Shopping credit cards

Shopping may be merely a necessity for some people, but a popular leisure activity for others. Your favourite store sells the things you love. On the other hand, online shopping opens up a whole world of possibilities beyond the local stores whose products are so familiar. Whatever your attitude to shopping, and however you go about doing it, the fact remains that shopping is a major spending category for many Singaporeans. In this situation, the best plan is to have a credit card that rewards you for shopping or helps to reduce the cost of shopping, every day.

To find out which card is the best fit for you, think about both your shopping habits and the kind of rewards you would like. Here are some questions to ask yourself:

• How much do you typically spend on shopping each month or year?
• Is your shopping spread fairly evenly over the year, or is your expenditure very high in one or two months only?
• Do you do most of your shopping at one or two favourite stores?
• Is online shopping a major part of your shopping activity?
• Are you looking to reduce your shopping costs?
• Would you like to be rewarded with air miles, or other rewards points?

Armed with the answers to these questions, you will be able to decide whether you want a cashback shopping card, an air miles shopping card, a rewards points shopping card, or a card with a combination of these benefits. Your expenditure amount and pattern will tell you whether you need a card with no monthly cap on rewards (for big spenders, or those who like to splash out occasionally), or one with no minimum expenditure to qualify for rewards (for low to moderate spenders). Online shoppers, or loyal customers of a particular store, may want to choose a card which gives higher rewards for this kind of targeted shopping.

You will be able to choose one or more of the following types of cards, and many cards will combine two of these features as well as having other benefits:

• Cashback cards, which give a quarterly cash rebate on selected expenditure categories, as well as discounts
• Air miles cards, rewarding your purchases with frequent flyer points for a particular airline, or points which can be converted to air miles with a range of airlines
• Rewards points cards, where you earn reward program points which can be converted into shopping, entertainment or travel vouchers, cashback, air miles or merchandise

Select the one that delivers the best value based on how much you spend (a higher rate of rewards for higher spending, or no minimum qualifying spend for lower spenders), where you do your spending (locally, worldwide, at a particular store, online), and what kind of rewards you would like (cashback, discounts, air miles, rewards points).

Certainly. Having more than one card, each one focusing on higher rewards for a different type of shopping, may be the best way to maximise your benefits.

If you do have several cards, you will need to be well organised to know which card to bring out on which occasion. You will also probably want to choose cards with a low or no annual fee, or an annual fee which can be waived in return for a target amount of annual spending.

Cashback cards often allow you to qualify for instant discounts as well, especially on petrol, dining and Grab rides.

Air miles cards are likely to come with complimentary travel insurance and airport lounge access, and the more expensive cards with throw in an airport limousine service.

Rewards points credit cards could have free insurance to protect your purchases against loss, theft or accidental damage, or the possibility of the retailer refusing a return if you change your mind.

Both air miles and rewards points cards may offer thousands of sign-up or first purchase bonus miles or points.

Credit cards doubling as loyalty cards for a particular store may give free parking and exclusive sale previews. Cards focusing on department store shopping may also offer an interest-free instalment plan for repayments on large purchases.

Any type of shopping card may offer a sign-up or first purchase gift of cash or merchandise, a first year or two-year annual fee waiver, or membership of dining, hotel or golfing privilege programs.

Annual fees for the primary card can be anything from $0 to $500 or more, although cards with a shopping focus tend to stay in the lower price range. Some cards charge an additional fee for a supplementary card for a family member.

The higher the fee you are prepared to pay, the greater the potential benefits are for affluent spenders.

Cards charging an annual fee will often have the possibility of a fee waiver in return for reaching a specified annual card expenditure (e.g. $12,500).

Bear in mind that there are other possible costs associated with a credit card, such as foreign currency transaction fees, late payment fees, card replacement fees, and interest charges if you do not pay off your account balance on time.