a positive light.

🗂 Building credit history

If you want to buy a home in the future or think you’ll want a loan for something else, your credit history will affect your chance of approval.

Most prepaid cards don’t add to your credit history or your credit score at all, which means they do nothing for your future borrowing power. All credit cards add to your credit history and credit score. So if you get a credit card and meet the repayment requirements, these details will be recorded on your credit report and can help improve your credit score – as well as your potential to get other loans and accounts in the future.

The flip side is that if you don’t meet the repayment requirements for the credit card, it could hurt your credit score. This won’t happen with, say, YouTrip and Revolut.

✈️ Rewards

If you want to get something back for your spending, keep in mind that most prepaid cards don’t offer their own rewards programs. An exception is Revolut, which offers 1% cashback on all card spending if you’re on the Metal plan (S$19.99/month). BigPay also offers 1 BIG Point for every S$5 spent on the BigPay card, which can be used to redeem for discounted AirAsia flights and other rewards.

Credit cards offer much more variety (and competition), with cards that earn points for travel and shopping, as well as cashback or gift cards.

Verdict: is it better to use a prepaid card or a credit card?

Let’s be real: there isn’t a one-size-fits-all solution to this comparison. It really comes down to how you’re shopping and making payments. So, here are some situations where one could work better than the other.

A prepaid card might be right if:

  • You want to avoid accumulating debt
  • You’re unable to meet the eligibility criteria to apply for a credit card
  • You want fraud protection for your purchases
  • You don’t want to pay any annual card fees

A credit card might be right if:

  • You want to know how much you can spend at any time
  • You want to build a good credit history
  • You want the option of paying off what you buy over a few months or longer, without worrying about late fees
  • You want an option you can use for unexpected costs, without being limited to certain retailers or other businesses

It’s easier to sign up for a prepaid card offered by digital payment service providers than it is to get a new credit card – and there are usually fewer costs involved. But credit cards give you more spending and repayment options.

If you’re still deciding between a prepaid card and a credit card, you can learn more about digital banks, or the best credit cards in Singapore.

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