The ST Guide To... choosing the right credit card to suit your needs

Picking the right credit cards for your needs can be a confusing affair. There is a dizzying array to choose from, and each promises some perk or other.

Before signing up for the next card that promises you a flashy lifestyle, it pays to first think about your own needs and what you want from a card.

This guide is not a comprehensive summary. There are plenty more cards on the market. Each touts some unique perk, but there are also finer points you should take note of, such as annual fees and minimum spending.

It can be a headache to decide which cards should go into your wallet but thankfully these days, there are comparison sites that can help.

Sites such as SingSaver, ValuePenguin and Get.com have curated lists of the best cards for certain needs, and they can also do side-by-side comparisons of particular cards so you can pick the best one for your budget and lifestyle.

Cash or miles?

Are you looking to accumulate air miles to offset the cost of future flights, or are you looking for quick cashback on your purchases?

ValuePenguin analyst DJ Kang noted in a recent report that Singaporeans are avid travellers, so accumulating air miles may make sense.

However, he also said that for an air miles credit card to really pay off, a consumer has to do either of the following two things: Spend more than $8,000 per year on his travel needs, or redeem miles for business class tickets or long-haul tickets only.

For an average Singaporean household, he noted, travel spending represents only about 3 per cent of its expenditure, "compared to 16 per cent for dining, 9 per cent for groceries, or 17 per cent for transportation".

"Since cashback credit cards reward higher rates for these categories than miles credit cards do, cash rebate cards generally end up being more rewarding for an average consumer," he said.

Of course, if you do spend a lot on travelling and plan to continue doing so, a miles card is a no-brainer.

Mr Kang notes: "A mile (earned on a credit card) can be worth two to four times more if you redeem it for long-haul flights or for business class tickets, which could increase the value of an air miles card significantly, compared to that of a cashback card."

Cashback cards for general everyday spending

Among the best cashback cards in the market are Standard Chartered's Unlimited Cashback Card, which offers 1.5 per cent cashback on your spending, with no cap.

There is also the POSB Everyday Card, targeted at parents, providing up to 20 per cent of cashback on petrol, 5 per cent on groceries, 9 to 14 per cent on dining and 3 per cent off on cosmetics and pharmaceuticals at Watsons, with a minimum spending requirement of $700 a month.

Get.com recommends the UOB One card, which lets you earn up to 5 per cent cashback on all your purchases if you spend a minimum of $2,000 a month for three months in a row (on at least three purchases a month).

If you spend at least $1,000 (but less than $2,000) a month (for three months in a row and on at least three purchases a month), you will earn a total of $100 cashback for those three months, which is equivalent to 3.33 per cent.

ValuePenguin also recommends the Maybank Platinum Visa Card. It charges no annual fee and does not impose any minimum spending requirements.

If you spend between $300 and $1,000 a month, you can earn up to 3.33 per cent in cash rebate for every dollar you spent.

Though it caps its total rebate at $100 per quarter, or $400 per year, it is still one of the highest yielding cashback cards in the market for modest spenders with a monthly budget of around $1,000 or less.

Miles cards for general everyday spending

A good general spending card for miles is the Citi PremierMiles Visa Card. It has a simple enough concept - you earn 1.2 miles for every dollar you spend in Singapore and 2 miles for every dollar spent overseas (in a foreign currency).

There is an annual fee of $192.60, but you get 10,000 miles in return.

The DBS Altitude has the exact same miles-per-dollar rate, but it waives its annual fee of $192.60 for those who spend more than $2,000 a month or $25,000 a year.

It also offers 3 miles for every dollar spent on online travel bookings.

Another good travel card, especially for more affluent spenders, is the UOB PRVI Miles American Express credit card, which offers 1.4 miles per dollar spent locally and 2.4 miles per S$1 spent overseas.

It also offers a bonus of 20,000 loyalty miles every year with at least $50,000 of spending on the card.

What do you spend on most?

Some cards offer better cashback rates or more airmiles for certain types of spending, so it pays to study your spending patterns before diving in.

It doesn't have to be an in-depth investigation. Just ask yourself: Do you spend a lot on groceries? Do you often go to department stores? Do you spend a lot online? Roughly mapping out how you spend your money can help you figure out which cards to get, because certain cards offer especially good perks when you spend at certain merchants.

For example, the OCBC Plus! credit card is a good one for people who buy groceries frequently - it offers rebates of up to 12 per cent at NTUC FairPrice, which you can redeem at the cashier when making a purchase.

If you plan to use your card mostly on shopping instead, you could consider the Citi Rewards Visa card, which gives you 4 air miles for every dollar spent on shopping - clothes, shoes and bags or anything bought at a department store - whether online or offline.

If you spend a lot of money online, and not just on clothes, shoes and bags, there is also the DBS Woman's Card, which offers 4 miles per dollar spent online, including for items such as air tickets and movie tickets.

The HSBC Revolution Card is a miles card that offers two miles on online spending (shopping and travel bookings), dining, and entertainment.

HSBC Revolution is also a very cheap card to use: its annual fee of $160.50 is waived for the first two years, and subsequently waived for those who maintain an annual expenditure of just $12,500 on the card.

Cards for dining

Even more than travel, Singaporeans love to indulge in food, and there is a plethora of credit cards here that target foodies.

One of the best in the market is the Citi Cash Back Card, which offers 8 per cent rebates on dining, including food deliveries via FoodPanda.

Another is the CIMB Visa Signature Card, which provides 10 per cent cashback on dining expenses, though this is capped at $60 a month and requires a monthly spend of $500 and at least eight monthly transactions worth $30 each.

The UOB YOLO card, targeted at millennials but with no age limit for applicants, offers up to 8 per cent rebates on dining and entertainment, up to a $60 cap, as well as complimentary nightlife perks, such as one-for-one drink specials and priority queue at the best clubs in Singapore.

The American Express Platinum card, targeted at wealthy individuals, offers up to 50 per cent off your dining bill at certain restaurants, as well as exclusive privileges and invitations to Michelin-starred guest chef dinners.

Even if you don't have a card that specialise in offering dining rebates, you could still enjoy dining perks as banks tend to tie up with restaurants to offer discounts for all their cardholders.

For example, Citi has a programme in which every month, an award-winning overseas chef will collaborate with a top Singapore-based restaurant to create a one-time bespoke menu. Citi cardmembers get to enjoy these meals at a special discounted price.