Forum: Credit card rewards not transparent

Credit cards from different banks.
Credit cards from different banks.PHOTO: ST FILE

The Straits Times associate editor Vikram Khanna's commentary on how commercial organisations play on our biases is timely (The tricks companies play online, Oct 9).

Another area of concern relates to the various rewards and loyalty schemes tied to credit cards issued in Singapore.

I would like to highlight one such credit card, which touts enhanced rebates when the card user charges expenses such as groceries and dining to the card.

It is possible to believe that I have made a charge to the card that is eligible for an enhanced rebate, just to find out later from the monthly statement that no rebate was given.

From the issuing bank's explanation, I have found that the card user needs to find out the business' Merchant Category Code, a four-digit number associated with the business' credit card payment terminal. This is patently absurd.

The bank has also not been transparent in its monthly statements about how the basic and enhanced rebates are derived.

Most card users would trust the bank's calculations; few if any would actually try to work out how their rebates are calculated.

It takes great effort, both psychological and real, to overcome this information asymmetry.

Even when I attempted to seek some clarity, the bank resorted to its umbrella clause that it has absolute discretion to decide on any dispute.

Such predatory behaviour needs to be called out.

Lim Say Siong

A version of this article appeared in the print edition of The Straits Times on October 11, 2019, with the headline 'Credit card rewards not transparent'. Print Edition | Subscribe