However, in a time when we experience such convenience, making the choice of the right credit card becomes a much harder task. Not every credit card is the best option you can get. To make the most of your credit card, you need to ensure that you choose the right credit card. There are three things you need to look out for when choosing a credit card.

3 Things To Look Out For When Choosing A Credit Card

1. Cashback, Air Miles, Rewards

It is almost inevitable that you need to spend to get your necessities. So, why not make the best of your spending on necessities and exchange them for some perks by paying through your credit card?

Credit card providers offer a few types of perks: Cashback, air miles and rewards. The concept of cashback is simple. For every dollar that you spend via your credit card, you will get a percentage cash rebate from your credit card provider. The cashback percentage ranges from 5% to 10%. Air miles points can also be earned from spending. For every dollar you spend, your credit card provider will gift you some air miles. These air miles can be accumulated and used to exchanged for air tickets.

Apart from cashback and air miles, credit card can also help you earn rewards. Credit card rewards usually vary from provider to provider. For example, Citibank SMRT card lets you earn SMRT$ for cash rebate or vouchers for all your transport payments. You also do not have to pay the convenience fee charge for EZ-Reload Auto Top-up transactions.

To find the best-in-class credit card for cashback, air miles and rewards, you can use Moneyline’s comparison tool to compare credit card benefit across different credit card provider here.

2. Fees That You May Be Charged (Annual, Balance Transfer, Late Payment)

To cover the basic costs of their card business, banks do charge credit card holders some fees. Annual, cash advance and late payment fees are some of the common fees that most credit card providers charge.

Annual Fee

Annual fee is an annual membership fee for the use of the credit card and the supplementary card. Some credit card providers do waive away this fee if you make a few purchases on the card. There are also some credit card providers like DBS which offers waiver on annual fee in your first few years with them.

Cash Advance Fee

Credit card has the function of allowing you to withdraw cash from the ATM or over the bank counter. This is known as cash advance service. For each time you withdraw cash using the cash advance service, you will be charged 3% to 6% of the amount taken, subjected to a minimum amount. The cash advance fee is on top of the amount advanced.

Late Payment Fee

As the name suggests, the fee is imposed whenever you are late in making the minimum monthly payment by the payment due date.

Less cost translates to more value for you as a credit card holder. Finding the credit card provider that charges you the least fees will help you minimise your cost of ownership of using your credit card and thus, allows you to derive more value out of your credit card. Trying to find the best value for money card? Try Moneyline’s comparison tool.

3. How Your Credit Card Interest Is Calculated

Apart from the perks that come with credit cards, you also need to look out for the potential costs of credit cards. One of the most “deadly” cost of credit card is the interest rate. For banks, interest rate on your credit card is the bulk of their earnings from issuing cards. While banks do make some money from getting you to spend and charging you some fees, the earnings from fees is still much smaller than their earnings from interest rate.

In Singapore, the annual effective interest rate of credit card is in the range of 22% to 26% p.a., depending on your provider and type of credit card. This means that if you only choose to clear the minimum sum every month, you will incur the full 20+% of interest rate p.a.

Most consumers are unaware of how interest rates on your credit card is calculated by the banks. The total interest amount payable can be calculated using the following formula:

Total Credit Card Interest Payable = Balance x Daily Periodic Rate x Number of Days in a Billing Cycle OR Unsettled payment x (Annual Percentage Rate/365) x Number of days in a billing cycle

As a general rule of thumb, the higher the credit card interest rate, the less attractive the credit card is regardless of the types of benefits it can offer. However, there is one caveat. If you can pay off your monthly credit card bills on time, then credit card interest is less of a concern for you.

The post 3 Things To Look Out For When Choosing A Credit Card first appeared on Best Mortgage Singapore.

Credit is prevalent in our everyday lives nowadays. It is hard to find anyone without a credit facility these days, be it credit card, motor vehicle or mortgage loan. In the year of 2017 alone, over 1.4 million new credit applications were made. (Consumer Credit Index)

However, do you know 9 out of 10 credit applicants have not seen their credit report before?

It is important to start understanding and knowing what is in your credit report as most lenders will check your credit file to assess your credit worthiness prior to making a decision. Having a good credit plays a huge part in helping you to achieve the many milestones in life such as starting a business, owning your dream car or home. Some employers may conduct an employee credit health check on your credit report during the job application process. Thus it’s critical to make payments on time, all the time and make payment in full, always.

Your credit report is a record of your credit payment history compiled from banks and major financial institutions. Credit Bureau Singapore (CBS) supplements it with publicly available information such as bankruptcy data from the Insolvency and Public Trustee’s Office (IPTO).  The report will also indicate your credit score. A good credit score and credit repayment history will make it easier for you to obtain credit and qualify for loans.

So What Information is Displayed in Your Credit Report?

• Summary of your personal credit facilities, aggregate credit limits and indication of identity theft
• Account Status History– display of all the credit accounts you have with banks and financial institutions who are CBS members
• Previous Enquiries– shows a list of various lenders that have searched on your information and your own searches of yourself
• Default Records– reflects lenders who uploaded a default in a credit account, the product type, loan amount defaulted, outstanding balances and repayment status
• Bankruptcy Proceedings– information on the original order date and discharge date by IPTO
• Debt Repayment Scheme (DRS)– a voluntary and debtor-driven scheme by IPTO to assist debtors in repaying their debts over a fixed period of time
• Narratives– indicates involvement in Debt Management Programme (DMP) with Credit Counselling Singapore (CCS) and any amendments made to the information in the report
• Credit Score – a numerical expression based on the past payment history of credit or loan accounts to determine one’s creditworthiness
• Aggregate Outstanding Balances – outstanding balances are computed based on the amounts outstanding under your credit cards or other credit facilities

Not all of your information with the banks and lenders will be collected. Personal data like your income, telephone number, deposit amount and full address are excluded and are not displayed in your credit file.

How Long Does Information Remain on a Credit Report?

It is also important to be aware of the length of period where your information will be displayed on your credit report.

For example, a default record will remain on your report for 3 years from date of settlement of the debt. Hence it is very important to keep a consistent good payment behavior as any bad mark left on the report will not be able to be erased off overnight.

Start knowing what the lenders know about you today by obtaining a copy your credit report from CBStoday at $6.42 per copy. Don’t leave your credit reputation to chance and be in the know of your credit file!

The post How To Check Your Credit Score With Banks first appeared on Best Mortgage Singapore.