Here’s how you can avoid paying annual fees for your credit cards in Singapore

There are two camps when it comes to paying annual fees for your credit cards. Some believe that the fees are worth paying for if your benefits earned far outweigh the cost of the card involved.

For others, the annual fees of the credit card are not worth paying for as they believe that you should be enjoying the benefits of the card without any penalty, especially when there are fee waivers involved.

If annual fees are something you want to avoid paying for, here are 5 things you can do.

#1 ASK FOR A WAIVER

Commonly, asking for a fee waiver for your credit card leverages on your loyalty with the card and how you have been spending it.

For most banks, the option for a fee-waiver is usually conditional depending on a customer's payment history.

If you have been a loyal customer with a high credit spend, most banks offer to extend your period of fee-waiver on the basis of retaining a loyal and high-spending customer.

#2 APPLY FOR NO-FEE CARDS ONLY

[[nid:477445]]

Some credit cards like the UOB One card, or the Standard Chartered Unlimited Credit Card, offer a standard fee waiver for the first or first 2 years.

When applying for a credit card, it's important to compare credit card offers among financial comparison sites and look for the card that suits your spending habits best.

Alternatively, you can consider downgrading or switching your card in use. Some cards may allow you to downgrade to an alternative no annual fee credit card or a card with a lower annual fee.

This allows you to retain the same account history and credit line, although you will enjoy fewer rewards and benefits.

#3 CANCEL YOUR CARD

Some cardholders choose to cancel a credit card before the period of fee-waiver ends. However, this comes with a few caveats.

Cancelling a credit card may hurt your credit especially if its a credit card that you've held the longest, especially if you have been diligently paying your dues promptly and in full. A poor credit score may hurt your chances of taking out a home loan, education loan or car loan.

Before making this move though, remember to fully redeem any rewards and cash rebates as they will be taken away once you cancel your card.

#4 USE YOUR REWARDS TO OFFSET FEES

[[nid:479372]]

Some credit cards allow you to pay your fees using your rewards. If you have earned a certain amount of cash rebates, you can apply it to your statement credit which would cover the annual fees if you have chalked up enough rewards.

Sometimes too, financial comparison sites also add to exclusive incentives that may offset the costs of the annual fees.

For instance, you may find that paying the annual fee of $192.60 in the application for a Citi PremierMiles Visa Card is worthwhile because of the exclusive 37,330 welcome miles bonus and $200 cash incentive via PayNow.

#5 HIT THE MINIMUM SPEND REQUIRED

Some banks implement an automatic fee waiver based on your account activity, payment history or length of time as a customer.

This is ideal if you have a clear understanding of how much and what you spend on, and if the credit card of choices matches your spending habits.

For instance, the annual fees of the OCBC 365 credit card is automatically waived if you hit a minimum spend of $10,000 each year.

NOT A COST IF PERKS ARE SIGNIFICANT AND EXCLUSIVE

Ultimately, a credit card's annual fees may just be a small and negligible cost if the value of its rewards are great.

Additionally, it is a bonus if the rewards can easily be earned according to your existing spending habits. Annual fees quickly add up and become hefty if your credit card is underutilised, and the rewards earned cannot cover the cost of the fees.

This article was first published in Dollars and Sense.