Cash rebates: Different strokes for different folks

PHOTO: Cash rebates: Different strokes for different folks

SINGAPORE - Credit cardholders are spoilt for choice when it comes to signing up for a new card to enjoy cash rebates on their purchases.

But caveat emptor applies - it serves a cardholder well to comb through the fine print of the card application form as several banks have amended the terms and conditions pertaining to cash rebates recently.

Among them, Standard Chartered Bank (StanChart) has lowered the cash rebate level to 3 per cent for spending of at least $3,000 a month on its Manhattan World MasterCard, with rebates capped at $200 per quarter. This will take effect from this Tuesday.

Manhattan cardholders currently enjoy a cash rebate of 5 per cent for charging big-ticket items on their cards.

With the amendment, cardholders will need to spend more in order to hit the maximum rebate of $800 a year.

In addition, cardholders will no longer be able to use the Manhattan card to pay for insurance premiums to qualify for rebates - these now fall under the list of excluded transactions or purchases.

When contacted by The Sunday Times, Ms Sandhya Devanathan, head of unsecured lending, Singapore, at StanChart, said it was a "business decision" to revise the terms and conditions of the cash rebate offerings.

In comparison, the United Overseas Bank (UOB) One Card typically attracts customers who charge less each month to enjoy cash rebates.

One Card holders need only spend at least $300 per month to get a rebate of up to 3.33 per cent per quarter.

However, this rebate is subject to a cap of $600 annually, and a minimum of three purchases per month.

Despite the lower rebate compared to the Manhattan card, One Card can be used for insurance premiums, instalments and bill payments to qualify for rebates.

UOB sweetened the deal in March this year to allow cardholders travelling abroad to enjoy 2 per cent rebates on overseas transactions, with spending capped at $5,000 annually.

These features have enticed more customers to use the One Card as their main credit card, according to UOB.

Ms Gan Ai Im, managing director of cards and payments at UOB, said: "Because of its winning form and function, more than 20 per cent of our customers choose the UOB One Card as their primary card."

Senior operations executive Ivan Lek, 28, is one such customer. While Mr Lek holds both the Manhattan card and One Card, he uses the latter as his main credit card.

"I used the Manhattan card for online purchases, booking of hotels, flight tickets or sometimes bulk company purchases.

"Now that I have to spend more to hit the maximum cashback of $200 per quarter, it's more difficult as I don't always hit $3,000 (per month). But I will still use it for its benefits such as dining privileges.

"The One Card is still the best card as I don't have to spend more than $3,000 in one month."

The Citibank Dividend Card targets a different customer segment: car owners who use it to claim cash rebates for purchases such as petrol.

The Dividend Card gives a cash rebate of up to 5 per cent for petrol bought here and overseas for a minimum monthly spending of $50. But for non-petrol purchases, the rebate could be as low as 0.5 per cent.

Even SingPost has latched onto the cash rebate trend - it partnered Stan- Chart to launch the Standard Chartered SingPost Platinum Visa credit card last month, whereby cardholders can get a 6 per cent cash rebate on purchases at all supermarkets in Singapore.

Other cards that offer cash rebates include the POSB Everyday Card, which targets customers who use the card to buy basic items such as groceries, and the CIMB World Mastercard, which targets big spenders and offers a 1 per cent cash rebate.

Not to be outdone, UOB will soon offer an alternative to its One Card and give credit cardholders more reason to zap their cards and chalk up rebates.

UOB's Ms Gan said: "We will launch a new co-branded rebate card which offers exclusive rebates at a select group of stores by the last quarter of this year."

But before you sign on the dotted line for your next credit card to enjoy cash rebates, you might want to do your sums to find out which card offers more bang for your buck.


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