With extraordinary promotional deals from credit card providers, it is not a surprise that credit cards are common in Singapore. Seeing all those exclusive welcome gifts, it can be tough to say no. 

But signing up for a credit card is a huge responsibility. It can make or break your current and future financial progress. Hence, you should be careful when applying for a credit card and spend more time considering your options much more thoroughly than buying a dress or shoe. 

If you are currently looking for a credit card to help ease your daily expenses, here’s a set of questions that you should ask yourself before making a decision. 

Why do you need a credit card?

When you look for a credit card, you should be certain of your choice. The approach you take by asking yourself a few important questions will help you in the long run. Here are some of the basic questions you should ask yourself. 

• What is the credit card for?

With this question, you will help yourself determine the use of a credit card in your life. You have to know the purpose of applying for a credit card to narrow down your choices and to get the credit card that best suits your lifestyle. Let’s say you spend a lot on groceries and online shopping, then having a credit card that rewards you for these spending can even earn you some money. Do not rush into the trend of owning a credit card merely as a mark of higher social status. You need to be able to use it practically. 

• Will you be able to commit to a monthly payment?

Credit cards offer an amount of loaned money. You have to remember that you are required to pay it off every month inclusive of interests (in the case of minimum monthly payment). Of course, the banks will check your financial background before approving the credit card. But it is also your duty to make sure that you will be able to pay at least the minimum monthly payments. Otherwise, it is you who will be bearing the late penalty rates. 

• Is there a great deal on the credit card?

Once you are sure of why you need the credit card and you can afford it, you can now look for the best promotional deals. Many credit card issuers market their cards with attractive rewards. You can have exciting welcome gifts in terms of cashback, gadgets and even instant rebates. So, take your time to consider your options. 

• How does this credit card benefit more than the others?

Before you finalise your decision, compare the card of your choice to other cards in the market. You can evaluate within the same bank or compare with other banks. As a sensible consumer, you have to know all the options available. 

What should you know before signing the deal for a credit card?

Once you are certain of the credit card that you are about to get for your daily use, it’s time to know everything about the credit card. These are some of the things that you need to be aware of: 

• Annual fee and annual interest rate

You will be committed to a fixed amount of annual fee. So, you have to be clear on the annual fee and interest rate. You can enquire the person in charge if there are credit card promotions that will offer either one or two years annual fee waived. If you are lucky, you can even get your annual fee waived for a lifetime. 

• Minimum monthly payments

You will certainly know if you are able to pay for your credit card every month with your salary. But you still need to ask your credit card issuer the lowest monthly payment you need to pay so you can budget your expenses accordingly. This is also to avoid any late penalty charges which will cause you to pay more. 

• Important terms and conditions

There are customised agreements depending on the type of credit card you intend to apply for. Thus, it is imperative that you question as much as you can on the terms and conditions. You can ask if you have any doubts and know if the terms will change in any condition. If changes can happen, then you need to know how you will be notified.

• Credit card limit

It is fairly easy to get carried away when you are buying things or paying for some services. You need to know if the need arises, will you be able to increase or decrease your limit. Remember, the more you use, the more you will have to pay. Make sure you are aware of the interest charges if you adjust your credit limits. 

• The lifespan of rewards and cashbacks

Every credit card will definitely earn you either rewards or cashbacks. It depends on the credit card issuer on determining the lifespan of your credit earnings. You need to clarify that when you are applying. You also need to know what happens after the rewards expire. Will you need to pay more or if there other ways to get more rewards. 

• Additional charges

In situations which you have lost your credit card, enquire if you need to bear any additional charges. Also, ask if there are any hidden charges in terms of currency exchange, rejected payments, and balance transfer fees. You need to be sure of the liability fees that you may need to pay even if you are not anticipating any of these situations.

Be a smart credit card holder

It is best when you go to a credit card issuer being prepared for everything. As much as these questions will give you clarity in your choice of credit card, it will also help you become a smart consumer.