6 credit card resolutions to nail 2021

A new year brings with it the opportunity to make a fresh start. Here are 6 credit card resolutions for you to make the most out of your rewards points and avoid paying unnecessary fees.

As 2021 gets underway, there’s no better time to make some resolutions about credit card strategy for the year ahead.

Unfortunately, most credit card users make simple mistakes or omissions that result in them missing out on valuable rewards or paying extra in unnecessary fees. Each mistake may seem inconsequential, but trust me, they add up over time!

Here’s a simple list of things you can follow in 2021 to make sure you get the most value out of your credit cards.

1. Don’t use one card for everything

I’m running the risk of sounding like a broken record on this, but it’s always worth saying again: Don’t use one credit card to pay for everything. If you do, you’re likely missing out on bonus miles, points, or cashback you could have earned by using the right card in the right situation.

To illustrate, suppose you have a Citi PremierMiles Card. You earn 1.2 miles per dollar (mpd) on all your transactions, whether it’s buying lunch in a restaurant, shopping for clothes online, or purchasing movie tickets at the cinema.

There’s nothing wrong with that, but you could just as well be earning 4 mpd by using the HSBC Revolution Card for your dining, the Citi Rewards Card for your online shopping, and the UOB Preferred Platinum Visa Card for movie tickets.

It may not be as straightforward as using one card everywhere, but someone following this strategy is going to earn a free flight at least three times faster than someone who uses a single card.If you’re worried about paying multiple conversion fees, the simplest approach is to choose a bank that pools points across cards. For example, I could use:

• UOB Lady’s Card for dining (4 mpd)
• UOB Preferred Platinum Visa for online and contactless spending (4 mpd)
• UOB Visa Signature for foreign currency spending (4 mpd)
• UOB PRVI Miles for everything else (1.4 mpd)

The UNI$ earned across these cards will be pooled, so I’ll only pay a single conversion fee while still maximising my miles.

For a guide on which card to use in what situation, be sure to check this page out.

2. Stack credit cards with Google Pay promotions

Google Pay is a fantastic way to earn some free cashback, on top of your regular credit card rewards. By linking your credit cards to your Google Pay wallet and using the NFC feature to pay (only possible with Android phones), you’ll earn scratch cards- little surprise mechanics that award you with up to $10 cashback. These prizes are instantly credited to your bank account via PayNow.

Google frequently changes its scratch card promotions, so do check out the ‘Offers’ section on the Google Pay app for more information.

3. Do some credit card housekeeping

If you’ve got credit cards collecting dust in the drawer, the best course of action may be to do some housekeeping by cancelling them.

The main reason for doing this is to renew your ‘new-to-bank’ status. Banks tend to reserve their best sign-up gifts for new-to-bank customers (usually defined as those who do not hold a given bank’s cards right now, or over the past 12 months).

For example, new-to-bank customers can get up to $300 cash when approved for a Citibank credit card, versus just $30 cash for an existing customer.

However, it’s also important to do this so that you don’t inadvertently pay annual fees for cards you forgot you had.

The worst thing that can happen is that you pay your bills manually, and that annual fee snowballs month after month with interest and late payment fees. Getting an annual fee waiver is usually straightforward, but that requires you know to ask for one in the first place!

(Tip: Some banks have an in-app option for you to ask for a waiver)

4. While housekeeping, choose cards that earn flexible points

Contrary to popular belief, most miles cards don’t earn miles per se. They earn bank points. These bank points can then be converted to frequent flyer miles with the bank’s transfer partners.

With the exception of OCBC (which only partners with KrisFlyer), you’ll have a choice of where to transfer your points. All things equal, the more transfer partners a bank has, the more valuable its points are.

For example, HSBC only lets you transfer points to KrisFlyer and Asia Miles, but if you used Citibank cards, you’d be able to choose from 11 frequent flyer programs and one hotel loyalty program.

Here’s a quick guide to which banks have the most transfer partners.

5. Improve credit score with credit cards

One mind-blowingly simple way to do this? Set up GIRO arrangements for your credit card bills. Sure, it’s unbelievable that in 2021 we still need to download, print, fill and snail mail a physical form, but trust me, it’s less painful than a missed payment.

Incurring a missed payment can put a black mark on your credit score. It doesn’t matter that your missed payment was due to forgetfulness rather than insolvency; the Credit Bureau of Singapore doesn’t take such matters lightly, and neither do banks.

That’s why one of the first things you should do upon receiving your new credit card is to apply for a GIRO arrangement. This way, you’ll never forget to pay your bill.

• American Express
• Citibank
• DBS
• HSBC
• OCBC
• Maybank
• Standard Chartered
• UOB

6. Bring your focus to non-expiring points

While airlines have been relatively diligent about extending expiring miles during this time, banks have generally not followed suit with points. Given all the uncertainty about when travel will be possible again, it’s a good idea to earn evergreen credit card points.

The tricky thing here is that different banks have different policies, and even within the same bank, policies can differ by card. Here’s a cheat sheet for your reference:

Conclusion

While it’s not up to us when travel becomes possible again, our credit card strategy is very much within our control.

By making the above 6 resolutions with your credit cards, you’ll be able to use this lull period to build up a stash of flexible, non-expiring points, while earning additional rewards and avoiding unnecessary fees.

This article was first published in SingSaver.com.sg.