Everyday Benefits of Credit Cards
Key Takeaways
- 1. If you do not pay off your outstanding credit card balance every month, interest charges and late fees are incurred.
- 2. Paying your credit card bills on time is crucial to building a good credit score, making it easier for you to get credit and qualify for loans.
- 3. When used wisely, credit card rewards can complement how you manage your finances to stretch your dollar.
Understanding the Difference Between Credit and Debit Cards
Credit or debit? That’s the question plenty of people ask themselves when making a purchase. But what’s the key difference between the two? The answer lies in where the funds for your purchase come from.
When you use a debit card, the funds come directly from your bank account. Credit cards on the other hand are tied to a line of unsecured credit from the bank, which you repay to the Bank over time with interest if you carry an outstanding balance after each billing cycle. However, for credit cards, if you do not pay off your outstanding balance every month, interest charges and late fees are incurred. The key is to make sure you’re always in control of your credit cards’ spend, not the other way around.
Make Big-Ticket Purchases Manageable
One of the biggest credit card benefits is that they make big-ticket purchases possible if you don’t have the funds on hand and can’t wait days or weeks until you do. Credit cards enable you to make the purchase first and either pay it off immediately once you have the money in your account, or over time through monthly instalments. We would like to caution that before making any big ticket purchase, it is essential that you assess whether you will be able to make the required monthly repayments.
Build a Good Credit Score
Paying your credit card bills on time is crucial to building a good credit score. According to the Credit Bureau Singapore (CBS), having a good credit score makes it easier for you to get credit and qualify for loans. Moreover, having a good credit payment history can also lead to faster lending decisions when it comes to borrowing from banks.
You can build a good credit score by following these tips:
- 1. Make your credit card payments on time
- 2. Pay off any outstanding balance each month
Credit Cards Make Payments Easy and Convenient
When used wisely, credit cards can provide added flexibility as an alternative payment option. This means not having to worry about having cash on hand.
For example, credit cards can be added to e-wallet platforms on your mobile phone to perform funds transfer, and make online purchases or tap to pay at physical stores.
Additionally, Singapore car owners can enjoy the convenience of credit cards to pay at electronic road pricing (ERP) gantries and even for parking at certain malls. Try it for yourself by setting up EZ-Pay using your Citi Credit Cards.
You can even consolidate your recurring payments through Citi PayAll and charge it to your Citi Credit Card. For a fee, use Citi PayAll to manage your utilities, rent, insurance premiums, education expenses, taxes, and more to earn rewards for every dollar of your bill paid.
Track and Control Your Spending with Credit Cards
The task of reviewing monthly credit card statements could be useful to examine everyday purchases and personal spending habits, especially if you’re setting up a budget. Even if you only have a couple of monthly statements, the figures provide a clearer picture of how much you spend on wants and needs. With the patterns noticed, budgets can be refined to be more realistic and therefore achievable.
Acting on the insights is the next step. If you’re looking to control your spending, consider updating the credit card’s transaction limit.
Let’s assume you are an avid online shopper and are prone to making impulse purchases on your credit card. As an extreme measure, you decide to set your transaction limit to discourage unplanned spending. Compounded by the credit limit you’ve set, the knowledge of an upper limit instils greater mindfulness on what and how you spend.
Benefit from Measures Taken Against Fraud
Although credit cards offer some protection against fraud through EMV chips, card activation and one-time password (OTP) generation, there’s more you can do enhance your security.
Setting a transaction limit is a good measure to safeguard yourself against credit card fraud. As fraudsters typically make large unauthorised transactions, a lower limit may prevent this from happening.
Citi Credit Cardmembers can enhance their protection against fraud from the convenience of the Citi Mobile® App. With a few taps on your mobile phone, turn on the Card Lock feature to temporarily prevent transactions for lost or stolen cards. You can also immediately report lost or stolen cards, reset your PIN, and authenticate transactions so you’re always in control of your purchases.
Enjoy Credit Card Rewards and Privileges
Finally, being a credit card holder often comes with exciting perks and promotions to indulge yourself in the occasional treat or even manage everyday spend.
Citi Credit Cardmembers privileges include a variety of promotions including deals on dining, shopping, travel, utilities, and petrol.
In addition to these rewards, Citi Credit Cards, like the Citi Cash Back Card and the Citi PremierMiles Card, also allow you to earn cash back or miles respectively. When used wisely, these complement how you manage your finances to stretch your dollar.
For example, cash back earned on the Citi Cash Back Credit Card is credited to Cardmembers in the next statement of account. Citi Cash Back Cardmembers can redeem their cash back1 conveniently via SMS or through the Citi Mobile® App. Find out how to redeem Citi credit card rewards here.
If you are an avid traveller, the Citi PremierMiles Card offers cardmembers complimentary airport lounge access worldwide, subject to terms and conditions. With enough Citi Miles accumulated, cardmembers could even redeem a free air ticket to top off a relaxing experience at the airport lounge before their flight.
Sign up for a Citi Credit Card to get rewarded today. Terms and conditions apply.
Disclaimers
1. Terms and Conditions apply. Read more here:
https://www.citibank.com.sg/credit-cards/cash-rebate/pdf/sms-redemption-terms-and-conditions.pdf
This article is for general information only and is not intended to be a forecast of future events nor a guarantee of future results and should not be relied upon as financial advice. All views and opinions are as of the date hereof, and are subject to change based on market and other conditions without notice. The article has no regard to the specific objectives, financial situation and particular needs of any specific person. It is neither an offer nor a solicitation to purchase, nor endorsement or recommendation of any products or services mentioned therein, and the products or services mentioned may or may not be offered by Citibank Singapore Limited, its related entities and their respective directors, agents and employees (together "Citigroup").
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