Growing up, many of us would have heard from a relative or even seen an example of how borrowing money led to dire consequences. And we’re not just talking about borrowing from loansharks, we’re talking about the banks.
Most working adults are bombarded by credit card salespeople on adaily basis, from the day we start work, at MRT stations and kiosks. We recommend that you sign up for all the cards with them and go all out abusing these credit cards. We will skip all the motherhood statements, such as do not spend more than what you make and repay your credit card debts on time. We think people are more financially savvy now and would prefer not to be bankrupts.
What we are trying to say is that if you had the choice of whether to pay something in cash or with your credit card, your credit card should always be the choice.
Read also: How Much Should My Emergency Fund Be?
Earn higher interest rates on your deposits
OCBC 360 and UOB One accounts are deposit accounts, which comes with specific details on how you can accumulate more interest rate on your deposits.
One requirement is that we have to spend at least $500 on our credit card. For OCBC, the accumulated sum spent on one or a few credit cards has to be $500. For UOB, we must spend $500 on the UOB One credit card to qualify for the bonus interest rates.
By spending the additional $500, you will stand to earn a minimal additional 0.5% and 1.5% for OCBC 360 and UOB One per annum on your deposits. This might seem insignificant. However, if other requirements were met as well, we will stand to earn a maximum of 3.25% and 3.33% for OCBC 360 and UOB One account respectively per annum. This is a substantive amount for a savings account. So go ahead and rack up all your bills on your credit card, but make sure you’re racking the bills wisely so you’d qualify for the bonus interest rates.
Earn interest on money that you have already spent
Let us assume that we have $1,000 in our bank account earning 1% interest per month. On day one, we have to buy 2 shirts that cost $100 in total. If you were to pay for these 2 shirts in cash, the interest earned at the end of the month would be $9 (1% x $900). This results with us having $909 and 2 shirts
Instead, we use our credit card to pay for the shirts. The interest earned will be $10 (1% x $1,000) Resulting in us having $910 and 2 shirts, after paying the $100 at the end of the month.
By using the credit card to pay for the shirt, we have just earned ourselves an additional $1. Therefore, we will essentially be earning interest on money that you have already spent.
Earning rebates on the go (along with other perks)
There are multiple credit cards that provide us with different perks (such as “miles” for travel and higher petrol rebates). We will be talking about general rebates, as it provides the most tangible returns we can see in a month.
Using the same example above, adding that this credit card provides 3% rebate for apparel purchase. By using the credit card to make the purchase, we will have a total of $913 (3% rebate of $100 + 1% x $1,000) and 2 shirts.
This is just a very simple example to illustrate how we can both save and earn money by using credit cards. And by constantly doing this, we can boost our bank balances substantially over time.
Know your spending habits
By developing a knowledge of your spending habits (refer to our “Read also” link above for more information), you will be able to choose your credit cards more wisely and ensure that you will gain extra savings through your expenditures.
Have fun spending and budgeting, but more importantly have more fun “abusing” your credit cards.
Optimise Your Dollars When You Send Money Overseas
When we send money overseas to our loved ones, we often face high fees and unfavourable foreign currency spreads. Time is also an issue when it takes a few days for the money to be transferred.
Companies like InstaRem offer a convenient and faster way for you to transfer money overseas. With zero exchange rate margins and no hidden charges, you can make the most of the money you send overseas. For those that send money frequently, you can earn bonus InstaPoints for each transfer you make - this can be redeemed for future transactions.
DollarsAndSense Exclusive Promotion: Use the promo code DNS20 to receive an additional SGD $20 when you make an initial transfer of at least SGD $1,000.