What We Need to Know about Credit Cards
Somehow many Singaporeans prefer credit over cash. For Singaporeans with credit cards, they surely love credit cards because it yields different rewards and benefits. According to the Monetary Authority of Singapore (MAS), as of May 2015, there are 9, 721, 768 credit cards in circulation. In addition, there are about 1.58 million credit card users here.
MAS furthermore discovered that the average credit cardholders hold at least six cards each. This is a pretty good picture telling us that most people here use credit cards. People have asked questions: how many are too many or how many are too few? Experts will say that there is no required or average number a cardholder can hold but everything will depend on how we manage the accounts.
It is crucial that we know how to manage our accounts if we do not want to have a poor credit thereby destroying our good name and reputation in the financial industry. Here are some things that we need to know about our credit cards and hopefully it can help us manage our accounts:
- Does the number of credit cards we have affect our credit rating? We have to know that before we are approved of a loan or mortgage from any financial institution, they will take into consideration our credit score. The credit score is the bank’s way of gauging whether we are good payer or not. The credit rating includes our credit history, spending habits and annual income. Here, the score ranges from 1,000 to 2,000 (2,000 being the highest and 1,000 being the lowest). This means that if we have credit cards and pay it on time, it will help our credit score compared to those who do not have credit cards.
- More credit cards mean more rewards: Here, credit card companies entice people to sign up thru their rewards. Banks offer different credit cards to cater to the differing needs of consumers like travel credit cards and cash back credit cards. For cash conscious people, they will surely prefer cash back but for travellers, the travel credit card can give them travel related rewards.
- Managing cards: As mentioned earlier, the number of card really depends on how we are able to manage it. The only trick is to find a system that can help us pay our bills on time every month. For example, we can sign up for GIRO deduction. GIRO deduction will link our credit card account to our bank account and automatically deduct our monthly bills without the hassle of falling in line. We only have to make sure that our bank account has enough money to pay it all.