<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>Dec 28, 2008
SMALL CHANGE
</TR><!-- headline one : start --><TR>Play your cards right
</TR><!-- headline one : end --><TR>Do not settle for a standard card with standard benefits </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Ignatius Low, Money Editor
</TD></TR><!-- show image if available --></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->
In the 10 years that I have worked at this newspaper, the question I have been most often asked is: How do I choose a credit card?
It may seem an inappropriate question these days when people are spending less, not more, in the face of recession.
But people use credit cards in good times and bad. And when times are tough, they want to get even more value-for-money from the cards that they sign up for.
Many people continue using the first card they signed up for when they started work, or the one their bank issued them free.
But with the credit card market as intensely competitive as it is, there is really no excuse for settling for a standard card with standard benefits.
The problem, of course, is that in Singapore, there is a mind-boggling array of cards to choose from - all toting their own long list of privileges and rewards.
How does one even start sifting through what's on offer?
The first thing I tell people is that to get the best deal, they need to start by looking at the cards that they are currently using.
If you are using a card that you signed up for more than five years ago, you are probably no longer getting the maximum benefit from it.
That's partly because of the economics of launching a credit card in today's market. A new card is only viable if there are enough sign-ups. And to entice enough customers to ramp up the numbers, banks always need the best rewards and privileges for the card's launch.
This is why many newly launched cards come with benefits and discounts that quietly expire after a year or two. Some customers notice and switch to even newer cards, but many others don't and keep using them even though the value proposition of these cards has fallen.
Okay, so assuming you are ready to sign up for a new card (or ditch your old one), how do you assess what's on offer?
A key question you need to ask yourself is whether you are the type of customer who can bother playing the 'rewards game'. That means keeping track of how many points you have and what you can redeem them for.
Some people just have no patience for this. For them, the best option is to go for cards that offer 'cashback' or cash rebates.
The concept is simple: The issuer gives you a fraction of what you spend back in cash. So you use your card, and at the end of each month or quarter, you get a cheque.
There is, of course, a price to pay for such convenience. The rebate rate is often very low and it's not uncommon to get several times what you would get in cashback schemes if you opt for a more traditional rewards programme.
So how do you get the best out of rewards programmes?
I like to think of it as an equation, with 'input' at one end and 'output' at the other.
You want to maximise both the 'input', which refers to how much you have to spend to earn the rewards points, as well as the 'output', which is what sort of rewards you get.
There are many cards now that give you double or triple points, which simply means you earn a reward two or three times as quickly.
A small number of cards give you double points on all spending. But once you get to higher multiples of points, the card issuer tends to limit either the stores that you can earn extra points from or the type of rewards you can claim.
I use a combination of two cards to maximise the 'input' of my equation.
The Citi Premier Miles card is where I put the bulk of my spending because it gives me triple points.
But because I buy books and CDs so often, I have a Citi Clear Platinum Visa, which gives me five times the points at all book and music retailers here.
This way, I reckon I'm earning points at least three times as fast as the average card user.
One of my friends, who puts all his corporate spending on his own credit card, is a classic case of someone who benefited dramatically from switching cards.
After he switched to a card that gave him triple points, he redeemed a business class flight to London in just eight months. Otherwise, it would have taken two years.
The 'output' side of the equation is more straightforward.
All good card issuers have top- notch rewards programmes with long lists of items and vouchers for which you can redeem using your points.
If you often shop at a particular retailer, say Ikea, it may be worth looking through different bank rewards catalogues and choosing a card that offers redemption vouchers there.
But I want to make special mention of redeeming air miles. This is topical as a number of cards were launched earlier this year that offered multiple points but restricted redemption of these points only to air miles.
Air miles, as a credit card reward, fell out of favour a few years ago with the advent of budget airlines. Cheaper flights meant that free flights redeemed with air miles became less desirable.
But higher fuel surcharges in recent times have made the price difference between traditional and budget flights less stark. And people have found they still prefer traditional flights for longer trips.
I myself have found air miles particularly invaluable for booking flights at the last minute, when prices are high in any case.
Whatever your preferences, my point is simply that you should spend some time looking at both the 'input' and 'output' sides of the equation. Don't just settle for the bog standard deal.
Of course, there are many other principles to abide by to get the most out of your credit cards.
It always pays to consolidate spending on one or two cards. With more points concentrated on one card, you can redeem a wider range of rewards. You also avoid paying unnecessary membership fees on duplicate cards you don't need.
Never roll over credit card debt to the next month unless it is absolutely necessary, because interest charges can add up. And keep a close eye on those payment deadlines to avoid fines and charges.
Any of this unnecessary expenditure will easily outweigh any benefit you might have earned from carefully husbanding your rewards and privileges.
But most of all, use credit cards wisely, especially in an economic downturn like this.
If you play your cards right, you can make them work a lot harder for you.
[email protected] <!-- end of for each --><!-- Current Ratings : start --><!-- Current Ratings : end --><!-- vbbintegration : start -->
SMALL CHANGE
</TR><!-- headline one : start --><TR>Play your cards right
</TR><!-- headline one : end --><TR>Do not settle for a standard card with standard benefits </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Ignatius Low, Money Editor
</TD></TR><!-- show image if available --></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->
In the 10 years that I have worked at this newspaper, the question I have been most often asked is: How do I choose a credit card?
It may seem an inappropriate question these days when people are spending less, not more, in the face of recession.
But people use credit cards in good times and bad. And when times are tough, they want to get even more value-for-money from the cards that they sign up for.
Many people continue using the first card they signed up for when they started work, or the one their bank issued them free.
But with the credit card market as intensely competitive as it is, there is really no excuse for settling for a standard card with standard benefits.
The problem, of course, is that in Singapore, there is a mind-boggling array of cards to choose from - all toting their own long list of privileges and rewards.
How does one even start sifting through what's on offer?
The first thing I tell people is that to get the best deal, they need to start by looking at the cards that they are currently using.
If you are using a card that you signed up for more than five years ago, you are probably no longer getting the maximum benefit from it.
That's partly because of the economics of launching a credit card in today's market. A new card is only viable if there are enough sign-ups. And to entice enough customers to ramp up the numbers, banks always need the best rewards and privileges for the card's launch.
This is why many newly launched cards come with benefits and discounts that quietly expire after a year or two. Some customers notice and switch to even newer cards, but many others don't and keep using them even though the value proposition of these cards has fallen.
Okay, so assuming you are ready to sign up for a new card (or ditch your old one), how do you assess what's on offer?
A key question you need to ask yourself is whether you are the type of customer who can bother playing the 'rewards game'. That means keeping track of how many points you have and what you can redeem them for.
Some people just have no patience for this. For them, the best option is to go for cards that offer 'cashback' or cash rebates.
The concept is simple: The issuer gives you a fraction of what you spend back in cash. So you use your card, and at the end of each month or quarter, you get a cheque.
There is, of course, a price to pay for such convenience. The rebate rate is often very low and it's not uncommon to get several times what you would get in cashback schemes if you opt for a more traditional rewards programme.
So how do you get the best out of rewards programmes?
I like to think of it as an equation, with 'input' at one end and 'output' at the other.
You want to maximise both the 'input', which refers to how much you have to spend to earn the rewards points, as well as the 'output', which is what sort of rewards you get.
There are many cards now that give you double or triple points, which simply means you earn a reward two or three times as quickly.
A small number of cards give you double points on all spending. But once you get to higher multiples of points, the card issuer tends to limit either the stores that you can earn extra points from or the type of rewards you can claim.
I use a combination of two cards to maximise the 'input' of my equation.
The Citi Premier Miles card is where I put the bulk of my spending because it gives me triple points.
But because I buy books and CDs so often, I have a Citi Clear Platinum Visa, which gives me five times the points at all book and music retailers here.
This way, I reckon I'm earning points at least three times as fast as the average card user.
One of my friends, who puts all his corporate spending on his own credit card, is a classic case of someone who benefited dramatically from switching cards.
After he switched to a card that gave him triple points, he redeemed a business class flight to London in just eight months. Otherwise, it would have taken two years.
The 'output' side of the equation is more straightforward.
All good card issuers have top- notch rewards programmes with long lists of items and vouchers for which you can redeem using your points.
If you often shop at a particular retailer, say Ikea, it may be worth looking through different bank rewards catalogues and choosing a card that offers redemption vouchers there.
But I want to make special mention of redeeming air miles. This is topical as a number of cards were launched earlier this year that offered multiple points but restricted redemption of these points only to air miles.
Air miles, as a credit card reward, fell out of favour a few years ago with the advent of budget airlines. Cheaper flights meant that free flights redeemed with air miles became less desirable.
But higher fuel surcharges in recent times have made the price difference between traditional and budget flights less stark. And people have found they still prefer traditional flights for longer trips.
I myself have found air miles particularly invaluable for booking flights at the last minute, when prices are high in any case.
Whatever your preferences, my point is simply that you should spend some time looking at both the 'input' and 'output' sides of the equation. Don't just settle for the bog standard deal.
Of course, there are many other principles to abide by to get the most out of your credit cards.
It always pays to consolidate spending on one or two cards. With more points concentrated on one card, you can redeem a wider range of rewards. You also avoid paying unnecessary membership fees on duplicate cards you don't need.
Never roll over credit card debt to the next month unless it is absolutely necessary, because interest charges can add up. And keep a close eye on those payment deadlines to avoid fines and charges.
Any of this unnecessary expenditure will easily outweigh any benefit you might have earned from carefully husbanding your rewards and privileges.
But most of all, use credit cards wisely, especially in an economic downturn like this.
If you play your cards right, you can make them work a lot harder for you.
[email protected] <!-- end of for each --><!-- Current Ratings : start --><!-- Current Ratings : end --><!-- vbbintegration : start -->
