June 14, 2009
Get cash back as you spend
Some credit cards dish out cash rebates of 0.5% to 5% on members' purchases
By Michelle Tay
Have to fork out cash at the Great Singapore Sale for that discounted must-buy item?
You can have your cake and eat it if you use the right credit card instead.
You will get cash back.
Several credit cards have a built-in feature that allows cardholders to get cash rebates, or cashback, each time they spend using the cards.
While some issuing banks have tie-ups with selected merchants to award rebates, there are cards that give you some money back - no matter where you use it.
Depending on the bank's policy, the cashback is either mailed as a cheque, or reflected on your bank account or credit card statement.
Most banks give cashback on spending at rates ranging from 0.5 per cent to 5 per cent.
It may not be as dazzling as a 50 per cent discount, but in such penny-pinching times every, well, penny, counts.
Ms Alice Fok, marketing director of cards at Citibank Singapore, said the number of Citi Dividend Card accounts has increased by more than 50 per cent over the past two years, while the total spending on this card has also risen by more than 30 per cent in the same period.
Citibank's Dividend Card awards cashback when the card is swiped anywhere, and the cheque is mailed to the cardholder once every three months.
Maybank recently launched a $6 million loyalty reward programme where card members can earn up to $1,000 in cash rebates each year.
Depending on what you buy - there are different rebate rates for different categories - you will have to spend between $20,000 and $100,000 to get $1,000 back.
Ms Helen Neo, head of consumer banking at Maybank Singapore, said that despite the current downturn, its card members are still spending.
'Our year-on-year billings growth has been consistently outperforming the industry's performance, even registering positive growth of 4.66 per cent while the industry has a negative growth of 3.21 per cent,' she said.
Maybank also has an Auto Cash Credit programme on all its cards, where cardholders get 0.5 per cent cashback on whatever they spend. This translates to an automatic cash credit into the cardholder's account of $50 for every $10,000 spent.
Other cards, such as the OCBC Titanium MasterCard, allow members to either get cashback or earn points on whatever they spend.
For example, OCBC offers a Titanium Cash rebate whereby customers can redeem OCBC$ - every dollar spent on the card equals one OCBC$ - for 'rewards' like KrisFlyer frequent flyer miles, shopping vouchers for CapitaLand malls or dining vouchers at various establishments.
Customers who chalk up 11,000 OCBC$ can exchange this amount for $50 cash, which they can withdraw through an ATM.
Here are nine credit cards that offer cashback features. The Sunday Times sees how they stack up.