How I Use Credit Cards To Better Manage My Finances

Credit cards are great tools for me to better manage my finances. There is ease of tracking my expenses as there is always a record of my spending. I also use credit cards to get bonus interest on my savings plus get rewards in the form of cashback and miles.

In this post, I will share the credit cards I have and how I use them in the right way to maximise the benefits. Let's begin.

1. Standard Chartered Unlimited Card & AMEX True cashback card

The first card I have is the SCB unlimited card. This card is straightforward to use as it just gives 1.5% cashback on all spending. There is no minimum spend and no cap to the cashback given. I use this for most of my spending to make sure I get cashback on every single cent I spend on. I seldom use cash to pay for anything now unless the shop does not accept credit cards which is rarely the case now.

Another good cashback card is the AMEX True cashback card which also gives 1.5% cashback. AMEX has good perks and their customer service is top notch. Many offers they have linked up too for their customers.

You can apply for both the SCB Unlimited and AMEX True cashback card here.

*Get 1 Year LiveUp subscription + 3 x GuavaPass classes + $50 Takashimaya vouchers on approval for both cards above


2. American Express Singapore Airlines Kirsflyer card

This is a new card which I got as AMEX offered the card to me in exchange for my previous AMEX true cashback card. The previous true cashback card is similar to the SCB unlimited card so I opted for a switch to this krisflyer card instead to try earning air miles.

Maybe you've heard of miles card or you have not heard of it. Initially, I was confused on how miles card work too but after some searching, I begin to understood it better. Its true when people say miles card earns better rewards as compared to cashback card. For this AMEX krisflyer card which I have, it earns 1.1 miles per $1 spend. There are also some spend which earns 3.3 miles for every $1 spend such as on Grab and Uber.

Miles can be exchanged for free air tickets as well as purchase upgrades. You can apply for this card here. You can get 5000 free bonus miles on your first spend (any amount) and first year annual fee waiver.


3. Safra DBS Credit Card

The third card I have is the Safra DBS credit card. There is 3% cashback on groceries, all online spend and also all contactless payment. The only issue here is you can only get this card if you're an existing Safra member. I applied for Safra membership during my NS days so I still have the membership until now. There is no annual fees for this card as long as you remain a Safra member which is not expensive to be one. Its just $270 for a 10 year membership but of course you have to be an NSF or NSmen in order to apply for membership.

You can apply for this card here.

Paying my credit card bills to get higher interest on my savings

After all the spending I have on my 3 credit cards, I pay all the bills in full every month using my OCBC 360 account. With the salary credit plus the 3 credit card bill payment, I can get 1.50% interest on my savings. This is what I do to get close to $100 every month on interest alone.

Bonus Card: UOB Yolo Card

There is another card which I think is good for those who frequently eats out or enjoys spending on entertainment. This card gives 16% rebate on dining and entertainment on weekends. You can also get 3% rebate on online, fashion and travel spend.

You can apply for this card here

In collaboration with Singsaver, they are also giving away one year LiveUp subscription plus 3 Free complimentary Gym classes from GuavaPass. For the gym classes, you can choose from Yoga to Kickboxing, Spinning to Dance, CrossFit to Pilates!

You might ask what's LiveUp subscription? It is actually a membership programme started by Lazada and Redmart together with other online services. You can get discounts and special deals from Lazada, Taobao, Redmart, Uber, Ubereats and the membership even included a 6 months subscription of Netflix. This promo applies to the SCB Unlimited card, AMEX True cashback card, UOB Yolo card and some other cards as well. You can check out the cards available here.


Credit cards have worked well for me so far. I will always pay my bills on time to avoid the high interest and the late payment fees. I did miss my payments once and was charged a late fee but just one call and they waived the fees for me. If we really cannot pay up, the fees are really high so it is important to control our spending if we were to use credit cards. Never spend any money which you are not able to afford. This will get you into more trouble than what you could imagine.

However, when used wisely, credit cards can be a good tool to better manage our finances.

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1.55% Interest On The Singapore Savings Bond

I have been monitoring the Singapore Savings bonds for quite some time now since its launch in 2015. The interest was not that attractive to me in the past until now when I notice the first year interest for this month's SSB is at 1.55%. This is higher than most fixed deposits currently and definitely a good place to park extra cash in.

The attractiveness of the SSB

What is so attractive for the SSB is that it is capital guaranteed so there is no risk of losing your capital. There is also the flexibility to redeem the bond every month so we do not have to lock in our money inside for one year like what is required for fixed deposits. This presents a very good opportunity to get higher interest while still maintaining the flexibility for our money.

The below table shows the interest for February 2018 SSB which will be issued on 1st Feb 2018. As we can see, the 1st year interest is already at 1.55% and if we keep our money inside longer, the interest steps up as well.

Details and buying the SSB

Some details of the SSB are as follows:

• The 1st interest payment will be made on 1 Aug 2018, and subsequently every six months on 1 Feb and 1 Aug every year. 

• You can invest a minimum of $500, and in multiples of $500 up to $50,000 for this issue. The total amount of Savings Bonds held across all issues cannot be more than $100,000.

• Application starts from 2 Jan 18 and closes on 26 Jan 18 (9pm)

• Apply through DBS/POSB, OCBC and UOB ATMs and Internet Banking, OCBC Mobile Application from 7.00am - 9.00pm, Mon - Sat, excluding Public Holidays. On 2 Jan 2018, these channels will be open from 6.00pm to 9.00pm. CPF and SRS funds are not eligible.

How to redeem the SSB?

As mentioned earlier, there is a flexibility of redeeming the SSB every month just in cash you need the money. Similarly to buying the SSB, you can also redeem the SSB through the DBS/POSB, OCBC or UOB ATMs, or online through DBS/POSB’s Internet Banking portal. 

The redemption period opens at 6pm on the 1st business day of each month and closes at 9pm on the 4th last business day of the month. Redemption proceeds will be paid by the end of the 2nd business day of the following month.

Do note that the SSB pays interest every 6 months. If you redeem your bond when there is a scheduled interest payment, you will receive the scheduled interest together with your redemption amount. If you redeem before the scheduled interest is paid, you will receive a pro-rated amount, called the accrued interest, which is the interest you have earned but have not been paid. In essence, even if you redeem the bond early before the interest payment, you will still get pro-rated interest. 

I will be investing some of my money in the SSB for this month as the interest is quite attractive. Nowadays, the stock market valuation has been quite high and I will be looking to re-balance my portfolio to sell some of my stocks which are already overvalued. 

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Beware Of Mortgage Reducing Term Insurance From Private Insurers

When we buy an insurance policy, we hope that we can activate the policy and make claims when situation arises. However, there are times when we realise that actually the insurance we buy cannot be claimed as fast as we hope for or could not be claimed totally at all because of some terms and conditions which were not made known to us when we had bought the policy.

It has been brought to my attention that the reducing term insurance from AIA is not easily claimable in the event of total permanent disability (TPD) or even terminal illness. I'm not sure if this is the case for other private insurers but in this post, I will focus on the reducing term insurance from AIA and its limitations. This is shared based on my own experience claiming for the benefits of this policy and the policy contract which I have managed to obtained. 

If you're using CPF to pay for your HDB flat currently, it is compulsory to be insured under the home protection scheme (HPS). You can opt out of the HPS if you have other term insurance from private insurers to cover your mortgage in the event if something happens. The HPS is a mortgage reducing term insurance to cover your outstanding mortgage on your HDB flat in the event of death, TPD or terminal illness. 

This mortgage insurance takes 2 years to payout for TPD

Some people would buy a private term insurance and opt out of the HPS as premiums are normally cheaper for private insurers. However, it is important to note the fine prints as it can be difficult to claim. I will take the AIA reducing term insurance as an example and have reproduced the policy summary of the product benefits below:

AIA reducing term insurance contract in 2017

The first image is the old contract from AIA for its decreasing term insurance which was bought back in 2003. The second image shows the new contract which is obtained in 2017. If you notice, the contract terms are the same. The red box in the image above shows the total and permanent disability benefit. If you notice, 10% will be pay out on the first policy anniversary and the policy can only pay out the full insured amount at the second policy anniversary as indicated by the green line. This means that if you are claiming for this policy due to TPD, you have to wait as long as 2 years before you can get the payout. 

The problem is if you have an outstanding mortgage which cost thousands of dollars a month and you had some illness or accident that caused disability, most likely you will not be able to work and lose your income. Your family remembered you had this mortgage reducing term insurance but only to find out that they have to struggle to continue paying for the outstanding mortgage for another 2 years before they can claim from this policy. This is going to cause a lot of problems later. 

Is HPS a better choice if you own a HDB?

For the HPS, which is a mortgage reducing term insurance administered under CPF board, it might be a better choice for HDB flat owners. If you own a private property, you'll have to get a term insurance from a private insurer so make sure you check the terms and fine prints before you purchase one. The term insurance I bought from Aviva doesn't need to wait for the second policy anniversary to payout for TPD. It just need a standard 6 months continuous TPD to claim for the benefit and the assured sum will be paid out in one lump sum. 

Back to those who own a HDB, the HPS protects us and our families against losing our HDB flat in the event of death, terminal illness or total permanent disability. The HPS does not payout in cash like how private term insurance does. The HPS will offset whatever outstanding mortgage loans instead. The claim criteria has also widened where CPF members with terminal illness and total permanent disability but are still able to work will qualify for claims under the Home Protection Scheme (HPS) and Dependants’ Protection Scheme (DPS), after Parliament passed changes to the definition of “incapacity” under the CPF Act on 29 February 2016. This was also reiterated by Mr Lim Swee Say, Minister of Manpower, on 8 May 2017 in a written reply to a question in parliament. 

No matter what, having a mortgage term insurance which can only payout in full in 2 years is really a long time. Most TPD benefits just require 6 months of continuous permanent disability to claim the benefit. I am disappointed that the AIA reducing term insurance can only payout fully on the second policy anniversary. If you're considering to get a mortgage insurance for your property, do take note of the contract policy. If you already have a mortgage insurance, you might want to take a look at the contract terms too.

*Disclaimer: I am not recommending or advising on any insurance from any companies. This post is only a sharing of my personal experience and the facts which I manage to find

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