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Credit Card Rules and Tips – for healthy pockets

Well for the past 2 years of my life, working in a bank and spent out an amount of time researching on credit cards. My personal belief is that credit cards are awesome so long as you dont break the RULES below. Note these are not guideline, they are rules to keep you debt free and save you tons of $.

The Golden Rules

1) Always waive the annual free. – Put a recurring event in your calendar – you need to do this once a year. waive the free or trash the card. No card its worth paying for. If you used the card frequently, they will definitely waive your fee as each time you use your card the banks actually take in 1-2% of the amount transacted.

2) Never ever roll your credit limit – If you got no money, dont spend it credit card interest at 24% per  annum are almost as good as loan shark.

3)Request for wavier if you forgot to pay – There are times when we just happen to forget to pay our bills, always call up to the bank be nice to the contact center folks and request for a interest and late-payment wavier. If you dont do it too often, they will definitely waive it.

4) Never be late on payments – Remember that credit card are like bloodsuckers, they will cash in on you automatically whenever you are late on payments.

5) Use the card that gives direct discount – Some cards gives a direct discount during payments, these are usually the best card to use for that specific payment.

The Golden Tips - guidelines to make better use of credit cards.

1) Use them often. Credit cards can save you money, make use of them whenever you can – even in MacDonald.

2) Choose the right card and spend with the right card. Different cards have different purpose, banks love doing this so that you own multiple cards and forget the rules of maximizing the rebates/discount etc.

3) Read the fine print. There are several cards out there in the market that boast nice rebates IF you meet the minimal criteria . 

4) Travel in style. There are cards that provide a limo service to airport and even insurance for overseas trip, If you book using that card under certain conditions. 

5) Sub-card. This is perhaps one of the best perks for married couples. The combine spending power of 2 person often allow you to meet the minimal criteria stated in the fine print to maximize various rebates.

 What card to use?

Now here’s the fun part, im gonna share some of my favorite cards that helps save your pocket.

1)The Best Card for Early 20s – Frank by Ocbc

  • The Perks: 6% rebates for online purchases and nets flash pay
  • The Catch -1 : minimal spending of $500 per month.
  • The Catch -2 : rebates capped at $60 per month.

When to use it? Budget Holiday trips . This is THE CARD to use for budget holiday trip At 6% rebate, and a max rebate capped at $60 that means you can spend up to $1000 on this card for your budget holiday trip. Anything beyond $1000 is not worth it! Yes that means booking your scoot tickets to Taiwan and all the budget hotels.

2) The Best Rebates Card – UOB ONE CARD

  • The Perks: up to 3.33% rebates.
  • The Catch: $30 for $300 spent consecutively for the next 3 months. Say if you spend $800, $300 and $800, you will still get $30 bucks back…do the simple math thats not 3.33%.

3)The Petrol Card – Citibank Dividend

I only use this card on Petrol at Shell or Esso gives about 18+% discount and rebates. There might be some other better cards out there but its all around the 18+% zone.

4) Miles Accumulator Card – ANZ Travel Card, UOB Privi, UOB Preferred Platinum (AMEX), UOB Preferred Platinum(Visa), Citibank Premier Miles

I am mile junkie and I will explain why later. But the above miles cards are the cards I used most often when im not paying for petrol.

  • ANZ – 1.4 miles per $1 dollar spend
  • UOB Privi – 1.6 miles per $1 dollar spend
  • UOB Preferred Platinum (AMEX) – $ 4 Miles per $1 dollar spend (only food)
  • UOB preferred platinum (Visa) – $4 Miles per $1 dollar spend  (online shopping and Visa Paywave)
  • Citibank – 1.2 miles per $1 dollar spend

The Catch: Quite a few on the miles card stated above require income that you probably not hit if you are a fresh grad.

Obviously, the more miles per dollar the better. Hence, I use the cards selectively – whenever there’s a chance for 4 miles per dollar hop on it and don’t look back.

Miles: What the heck are them and what do I do with it?

Miles or more correctly known as travel miles when accumulated enough can be converted to air tickets. Are these air tickets really worth it compared to immediate rebates? Well lets do some math! Some assumption:

  1. Only long haul flights to be considered – if its a short flight just grab a budget airplane using frank.
  2. Krisflyer miles are being used – its the best airlines right pamper yourself for long haul flights.

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So…..

70000 Miles worth about $1380

1 Mile = 0.0197 Cents

  • 4Miles/Dollar, to get 70k miles you will need to spend $17500. And a rebate of $1380 is almost 8%
  • 1.6 Miles/Dollar, to get 70k miles you need to spend $43750 which is a rebate of about 3.1%
  • 1.4 Miles/Dollar, to get 70k miles you need to spend $50000 which is a rebate of about 2.76%

Why I Choose Miles over rebates:

  1. At 4 Miles per dollar the rebate is unbeatable.
  2. At it’s best, the best rebates card gives 3.33% and you need to watch how much you spend
  3. Miles card have no minimal spending requirement to get those perks.
  4. If you spend smart enough, the return of miles should be close to 4-5%.
  5. Mile cards lets you travel in style – free limo rides, free insurance, free lounge.

FAQ

  1. Doesn’t it take very long to accumulate enough miles to change an air ticket?
    • Yes it does and worse part some cards have expiry dates on miles. However there are tricks to beat the system.
    • Miles/Points on cards typically have a 3-5 years lifespan. Miles stored on Krisflyer system have 3 years before they expired.
    • combine them, you will have 6 to 8 years to accumulate the miles before they expire.
    • Remember my point about sub card? Once you are married, your expense effectively doubled – your miles accumulation rate should double too.
  2. But you are using different cards from different banks?
    • Yes different card from different bank, but at the end of the day, I convert them into Krisflyer miles so it doesnt matter which bank the card comes from.
  3. What things do you pay with your miles cards.
    • Insurance bills, telecom bills, donation, etc etc. Almost everything that can be paid with credit card I will.
    • Sole exception belongs to petrol.

I started the miles journey somewhere in the middle of 2014 and today I have about 50000 miles accumulated. Just 20K till my free ticket to Paris. Assuming 2.5 miles per dollar thats a spending of about $800 per person per month over the last 12 months. PS its probably less than that – i gotten at least 6K free miles from various 1 off events. AMEX Krisflyer still gives 5K miles for first time sign up even today.