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So you’ve graduated, got your first job, and started drawing a steady salary.
You’re eager to sign up for your first credit card so you can start earning decent rewards and finally ditch your debit card.
You try to research which card you should get, but you quickly realise that you’re spoiled for choice and you end up feeling more lost than before.
Choosing a credit card that suits you can be a daunting task given how many options there are available.
There are many variables to consider, and there are probably multiple cards that will fit your bill.
Today, I’ll attempt to simplify this task by proposing a basic framework of what you need to consider when choosing a credit card.
I’ll assume that the goal in mind is to maximise rewards with your credit card, whether that is cashback or miles.
The goal is to provide a train of thought to help you determine which credit cards fit your lifestyle and goals.
1: How Much Do You Spend?
The first question that you should ask yourself is how much you spend every month.
Knowing this is important because there are some credit cards that have a monthly spending requirement before they’re any good to use.
If you don’t meet that requirement, the card may go from earning 6% cashback to 0.3% cashback, which is worse than most debit cards, so you definitely don’t want that.
The thing to take note of here is that it’s not enough to simply know your monthly expenses.
Instead, you need to know how much of the monthly expenses you pay via card, ie excluding cash or SGQR payments like PayNow.
This is because you won’t be able to put cash and SGQR payments on your credit card, so they wouldn’t contribute to the monthly spending requirement.
Depending on your monthly card expenses, cards with monthly spending requirements may or may not be suitable for you.
2: How Do You Spend?
Other than how much you spend, it also matters how you spend.
I mentioned earlier that it only matters how much you spend via cards and not the total which includes cash or SGQR.
Now, we need to take it 1 step further.
How exactly are you spending with cards?
Online? Tapping your physical card? Tapping your mobile device a la Apple Pay? Inserting your card via chip?
Even when it comes to card payments, there are various methods of payment, and believe it or not, this also has an influence on how much rewards you can earn with a credit card.
There are many cards that only award rewards for contactless payments, which means paying by tapping your card is different from paying by inserting your card via chip.
There are also cards that only award rewards for online payments which means adding your card to an online site to make a payment is different from paying via Apple Pay on the same website.
Being aware of the exact payment method you tend to use is thus an important step in ensuring that the card you pick fits into your life.
In general, opting for mobile contactless payment like Apple Pay or Google Pay is the preferred payment method when paying in person.
Whereas for online transactions, adding your card to the site to make payment helps to minimise doubt.
But if you don’t like to do either of these things, you’ll want to keep this in mind when picking a credit card.
3: What Do You Spend On?
On top of how much you spend and how you spend, what you actually spend on is also an important factor to consider when picking a credit card.
Some cards only earn rewards for certain categories of transactions, and each category of transaction may also earn rewards at different rates.
So, in order to determine which credit card best suits your lifestyle, it’s good to have an idea of how much you spend on and on which categories.
The credit card lingo for this is Merchant Category Code (MCC), which is a system that assigns each merchant a code based on the category of their business.
For example, a restaurant like Crystal Jade will be assigned an MCC under “Dining”, and a retail store like UNIQLO will be assigned an MCC under “Shopping”.
Cards that earn rewards for selected categories rely on these MCCs to determine which of your transactions are eligible for rewards.
Now, don’t worry too much about the specific MCC of each merchant you visit, because this information isn’t openly disclosed to customers.
Instead, it should suffice to know your spending tendencies on general categories.
Some categories that you might want to pay attention to include:
- Dining
- Shopping
- Groceries
- SimplyGo (public transport)
- Online food (ie food delivery)
- Online shopping
- Online transport (ie private hire vehicles)
- Travel (ie hotels, flights)
4: What Do You Want?
Finally, the last major thing to consider is what type of reward you want to earn with a credit card – miles or cashback?
If you already have an answer in mind, that’s great – that will help to narrow down which credit cards you should choose from.
But if you’re having difficulty deciding, here is a brief list of the pros and cons of each type of reward.
| Miles | Cashback | |
| Pros: | Higher reward % | Immediate value |
| No spending requirement | Simple | |
| Cons: | Miles expiry | Lower reward % |
| Complex to optimise | May have spending requirement | |
| Delayed value |
I talked about this in greater detail in this post – feel free to check it out.
Which reward type you pick comes down to personal preference, but the rule of the game is simple.
Miles are more complex in terms of earning and redeeming them, so in return, it yields higher potential value.
Cashback is more simple, more straightforward, and more versatile, so it yields lower value.
I should also add that miles are generally more valuable for people who want to travel in business class but don’t want to pay for it.
Pick the reward type of your choice, and along with your answers from the earlier questions, you’d have narrowed down your credit card options significantly.
5: Other Considerations
As a bonus, there are other things you can consider before picking a credit card.
These shouldn’t be the primary reasons for picking a card, but if you’re having trouble deciding between cards that are similar, these might be the tiebreaks.
For example, are you using a high-interest savings account that would benefit from having credit card spending under the same bank?
Or are you interested in the all-around benefits that each credit card provides, on top of its rewards earning rate?
How about each card’s annual fee? The sign-up rewards that are currently available?
It’s also a good idea to read detailed reviews by users for each card you’re considering.
This way, you’ll find out more about the quirks of each card and the personal experience that other users have encountered while using them.
This will give you a better understanding of what to expect and what to look out for.
My Recommendations
Even with the framework that I proposed in this post, there are still many credit cards to sieve through to find which ones best suit you.
To help with this, here is a list of some credit cards that I’d personally recommend for different user profiles.
Monthly Card Spend > $600 – Cashback
- DBS Live Fresh
- UOB EVOL
- Citi SMRT
DBS Live Fresh and UOB EVOL are great cards that earn 5% and 8% cashback respectively on mobile contactless payments and online payments.
This covers a wide range of transactions and should net you a decent amount of cashback as long as you can hit the spending requirement.
They are also good options to consider if you are using the DBS Multiplier or UOB One account.
Citi SMRT has a slightly lower spending requirement of $500/month, but it is also more restrictive, earning 5% cashback on grocery, online, and public transport/taxi transactions only.
Monthly Card Spend < $600 – Cashback
- UOB Absolute
- Citi Cash Back +
- HSBC Revolution
UOB Absolute and Citi Cash Back + are unlimited cashback cards that earn 1.7% and 1.6% cashback respectively on all eligible transactions.
This is true regardless of the payment method or the categories of spending, as long as they don’t fall within the standard exclusion categories.
This makes them fuss-free options for earning cashback.
HSBC Revolution is commonly talked about as a miles card, but it actually earns points.
These points can be redeemed for cash vouchers as well – not just airline miles – which makes the HSBC Revolution a proxy cashback card.
It earns 10x points on contactless and online payments for many categories including dining, shopping, and travel, which makes it a versatile card.
The effective cashback rate when points are redeemed for cash vouchers comes out to ~2.5%, which is pretty decent, though your cashback is limited to the merchants which offer cash vouchers on HSBC’s platform.
Miles
- HSBC Revolution
- Citi Rewards (paired with amaze)
- UOB Preferred Platinum Visa (PPV)
All of these cards are specialised rewards cards that earn points that can be redeemed for airline miles at a rate of 4 miles per dollar (mpd).
This is the highest non-promotional earn rate for miles on a credit card.
As mentioned earlier, the HSBC Revolution earns 4 mpd on contactless and online payments for many categories including dining, shopping, and travel.
The Citi Rewards earns 4 mpd on shopping and online transactions excluding travel.
Its use case is extended when paired with the amaze card which allows it to earn 4 mpd on almost any transaction and also provides a cheap gateway to earn 4 mpd on foreign currency transactions.
Check out my review on the Citi Rewards card here!
The UOB PPV earns 4 mpd on mobile contactless payments and online food, shopping, and entertainment transactions.
Check out my review on the UOB PPV card here!
As you can see, all of these cards are versatile and will prove useful for anyone looking to rack up airline miles.
Final Pointers
- don’t have to pick just 1 – curate your selection according to your needs
- read detailed reviews of each card you’re considering to identify card specifics
- don’t be afraid to change your strategy/approach over time – cards are always getting revamped
- be careful of over-optimisation
Choosing the right credit card for yourself can be a tedious process, but it doesn’t have to be.
If you ask yourself the same questions that I posed in this post, you should be able to quickly narrow down your choices to from.
As you might have noticed, being familiar with your expenses will make the process a lot easier, so I highly encourage you to track your expenses if you don’t already do so.
I previously wrote posts about tracking expenses like why you should do it and tips to help with it.
Don’t worry if you can’t seem to find that one card that fits your lifestyle perfectly.
Chances are that you’ll need more than 1 credit card if you want to optimise your spending, so don’t be afraid to curate your wallet of credit cards according to your needs.
If you’ve found this post helpful, feel free to share it with others who might find it helpful as well!
Which credit cards do you use? Let me know in the comments below!