1 00:00:00,219 --> 00:00:02,529 Speaker 1: You're listening to AC N A podcast. 2 00:00:04,920 --> 00:00:09,289 Speaker 1: Hello, I'm Andrea Heng. Welcome back to the Money Talks podcast. 3 00:00:09,489 --> 00:00:11,869 Speaker 1: I hope you've been enjoying the topics we've put out 4 00:00:11,880 --> 00:00:14,899 Speaker 1: on this podcast so far. If you haven't listened, we 5 00:00:14,909 --> 00:00:18,750 Speaker 1: highly recommend a limited series called This or that where 6 00:00:18,760 --> 00:00:21,569 Speaker 1: we got our guests to pick one financial option over 7 00:00:21,579 --> 00:00:25,809 Speaker 1: another from housing to cars to lifestyle packages. We also 8 00:00:25,819 --> 00:00:26,549 Speaker 1: took a look at 9 00:00:26,620 --> 00:00:30,790 Speaker 1: alternative investments that people are really getting into, namely find 10 00:00:30,799 --> 00:00:35,450 Speaker 1: watches and find wine. Today, we want to talk about 11 00:00:35,459 --> 00:00:38,919 Speaker 1: credit cards. Now, if you are not careful, they can 12 00:00:38,930 --> 00:00:42,269 Speaker 1: be a double edged sword and the debt can build up, 13 00:00:42,279 --> 00:00:46,369 Speaker 1: but they also provide convenience and a fuss free way 14 00:00:46,380 --> 00:00:48,250 Speaker 1: to even save money 15 00:00:48,500 --> 00:00:51,299 Speaker 1: quite the conundrum, right? So I know a lot of 16 00:00:51,310 --> 00:00:54,080 Speaker 1: people who have applied for the best credit cards out 17 00:00:54,090 --> 00:00:57,130 Speaker 1: there in the market want to rack up miles another 18 00:00:57,139 --> 00:01:00,810 Speaker 1: one for cash back redemptions. Even a third card for 19 00:01:00,819 --> 00:01:03,310 Speaker 1: extra perks like being a woman and being in a 20 00:01:03,319 --> 00:01:08,709 Speaker 1: certain salary bracket, maybe even 1/4 because its sexy color 21 00:01:08,720 --> 00:01:14,730 Speaker 1: represents exclusivity. But what I'm really wondering is, is this 22 00:01:14,739 --> 00:01:17,330 Speaker 1: all even necessary 23 00:01:17,599 --> 00:01:20,690 Speaker 1: to answer these questions I have with me a lie. 24 00:01:20,699 --> 00:01:24,220 Speaker 1: He is General Manager for Singapore at Money Smart Group. 25 00:01:24,230 --> 00:01:26,849 Speaker 1: Welcome to Money Talks. Thanks 26 00:01:26,860 --> 00:01:28,649 Speaker 2: Andrea. Ok, thanks for having me 27 00:01:28,660 --> 00:01:31,760 Speaker 1: first. I must ask you how many credit cards do 28 00:01:31,769 --> 00:01:32,290 Speaker 1: you own 29 00:01:32,339 --> 00:01:35,669 Speaker 2: personally? Just one? Wow, just 30 00:01:35,680 --> 00:01:38,849 Speaker 1: one. Ok. What kind of credit card is this one 31 00:01:38,860 --> 00:01:39,629 Speaker 1: credit card? I 32 00:01:39,639 --> 00:01:41,680 Speaker 2: particularly like the cash back category. So 33 00:01:42,169 --> 00:01:43,019 Speaker 2: credit card. Ok. 34 00:01:43,029 --> 00:01:46,919 Speaker 1: So you think that that's like the best for your lifestyle, 35 00:01:46,989 --> 00:01:51,330 Speaker 1: your preferred spending habit, correct? What is your spending habit 36 00:01:51,339 --> 00:01:54,419 Speaker 1: on that card? And how do you then divide your 37 00:01:54,430 --> 00:01:55,660 Speaker 1: spending between cash and 38 00:01:55,669 --> 00:02:00,239 Speaker 2: credit? I have quite consistent spend every month and typically 39 00:02:00,250 --> 00:02:04,430 Speaker 2: it's around like necessities. Secondly, I'm a hassle free person 40 00:02:04,440 --> 00:02:04,839 Speaker 2: not to 41 00:02:04,849 --> 00:02:05,620 Speaker 1: be that kind of 42 00:02:05,900 --> 00:02:06,160 Speaker 2: person 43 00:02:07,180 --> 00:02:09,979 Speaker 2: and being hassle free. I just prefer my rewards to 44 00:02:09,990 --> 00:02:12,619 Speaker 2: be a cash back, which is a cash rebate and 45 00:02:12,630 --> 00:02:14,649 Speaker 2: I don't have to be worried that I don't redeem 46 00:02:14,660 --> 00:02:18,529 Speaker 2: the cash rebate because it's automatically offset. Whereas certain categories 47 00:02:18,538 --> 00:02:22,179 Speaker 2: like air miles or reward points, you have to remember 48 00:02:22,380 --> 00:02:26,758 Speaker 2: to redeem it. Imagine doing all that work and forgetting 49 00:02:26,770 --> 00:02:27,169 Speaker 2: to redeem 50 00:02:27,179 --> 00:02:29,279 Speaker 1: it. Yeah, it sounds like a very simple task and 51 00:02:29,288 --> 00:02:31,070 Speaker 1: that's how they sell it to you as well, 52 00:02:31,300 --> 00:02:33,080 Speaker 1: but it actually is a lot of work and you 53 00:02:33,089 --> 00:02:36,570 Speaker 1: miss the deadline. That's it. Exactly. You lose all your 54 00:02:36,580 --> 00:02:38,509 Speaker 1: accumulated points in miles. 55 00:02:38,520 --> 00:02:41,539 Speaker 2: I know personally of people who would build their own 56 00:02:41,550 --> 00:02:45,948 Speaker 2: kind of like spreadsheets to calculate how many rewards from, like, 57 00:02:45,960 --> 00:02:47,669 Speaker 2: 4 to 5 different credit cards. 58 00:02:48,000 --> 00:02:48,928 Speaker 2: But that's not me. 59 00:02:49,110 --> 00:02:51,639 Speaker 1: I don't, yeah, I don't have time to update my 60 00:02:51,649 --> 00:02:53,820 Speaker 1: personal spreadsheet, let alone for four credit 61 00:02:53,830 --> 00:02:56,448 Speaker 2: cards. Exactly. But I think to be fair from the 62 00:02:56,460 --> 00:03:00,059 Speaker 2: stories and experiences of my friends in the initial years 63 00:03:00,100 --> 00:03:02,779 Speaker 2: is to get into the habit, you may miss one 64 00:03:02,788 --> 00:03:04,630 Speaker 2: or two rewards and everything. But 65 00:03:04,889 --> 00:03:08,179 Speaker 2: what I heard from my friend's personal account is they 66 00:03:08,190 --> 00:03:10,380 Speaker 2: took like maybe a year and year and a half 67 00:03:10,389 --> 00:03:12,470 Speaker 2: to build up their habit. But once it becomes a 68 00:03:12,479 --> 00:03:14,609 Speaker 2: bit of a muscle memory, I heard that on a 69 00:03:14,619 --> 00:03:17,050 Speaker 2: weekly basis it doesn't take too much time. 70 00:03:17,869 --> 00:03:20,750 Speaker 1: They must have a different brain function that I don't 71 00:03:20,758 --> 00:03:24,100 Speaker 1: have so different cards have different rewards and there are 72 00:03:24,110 --> 00:03:26,918 Speaker 1: just so many to choose from it. Boggles my mind. 73 00:03:27,229 --> 00:03:30,698 Speaker 1: Am I really losing out if I don't own a 74 00:03:30,710 --> 00:03:34,580 Speaker 1: credit card with some kind of reward pack to it? 75 00:03:35,070 --> 00:03:37,500 Speaker 2: If you're going to spend on something anyway, you should 76 00:03:37,509 --> 00:03:40,089 Speaker 2: definitely have at least one credit card. Lah. Because you're 77 00:03:40,100 --> 00:03:43,050 Speaker 2: going to spend, you might as well maximize your spending right? 78 00:03:43,059 --> 00:03:44,259 Speaker 2: And spend more effectively 79 00:03:44,270 --> 00:03:45,860 Speaker 1: reward yourself with that spending. 80 00:03:46,014 --> 00:03:48,955 Speaker 2: Yeah, if you're going to spend on like necessities, you 81 00:03:48,964 --> 00:03:51,434 Speaker 2: might as well have one credit card. But if, let's 82 00:03:51,445 --> 00:03:53,134 Speaker 2: say on the other spectrum, if you're only going to 83 00:03:53,145 --> 00:03:55,585 Speaker 2: spend the X amount and because you're looking at all 84 00:03:55,595 --> 00:03:57,755 Speaker 2: the different credit card points and you end up having 85 00:03:57,764 --> 00:04:00,705 Speaker 2: like four or five credit cards and you end up 86 00:04:00,755 --> 00:04:04,054 Speaker 2: racking up like maybe two or three what you actually 87 00:04:04,065 --> 00:04:04,845 Speaker 2: wanted to spend 88 00:04:05,059 --> 00:04:07,179 Speaker 2: then as you said, you know, it's a double edged sword, 89 00:04:07,250 --> 00:04:08,070 Speaker 2: not so good. 90 00:04:08,259 --> 00:04:10,889 Speaker 1: Ok, so say I'm shopping around for a credit card, 91 00:04:10,899 --> 00:04:13,800 Speaker 1: so many out there, right? And to help me choose one, 92 00:04:13,960 --> 00:04:17,670 Speaker 1: a big reference point tends to be without a doubt 93 00:04:17,678 --> 00:04:21,589 Speaker 1: the benefits, the perks, the rewards, right? So in your experience, 94 00:04:21,600 --> 00:04:24,678 Speaker 1: how do people choose a card? So for instance, I 95 00:04:24,690 --> 00:04:27,950 Speaker 1: have one that has say my mortgage loan on it 96 00:04:27,959 --> 00:04:30,399 Speaker 1: with the bank or I open a fixed deposit account 97 00:04:30,410 --> 00:04:30,929 Speaker 1: with them. 98 00:04:31,170 --> 00:04:33,190 Speaker 1: Should I do more work and find out about the 99 00:04:33,200 --> 00:04:36,790 Speaker 1: benefits and perks and making sure that everything sort of 100 00:04:36,799 --> 00:04:40,690 Speaker 1: harmonizes in my sort of credit card ecosystem. 101 00:04:40,859 --> 00:04:43,730 Speaker 2: I think that's the ideal case, but in reality, like 102 00:04:43,738 --> 00:04:45,630 Speaker 2: we said, it takes a lot of work to get there. 103 00:04:45,640 --> 00:04:48,308 Speaker 2: I think we can follow a very simple like just 104 00:04:48,320 --> 00:04:52,519 Speaker 2: three steps first, evaluating spending habits and amount. Secondly, ask 105 00:04:52,529 --> 00:04:56,339 Speaker 2: ourselves a very honest question, right? Everyone likes to be rewarded, 106 00:04:56,350 --> 00:04:58,239 Speaker 2: ascertain what kind of rewards that you like? 107 00:04:58,559 --> 00:05:00,488 Speaker 2: I think a lot of Singaporeans, they love to travel. 108 00:05:00,500 --> 00:05:03,130 Speaker 2: It's nothing wrong to, to rack up air miles and 109 00:05:03,140 --> 00:05:05,988 Speaker 2: to fly for free. Some people even have like goals 110 00:05:06,000 --> 00:05:08,500 Speaker 2: to fly business class to a certain destination. Yeah, I 111 00:05:08,510 --> 00:05:10,649 Speaker 1: know someone who has actually written a guide book on 112 00:05:10,660 --> 00:05:12,600 Speaker 1: how to chase air miles on credit 113 00:05:12,609 --> 00:05:16,399 Speaker 2: cards. I probably know that person too. But and once 114 00:05:16,410 --> 00:05:19,140 Speaker 2: you ascertain these two things, then you go into comparing 115 00:05:19,149 --> 00:05:21,820 Speaker 2: what kind of card. So for example, if it's cash 116 00:05:21,829 --> 00:05:24,899 Speaker 2: back air miles or say rewards within that category go 117 00:05:24,910 --> 00:05:25,928 Speaker 2: and compare and 118 00:05:26,200 --> 00:05:28,410 Speaker 2: I think simply put to compare, just take note of 119 00:05:28,420 --> 00:05:31,820 Speaker 2: three things. One is the reward terms and conditions. So 120 00:05:31,829 --> 00:05:35,410 Speaker 2: this first bucket is where we have to open our 121 00:05:35,420 --> 00:05:37,290 Speaker 2: eyes a little bit more to look at the best 122 00:05:37,299 --> 00:05:40,329 Speaker 2: kind of reward currency. For example, if you are in 123 00:05:40,339 --> 00:05:43,700 Speaker 2: for cash back, right? I'm looking at $1 spend equals 124 00:05:43,709 --> 00:05:47,809 Speaker 2: to how many percent cash back, right? That reward currency. Secondly, 125 00:05:47,820 --> 00:05:52,850 Speaker 2: there are maximum caps and minimum spending. So for example, 126 00:05:52,859 --> 00:05:53,390 Speaker 2: if I only 127 00:05:53,463 --> 00:05:58,022 Speaker 2: spend $500 right? But the minimum spend is $1000 right? 128 00:05:58,032 --> 00:06:01,452 Speaker 2: Then I don't, yeah, I lose out thirdly it's expiry 129 00:06:01,463 --> 00:06:05,102 Speaker 2: of points, right? Some have no expiry date, others have. 130 00:06:05,442 --> 00:06:07,832 Speaker 2: Um So in that ecosystem, I think when you're comparing 131 00:06:07,842 --> 00:06:10,553 Speaker 2: rewards terms and conditions, those are the few things they 132 00:06:10,562 --> 00:06:13,812 Speaker 2: have to look at. Second thing is around fees. So 133 00:06:13,822 --> 00:06:16,702 Speaker 2: there's very popular question people always ask, do I have 134 00:06:16,713 --> 00:06:19,812 Speaker 2: to pay annual fees for my credit card? And when 135 00:06:19,822 --> 00:06:20,522 Speaker 2: you compare 136 00:06:20,726 --> 00:06:23,776 Speaker 2: are cards that allow you for free waiver first two years, 137 00:06:23,786 --> 00:06:26,325 Speaker 2: if you are a kind of hassle free kind like myself. 138 00:06:26,335 --> 00:06:28,485 Speaker 2: I will go for these kind of cards, whereas there 139 00:06:28,496 --> 00:06:31,906 Speaker 2: are other cards that are annual fee compulsory, but nobody 140 00:06:31,915 --> 00:06:34,036 Speaker 2: really knows whether you can call the bank and get 141 00:06:34,045 --> 00:06:35,735 Speaker 2: them waived or not. A lot of them try. 142 00:06:35,746 --> 00:06:39,055 Speaker 1: I spoke with someone recently about using a credit card 143 00:06:39,265 --> 00:06:44,175 Speaker 1: for groceries for everyday spending. And this person told me 144 00:06:44,246 --> 00:06:47,246 Speaker 1: not to do that. It's a very slippery slope once 145 00:06:47,255 --> 00:06:47,914 Speaker 1: you do that. 146 00:06:48,178 --> 00:06:51,940 Speaker 1: But you're also coming from the camp of having the 147 00:06:51,950 --> 00:06:55,869 Speaker 1: cash back card. What do you say about that comment? 148 00:06:55,880 --> 00:06:56,209 Speaker 1: Is there 149 00:06:56,220 --> 00:06:57,510 Speaker 2: any reason why is it? 150 00:06:58,428 --> 00:07:01,479 Speaker 1: I think it was more to do with when you 151 00:07:01,488 --> 00:07:03,828 Speaker 1: use a credit card for everyday spending and you get 152 00:07:03,839 --> 00:07:07,109 Speaker 1: the cash back on that the reward versus the 153 00:07:07,515 --> 00:07:09,454 Speaker 1: actual spend didn't add up or something 154 00:07:09,464 --> 00:07:11,535 Speaker 2: like that. Ok. So I use my cash back credit 155 00:07:11,545 --> 00:07:14,475 Speaker 2: card for everyday spend. And I think what your friend 156 00:07:14,484 --> 00:07:17,415 Speaker 2: is saying is true, right? But that's on one spectrum 157 00:07:17,424 --> 00:07:20,114 Speaker 2: that you want to optimize to get the best kind 158 00:07:20,125 --> 00:07:22,334 Speaker 2: of cash back and the best kind of rewards in 159 00:07:22,345 --> 00:07:24,643 Speaker 2: that sense, maybe a cash back card is not so good. 160 00:07:24,654 --> 00:07:26,785 Speaker 2: Maybe a rewards points, credit card 161 00:07:27,010 --> 00:07:30,109 Speaker 2: which gives you actually more points that you have flexibility 162 00:07:30,119 --> 00:07:33,290 Speaker 2: to choose what kind of like products or vouchers to 163 00:07:33,299 --> 00:07:36,859 Speaker 2: redeem that might be better. So when I got into 164 00:07:36,869 --> 00:07:39,649 Speaker 2: a cash back credit card for everyday spend, I'm actually 165 00:07:39,660 --> 00:07:43,140 Speaker 2: not in the market for like the best currency. It's 166 00:07:43,149 --> 00:07:45,489 Speaker 2: more for the ease, right? As long as my cash 167 00:07:45,549 --> 00:07:47,589 Speaker 2: back is average, it's not the lousiest, it's not the 168 00:07:47,600 --> 00:07:48,959 Speaker 2: best that's suitable 169 00:07:48,970 --> 00:07:51,179 Speaker 1: for me. Ok, so you are. No man in the. 170 00:07:55,899 --> 00:07:59,040 Speaker 1: Hello, everyone. My name is Christina and I'm Adrian and 171 00:07:59,049 --> 00:08:01,459 Speaker 1: we're the host of a podcast called Work It if 172 00:08:01,470 --> 00:08:03,459 Speaker 1: you never heard of it. Well, it's a good time 173 00:08:03,470 --> 00:08:06,269 Speaker 1: to tap in, in the last three episodes. We've discussed 174 00:08:06,279 --> 00:08:09,420 Speaker 1: topics like how to negotiate for a salary increase or 175 00:08:09,429 --> 00:08:12,019 Speaker 1: how to get along with younger colleagues who have different 176 00:08:12,029 --> 00:08:13,010 Speaker 1: values from you. 177 00:08:13,220 --> 00:08:16,790 Speaker 1: Incidentally, it is our top performing episode if work consumes 178 00:08:16,799 --> 00:08:19,339 Speaker 1: your life and you want some perspective on issues like 179 00:08:19,350 --> 00:08:23,679 Speaker 1: management stress, even office romance. This podcast should be on 180 00:08:23,690 --> 00:08:27,220 Speaker 1: your list. A new episode drops every Monday. Catch us 181 00:08:27,230 --> 00:08:30,450 Speaker 1: on the CN A app or wherever you get your podcast. 182 00:08:32,849 --> 00:08:36,099 Speaker 1: Ok. So let's go back a little bit to what 183 00:08:36,109 --> 00:08:38,729 Speaker 1: you were talking about that annual fee. You talked about 184 00:08:38,739 --> 00:08:42,199 Speaker 1: how some credit card companies offer, like a one year 185 00:08:42,210 --> 00:08:45,130 Speaker 1: or two year annual fee waiver. And then there are 186 00:08:45,140 --> 00:08:47,270 Speaker 1: some that don't. And then we try our luck as 187 00:08:47,280 --> 00:08:50,780 Speaker 1: customers are the annual fees even worth paying for in 188 00:08:50,789 --> 00:08:50,869 Speaker 1: the 189 00:08:50,880 --> 00:08:53,489 Speaker 2: first place. It depends. But I would say as a 190 00:08:53,500 --> 00:08:57,489 Speaker 2: blanket rule, the fee paying cards have better benefits than 191 00:08:57,500 --> 00:09:00,979 Speaker 2: the non fee pay. Oh, interesting. Right. The annual fee 192 00:09:00,989 --> 00:09:02,229 Speaker 2: is predominantly there. 193 00:09:02,494 --> 00:09:04,664 Speaker 2: The maintenance of the credit card benefits and some of 194 00:09:04,674 --> 00:09:06,914 Speaker 2: the operations around it also, it adds on to the 195 00:09:06,924 --> 00:09:10,074 Speaker 2: prestige of the credit card that's on one side. But 196 00:09:10,085 --> 00:09:12,164 Speaker 2: on the other side is if you have a fee 197 00:09:12,174 --> 00:09:16,604 Speaker 2: bank card and you don't utilize those benefits, it is 198 00:09:16,614 --> 00:09:17,465 Speaker 2: also wasted. 199 00:09:17,474 --> 00:09:20,034 Speaker 1: Of course, then you're paying upwards of 90 to 100 200 00:09:20,044 --> 00:09:22,934 Speaker 1: and $20 per year for something that's just going to 201 00:09:22,945 --> 00:09:24,414 Speaker 1: collect dust in your wallet. And 202 00:09:24,424 --> 00:09:26,983 Speaker 2: when you use it for a fancy meal meal, one 203 00:09:27,075 --> 00:09:27,734 Speaker 2: time purchase, 204 00:09:27,755 --> 00:09:31,565 Speaker 1: how many is too many when it comes to credit cards? 205 00:09:31,575 --> 00:09:31,864 Speaker 1: Because 206 00:09:32,340 --> 00:09:34,940 Speaker 1: I know of people who actually get a kick out 207 00:09:34,950 --> 00:09:39,450 Speaker 1: of maximizing the rewards of each credit card they own. 208 00:09:39,460 --> 00:09:41,469 Speaker 1: I know someone who has four. I know someone who 209 00:09:41,479 --> 00:09:43,760 Speaker 1: has six and then there's people like you and me, 210 00:09:43,770 --> 00:09:46,390 Speaker 1: we only have one. Where do you stand on 211 00:09:46,400 --> 00:09:48,049 Speaker 2: this? I think based on the data point that I 212 00:09:48,059 --> 00:09:52,299 Speaker 2: saw done by you gov in 2019, that research actually 213 00:09:52,309 --> 00:09:55,809 Speaker 2: says that more than three quarters of Singaporeans 214 00:09:55,905 --> 00:09:59,574 Speaker 2: have at least one credit card and slightly more than 215 00:09:59,585 --> 00:10:05,294 Speaker 2: half 50% of Singaporeans have two credit cards. Only about 10% 216 00:10:05,304 --> 00:10:07,744 Speaker 2: have six cards or more. So that kind of frames 217 00:10:07,755 --> 00:10:11,554 Speaker 2: your question. The deal hunters or what I call the power. 218 00:10:11,565 --> 00:10:14,444 Speaker 2: Users of credit cards are probably like 10 15%. It 219 00:10:14,455 --> 00:10:18,364 Speaker 2: really depends on your preference. Right? There's always an opportunity 220 00:10:18,375 --> 00:10:19,414 Speaker 2: cost between 221 00:10:19,669 --> 00:10:24,500 Speaker 2: maximizing the benefits and the time invested. I always like 222 00:10:24,510 --> 00:10:27,659 Speaker 2: to add one more aspect to consideration. Is, 223 00:10:27,890 --> 00:10:31,569 Speaker 2: is the credit card helping you spend effectively or is 224 00:10:31,580 --> 00:10:33,859 Speaker 2: it egging you to spend more? If it's egging you 225 00:10:33,869 --> 00:10:37,059 Speaker 2: to spend more, it could lead to unhealthy spending habits. 226 00:10:37,070 --> 00:10:39,858 Speaker 1: So your team want credit card, as I said earlier, 227 00:10:39,869 --> 00:10:42,319 Speaker 1: would you go for a second credit card? Do you 228 00:10:42,330 --> 00:10:42,820 Speaker 1: think in the 229 00:10:42,830 --> 00:10:44,950 Speaker 2: future? I think it's a good question. The answer is 230 00:10:44,960 --> 00:10:49,020 Speaker 2: likely to be yes reason because travel has reopened up. Right. 231 00:10:49,030 --> 00:10:51,839 Speaker 2: And being a cash back reward person, I'm only earning 232 00:10:51,849 --> 00:10:54,020 Speaker 2: cash back from my spend. Right. But if I'm planning, 233 00:10:54,030 --> 00:10:55,880 Speaker 2: let's say a big trip a couple of years later 234 00:10:56,200 --> 00:10:58,390 Speaker 2: and air miles credit card would be good. And I 235 00:10:58,400 --> 00:11:00,969 Speaker 2: know for a fact that most families have two or 236 00:11:00,979 --> 00:11:01,728 Speaker 2: three cards spread 237 00:11:01,739 --> 00:11:04,669 Speaker 1: across. Yeah, I was gonna ask about that as well. Yeah, 238 00:11:04,679 --> 00:11:07,950 Speaker 1: the families operate differently. So then they will have different 239 00:11:07,960 --> 00:11:09,969 Speaker 1: credit card for different types of expenses. It's very 240 00:11:09,979 --> 00:11:12,469 Speaker 2: fair to have one cash back card and maybe an 241 00:11:12,479 --> 00:11:15,330 Speaker 2: air miles or rewards card to actually rack up both 242 00:11:15,340 --> 00:11:16,690 Speaker 2: sides of the rewards. 243 00:11:16,719 --> 00:11:21,750 Speaker 1: Ok. Buy us aside if I were to have one 244 00:11:21,760 --> 00:11:23,919 Speaker 1: credit card to rule them all, 245 00:11:24,450 --> 00:11:27,099 Speaker 1: I kind of think I know the answer to this one. 246 00:11:27,109 --> 00:11:29,500 Speaker 1: Which kind should I go for in terms of the 247 00:11:29,510 --> 00:11:33,849 Speaker 1: overall reward, let's say I'm someone who shops quite a 248 00:11:33,859 --> 00:11:36,939 Speaker 1: fair bit. I like my fashion, but I also need 249 00:11:36,950 --> 00:11:40,640 Speaker 1: it for certain household expenditures. What would be the best 250 00:11:40,650 --> 00:11:45,130 Speaker 1: overall card for someone whose spending habits are similar to mine? 251 00:11:45,190 --> 00:11:45,320 Speaker 1: I 252 00:11:45,330 --> 00:11:48,189 Speaker 2: would think if there's only one card to rule them all, 253 00:11:48,200 --> 00:11:51,440 Speaker 2: probably a reward points card would be good 254 00:11:51,525 --> 00:11:54,405 Speaker 2: because the whole value proposition of a rewards points card 255 00:11:54,414 --> 00:11:57,505 Speaker 2: is it's flexible that reward points that you accumulate with 256 00:11:57,515 --> 00:12:01,895 Speaker 2: the bank's reward catalog allows you to get rebates or 257 00:12:01,905 --> 00:12:06,824 Speaker 2: vouchers or redeem products even transfer those points into air 258 00:12:06,835 --> 00:12:09,815 Speaker 2: miles if you want to travel. But just one thing 259 00:12:09,825 --> 00:12:14,044 Speaker 2: to take note how appealing the reward points is really 260 00:12:14,054 --> 00:12:16,414 Speaker 2: depending on how appealing the catalog is. 261 00:12:16,424 --> 00:12:18,515 Speaker 1: Of course, because if it's going to give me 262 00:12:18,739 --> 00:12:22,319 Speaker 1: brands or products that I don't typically use and what's 263 00:12:22,330 --> 00:12:25,570 Speaker 1: the point, right? Ok. So one thing that we've seen 264 00:12:25,580 --> 00:12:31,789 Speaker 1: an increase of is the number of alternative payment methods. Obviously, 265 00:12:31,799 --> 00:12:34,760 Speaker 1: I'm talking about buy now pay later schemes, right? These 266 00:12:34,770 --> 00:12:38,869 Speaker 1: are apps that allow you to break up large amounts 267 00:12:38,880 --> 00:12:43,239 Speaker 1: into smaller payments, more manageable payments usually in installments of 268 00:12:43,250 --> 00:12:44,090 Speaker 1: three months, right? 269 00:12:44,450 --> 00:12:48,770 Speaker 1: Are there any risks associated with these methods that could 270 00:12:48,780 --> 00:12:52,280 Speaker 1: actually put good old credit cards out of business? 271 00:12:52,590 --> 00:12:54,890 Speaker 2: I don't think buy now pay later would put the 272 00:12:54,900 --> 00:12:58,289 Speaker 2: traditional credit card players out of business simply because credit 273 00:12:58,299 --> 00:13:01,780 Speaker 2: cards also allow one to take an installment payment plan 274 00:13:01,789 --> 00:13:05,329 Speaker 2: for big purchases for much longer too. Exactly, for much 275 00:13:05,340 --> 00:13:08,150 Speaker 2: longer for buy. Now pay later, it's a different kind 276 00:13:08,159 --> 00:13:11,449 Speaker 2: of mechanism other than using credit cards. And not everyone 277 00:13:11,460 --> 00:13:15,400 Speaker 2: would get into the behavior of downloading something new to 278 00:13:15,409 --> 00:13:18,020 Speaker 2: split the payment into two or three. Even though I 279 00:13:18,030 --> 00:13:20,760 Speaker 2: think nowadays is very popular, there are a lot of incentives. 280 00:13:20,770 --> 00:13:22,020 Speaker 2: My fear is that 281 00:13:22,250 --> 00:13:24,059 Speaker 2: a lot of the people that they can buy now 282 00:13:24,070 --> 00:13:26,950 Speaker 2: pay later are maybe not the ones that have a 283 00:13:26,960 --> 00:13:31,450 Speaker 2: very high purchasing power. Right. So that facility actually is 284 00:13:31,460 --> 00:13:34,830 Speaker 2: more beneficial or speaks to people in that category slightly 285 00:13:34,840 --> 00:13:37,700 Speaker 2: better than credit cards, right? Whereas credit cards have a 286 00:13:37,710 --> 00:13:41,590 Speaker 2: more holistic benefit rewards are not just one of the benefits, 287 00:13:41,599 --> 00:13:45,809 Speaker 2: you know, miles card come with premier kind of travel loungers, 288 00:13:45,820 --> 00:13:48,780 Speaker 2: all these like auxiliary benefits which appeal to a lot 289 00:13:48,789 --> 00:13:49,469 Speaker 2: of people 290 00:13:50,090 --> 00:13:53,108 Speaker 1: French benefits. Of course, they count as well. Exactly is 291 00:13:53,119 --> 00:13:56,099 Speaker 1: not owning a credit card at all an option. 292 00:13:56,109 --> 00:13:59,319 Speaker 2: That's a good question. I've got some of these questions before. 293 00:13:59,330 --> 00:14:02,260 Speaker 2: I think it's practical to at least have one credit card. 294 00:14:02,270 --> 00:14:04,380 Speaker 2: And these are some of my reasons. Right. Firstly, we 295 00:14:04,390 --> 00:14:07,559 Speaker 2: go back to spending effectively. If you're going to spend, 296 00:14:07,570 --> 00:14:09,950 Speaker 2: you might as well get some rewards. Secondly, having a 297 00:14:09,960 --> 00:14:13,630 Speaker 2: credit card actually builds up your credit score. Right? Yes. Right. 298 00:14:13,640 --> 00:14:17,229 Speaker 2: Especially for new to credit card users. And thirdly it 299 00:14:17,239 --> 00:14:17,738 Speaker 2: helps you 300 00:14:17,929 --> 00:14:19,690 Speaker 2: is your cash flow or it gives you a higher 301 00:14:19,700 --> 00:14:22,760 Speaker 2: purchasing power. Say for example, you bought a new place 302 00:14:22,770 --> 00:14:25,150 Speaker 2: and you need to buy a furniture and lastly it's 303 00:14:25,159 --> 00:14:27,659 Speaker 2: convenient and it's accessible. I mean, you can't do any 304 00:14:27,669 --> 00:14:31,460 Speaker 2: e-commerce shopping without a credit card much nowadays. Right. So 305 00:14:31,469 --> 00:14:34,830 Speaker 2: I think all these advantages warrant at least one in 306 00:14:34,840 --> 00:14:35,820 Speaker 2: my opinion. My final 307 00:14:35,830 --> 00:14:38,739 Speaker 1: question to you before I let you go. Is there 308 00:14:38,750 --> 00:14:42,099 Speaker 1: such a thing as a bad credit card to get? 309 00:14:42,169 --> 00:14:45,679 Speaker 2: Probably first time somebody has asked me that bad credit card. 310 00:14:45,909 --> 00:14:48,239 Speaker 2: I don't think there is a bad credit card per se, 311 00:14:48,250 --> 00:14:51,700 Speaker 2: but I think what is not a good use of 312 00:14:51,710 --> 00:14:54,469 Speaker 2: credit card is just to get it for the sign 313 00:14:54,479 --> 00:14:57,280 Speaker 2: up bonus. And let's say if you forget to make 314 00:14:57,289 --> 00:15:01,679 Speaker 2: certain payments and you end up incurring fees that you 315 00:15:01,690 --> 00:15:05,270 Speaker 2: can't waive off and you're just having that like thick 316 00:15:05,280 --> 00:15:09,270 Speaker 2: many plastics in the wallet, right? Which actually rack up 317 00:15:09,280 --> 00:15:12,250 Speaker 2: fees that you don't know of. I think that would 318 00:15:12,260 --> 00:15:14,440 Speaker 2: be a bad behavior. Not so much of a bad 319 00:15:14,450 --> 00:15:14,750 Speaker 2: credit 320 00:15:14,760 --> 00:15:15,760 Speaker 1: card. Right? 321 00:15:16,950 --> 00:15:20,460 Speaker 1: Didn't mom and dad warn you about the dangers of 322 00:15:20,469 --> 00:15:25,179 Speaker 1: credit cards? Mine certainly did. But if you're a rewards 323 00:15:25,190 --> 00:15:28,500 Speaker 1: king or queen and you're able to keep those credit 324 00:15:28,510 --> 00:15:31,479 Speaker 1: card bills in tip top shape, then go ahead and 325 00:15:31,489 --> 00:15:34,390 Speaker 1: burn that plastic. But if it's just too much of 326 00:15:34,400 --> 00:15:37,840 Speaker 1: a hassle know that there are singular options for you, 327 00:15:37,849 --> 00:15:42,059 Speaker 1: including not owning one at all. Thanks very much 328 00:15:42,474 --> 00:15:45,505 Speaker 1: for laying out all the cards on the table and 329 00:15:45,515 --> 00:15:49,265 Speaker 1: seeing which ones I was playing or in this case. Hey, 330 00:15:49,494 --> 00:15:52,094 Speaker 1: and thanks to you, our listener. If you've enjoyed this 331 00:15:52,104 --> 00:15:55,284 Speaker 1: episode of Money Talks, there's more content for you to enjoy. 332 00:15:55,294 --> 00:15:58,224 Speaker 1: Just follow us on Apple podcast or Spotify and give 333 00:15:58,234 --> 00:16:01,215 Speaker 1: us five stars or leave a review. The team behind 334 00:16:01,224 --> 00:16:06,114 Speaker 1: Money Talks is Jacqueline Chan, Joanne Chan, Christina Robert and 335 00:16:06,125 --> 00:16:06,984 Speaker 1: I'm Andrea Ha.