Are annual fee credit cards in Singapore worth it?
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PUBLISHED ONMarch 01, 2022 8:45 AMByDYLAN PEH
When shopping for a credit card in Singapore, you will come across two broad categories: Credit cards with annual fees and credit cards without annual fees (or that have easier fee waivers). In this article, we will discuss whether or not annual fee credit cards are worth it in Singapore and some of the alternatives available.
What are annual fee credit cards?
Annual fee credit cards are credit cards that charge you a fee, once a year, for using the card. In return, they tend to offer more and better perks than cards that do not charge an annual fee (or that have relatively easy methods for waiving the fee).
An example of an annual fee credit card is the UOB One Credit Card. It charges an annual fee of SGD 192.60. However, for this particular card, the card provider waives the fee for the first year.
When are annual fee credit cards worth it?
Choosing a credit card with an annual fee can pay off. This can happen when the benefits you get from using the card outweigh the annual cost of keeping it. In general, the higher the credit card’s annual fee, the more benefits it affords you.
You want better cashback perks
You can often obtain better cash back perks from using a credit card with an annual fee. You might be able to earn enough cash back to more than cover the annual fee, which allows you to make a net gain. To do so, you’ll have to spend in the categories outlined by the credit card provider.
For example, the UOB One Credit Card offers users a flat cashback of 5 per cent and 5 per cent more when making purchases from merchants like Dairy Farm, Shopee, Grab and more. To the best of our knowledge, there are no waiver-fee free only credit cards in Singapore that can match these cashback perks.
You want better rewards
Annual fee credit cards are also better for redeeming rewards. If you think that the value of the rewards are greater than the annual fee, such credit cards might be a good choice. However, you might want to check if you can directly benefit from the rewards - if you can't, they would be wasted.
For example, while the American Express Platinum Card charges a non-waivable annual fee of SGD 321 (and has a minimum income requirement of SGD 80,000), it also offers users a wide variety of rewards. These include exclusive discounts at select restaurants and spas as well as complimentary drinks at upscale bars.
You want more air miles
If you’re a frequent traveler, you might want to consider an annual fee credit card. Annual fee credit cards for miles tend to offer more value than credit cards with no annual fee, or that have more easily waived annual fees. To top it off, these cards usually have extra perks that can make your travel more enjoyable.
For example, one of the best miles cards, the DBS Altitude Visa Card, which has a fee waiver requirement of SGD 25,000 in annual spend, matches five miles to every 1 SGD in online flight and hotel and overseas spend.
The Maybank Horizon Visa Signature Card, which has an annual fee waiver requirement of SGD 18,000 in spending, matches 3.2 miles to every 1 SGD in local dining and transport spend.
You want the sign-up bonus
Most credit cards offering generous promotions or sign-up bonuses tend to have a non-waivable annual fee attached to them. For some cards, the sign-up bonus alone may be able to offset the annual fee.
You can find these cards on our page on the best credit card promotions in Singapore .
When are annual fee credit cards not worth it?
Despite the benefits that annual fee credit cards bring, there are some reasons why you might not want to invest in one.
They strain your budget
The most obvious drawback of an annual fee credit card is the yearly expense needed to keep it. Even if you don’t use the card, the card provider will still charge you the annual fee.
The fees that credit card providers charge can go up to as high as $695.50 (for the Standard Chartered Visa Infinite X Card). This alone can make it too costly for some to have a credit card with an annual fee.
Some credit cards have an annual fee waiver. However, trying to meet the waiver requirement by increasing your spending could stretch a limited budget. For example, if the waiver requirement is SGD 25,000 in, you might go out of your way to increase your spending such that it becomes SGD 25,000 or more - even if it isn’t financially prudent for you.
Credit cards with no annual fees also have perks
Annual fee credit cards boast more perks, in general, than their no annual fee counterparts. However, credit cards with no annual fee can also provide you with good perks - without the yearly cost.
For example, the HSBC Revolution Card has no annual fee but offers decent rewards. The card lets you earn four miles for every SGD 1 you spend on payments that are online and contactless. All other types of spend earn 0.4 miles for every SGD 1. Additionally, the card lets you save on petrol at Caltex and Shell.
Alternatives: No annual fee credit cards
Here are some alternatives to credit fees with annual fees. They are either credit cards with no annual fees, or credit cards with annual fee waiver requirements that are relatively easy to meet.
OCBC 365 Card: Best no fee cashback overall
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OCBC 365 Card is absolutely the best option on the market. Not only is there a fee waiver with just $10,000 annual spend, there also aren’t any merchant restrictions–two benefits you won’t find with OCBC 365 Card’s key competitor. Cardholders earn 6 per cent on dining & online food delivery and 3 per cent on groceries, land transport (including Grab), online travel bookings, and even recurring electricity & telco bills–compared to the competitor’s 1 per cent rebate on bills, capped at $1/month. If you want a no-fee everyday card that rewards your essential spend,is absolutely the best option on the market. Not only is there a fee waiver with just $10,000 annual spend, there also aren’t any merchant restrictions–two benefits you won’t find with OCBC 365 Card’s key competitor. Cardholders earn 6 per cent on dining & online food delivery and 3 per cent on groceries, land transport (including Grab), online travel bookings, and even recurring electricity & telco bills–compared to the competitor’s 1 per cent rebate on bills, capped at $1/month. In order to access these rates, cardholders must spend $800/month, which is aligned with market norms. Cardholders can also earn up to $80/month, which is fairly high. Ultimately, if you’re buying essentials for your family or simply want no-fee rewards for your daily spend, OCBC 365 is the only option with both a waiver and no merchant restrictions, and it’s high rates will quickly maximise your earnings. |
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OCBC 365 Card is absolutely the best option on the market. Not only is there a fee waiver with just $10,000 annual spend, there also aren’t any merchant restrictions–two benefits you won’t find with OCBC 365 Card’s key competitor. Cardholders earn 6 per cent on dining & online food delivery and 3 per cent on groceries, land transport (including Grab), online travel bookings, and even recurring electricity & telco bills–compared to the competitor’s 1 per cent rebate on bills, capped at $1/month. If you want a no-fee everyday card that rewards your essential spend,is absolutely the best option on the market. Not only is there a fee waiver with just $10,000 annual spend, there also aren’t any merchant restrictions–two benefits you won’t find with OCBC 365 Card’s key competitor. Cardholders earn 6 per cent on dining & online food delivery and 3 per cent on groceries, land transport (including Grab), online travel bookings, and even recurring electricity & telco bills–compared to the competitor’s 1 per cent rebate on bills, capped at $1/month. In order to access these rates, cardholders must spend $800/month, which is aligned with market norms. Cardholders can also earn up to $80/month, which is fairly high. Ultimately, if you’re buying essentials for your family or simply want no-fee rewards for your daily spend, OCBC 365 is the only option with both a waiver and no merchant restrictions, and it’s high rates will quickly maximise your earnings. |
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DBS Altitude Visa: Best miles card with affordable perks
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DBS Altitude Visa Card stands out by offering more travel perks than any other miles card with a fee-waiver. Cardholders earn respectable rewards rates at 1.2 miles per $1 local spend, two miles overseas, three miles on online travel bookings, and miles earned never expire. However, unlike other comparable cards, DBS Altitude Card offers free travel insurance, two lounge visits/year, golfing privileges throughout SE Asia, dining privileges with Visa Foodie Trail & more. In fact, these perks are more extensive than some travel cards with $250+ fees. Stands out by offering more travel perks than any other miles card with a fee-waiver. Cardholders earn respectable rewards rates at 1.2 miles per $1 local spend, two miles overseas, three miles on online travel bookings, and miles earned never expire. However, unlike other comparable cards, DBS Altitude Card offers free travel insurance, two lounge visits/year, golfing privileges throughout SE Asia, dining privileges with Visa Foodie Trail & more. In fact, these perks are more extensive than some travel cards with $250+ fees. To receive a fee-waiver, cardholders need to spend $25,000 annually, so DBS Altitude Card is best for average spenders (especially those who frequently travel). If you want to avoid the high fees of pricier travel cards, but still want to enjoy luxury perks, DBS Altitude Card is perfect for you. |
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Stands out by offering more travel perks than any other miles card with a fee-waiver. Cardholders earn respectable rewards rates at 1.2 miles per $1 local spend, two miles overseas, three miles on online travel bookings, and miles earned never expire. However, unlike other comparable cards, DBS Altitude Card offers free travel insurance, two lounge visits/year, golfing privileges throughout SE Asia, dining privileges with Visa Foodie Trail & more. In fact, these perks are more extensive than some travel cards with S$250+ fees. To receive a fee-waiver, cardholders need to spend $25,000 annually, so DBS Altitude Card is best for average spenders (especially those who frequently travel). If you want to avoid the high fees of pricier travel cards, but still want to enjoy luxury perks, DBS Altitude Card is perfect for you. |
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OCBC Frank Card: Best for young online shoppers
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OCBC Frank Card. Unlike its competitor cards (some of which have an $800+ minimum requirement), OCBC Frank allows cardholders to access its higher rates after just $600 spend. Consumers earn 6 per cent rebate on FX, online, and mobile contactless spend. Additionally, this card offers 0.3 per cent on all other purchases. Earnings are a respectable $75/month ($25/FX & mobile contactless, $25/online, and $25/general). Young adults with lower monthly spend are most likely to maximise their cashback with. Unlike its competitor cards (some of which have an $800+ minimum requirement), OCBC Frank allows cardholders to access its higher rates after just $600 spend. Consumers earn 6 per cent rebate on FX, online, and mobile contactless spend. Additionally, this card offers 0.3 per cent on all other purchases. Earnings are a respectable $75/month ($25/FX & mobile contactless, $25/online, and $25/general). OCBC Frank Card also stands apart from its closest competitor by offering a fee-waiver. With just $10,000 annual spend, cardholders are exempt from the $80 fee, which itself is fairly low. If you’re looking for a card that rewards online shopping and mobile contactless purchases without a lofty spend requirement, OCBC Frank Card is the best and most affordable option. |
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Young adults with lower monthly spend are most likely to maximise their cashback with. Unlike its competitor cards (some of which have an $800+ minimum requirement), OCBC Frank allows cardholders to access its higher rates after just $600 spend. Consumers earn 6 per cent rebate on FX, online, and mobile contactless spend. Additionally, this card offers 0.3 per cent on all other purchases. Earnings are a respectable $75/month ($25/FX & mobile contactless, $25/online, and $25/general). OCBC Frank Card also stands apart from its closest competitor by offering a fee-waiver. With just $10,000 annual spend, cardholders are exempt from the $80 fee, which itself is fairly low. If you’re looking for a card that rewards online shopping and mobile contactless purchases without a lofty spend requirement, OCBC Frank Card is the best and most affordable option. |
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Conclusion
To sum up, annual fee credit cards are worth it if you value the various perks and benefits they afford you - or at least value them more than the cost associated with the annual fee, or the spending required to waive it (if applicable). If not, you can check out our page on the best no annual fee credit cards in Singapore for good alternatives.
This article was first published in ValueChampion.