Should you get a cashback credit card to curb inflation in Singapore?

From a strong global recovery following the Covid-19 pandemic to the ongoing conflict between Russia and Ukraine, it is no surprise that Singapore is experiencing inflation. Core inflation in Singapore is projected to average three per cent in 2022, a nine-year high. While inflation may be beyond your control, find out how cashback credit cards can help you reduce the damage caused by inflation.

The mechanics of a cashback credit card explained

As its name suggests, a cashback credit card is a credit card that refunds you a percentage of your spending. For instance, if your card offers a cashback rate of five per cent, spending $100 will earn you a $5 credit on your card. While this may not seem like a lot, your cashback earnings can quickly accumulate, especially if you are a big spender.

Depending on the bank, cardholders may receive the cashback credit either through a direct deposit into the linked bank account or a statement credit reducing the next month’s bill. The great thing about earning cashback credit is that it can be used to pay down your credit card statement balance, offset your next bill, or be used to redeem a gift card.

Having said that, there are requirements to meet in order to redeem your cashback rewards. For some cards, there is a minimum spend requirement and for banks, they require your bank account to be in good standing.

Types of cashback credit cards

Some cashback credit cards will credit your account with cashback for certain purchases such as dining or travel, while others offer cashback across all your spending. Thus, you should choose a card based on your spending pattern.

Put simply, there are a total of three different types of cashback credit cards. The three include flat rate cashback credit cards, rotating bonus category cashback credit cards, and tiered rate cashback credit cards.

Flat rate cashback credit cards

Such cards offer the same cashback across all expenditures. An example of a flat rate cashback credit card would be the Standard Chartered Unlimited cashback card which offers unlimited cashback 1.5 per cent cashback on all spend.

Rotating bonus category cashback credit cards

These cards provide different cashback rates for different categories of purchases. For instance, grocery purchases may earn you one per cent cashback whereas your petrol spending will earn you five per cent cashback.

To put things into perspective, we will look at the OCBC 365 card.

Spending category	Rebate
Dining (Local, overseas, and online food delivery)	6 per cent
Groceries (local, overseas, and online)	3 per cent
Transport	3 per cent
Utilities (Telecommunications and electricity bills)	3 per cent
Travel	3 per cent
Petrol	5 per cent
All other categories	3 per cent

As seen from above, the OCBC 365 card is a great option for the average spender as it offers competitive rates across all categories.

Tiered rate cashback credit cards

Tiered rate cashback cards offer different levels of cashback depending on the annual spending. To better understand how such cards work, we can take a look at the UOB One card.

To earn a five per cent rebate on general spending, a minimum spend of $2,000 with a minimum of five transactions per month is required. To earn 3.33 per cent, a minimum spend of $500 is required.

How cashback credit cards help curb rising inflation

During times of inflation, your transport, grocery, and every other bill will inevitably increase. If you are already feeling the pinch from inflation, perhaps it is time to consider getting a cashback credit card to reduce your financial damage.

With cashback credit cards, as the amount you spend increases, the cashback earned increases in tandem. As such, you will be able to maximise your savings. While it definitely will not lower your overall expenditure to what it previously was pre-inflation, the cashback earned is still a substantial amount that can help you offset some of those higher bills.

The good thing about cashback credit cards is that you will be able to get rewarded for spending you were already planning to make. Thus, to increase your cashback earnings, you can consider owning a rotating bonus category credit card.

Using a rotating bonus category credit card when you are purchasing items that fall into one of the categories covered will earn you bonus cashback, reducing the effects of inflation.

Making the most of your cashback credit card in times of inflation

Having understood the benefits of a cashback credit card, here are pointers to keep in mind when looking for the best cashback credit card that suits your lifestyle in Singapore!

Understand your spending patterns

The key to capitalising on cashback credit cards is to understand your spending patterns. Analysing the categories on which you spend the most will help you find a cashback credit card that aligns with your needs and lifestyle.

For instance, if you do not own a car, there is really no reason why you should own a cashback credit card which only offers bonus cashback for petrol. In a similar vein, if you are a low-spender, you should avoid cashback credit cards that have a high minimum spend requirement.

To help you find the best cashback credit cards that fit your lifestyle, we have recommended cards to help you earn the best cashback for petrol, dining, online shopping, low spenders, affluent spenders, and everyday household spend.

OCBC 365 card: No-fee cashback on petrol

While OCBC 365 card offers great cashback on everyday essentials, unlike its competitors, it has a relatively high cashback cap ($80/month), a simple rewards structure and fewer merchant restrictions.

• Pros
  • Six per cent rebate on dining, three per cent on groceries, transport, recurring bills, online travel
  • Fee waiver with $10,000 annual spend
  • Up to 22.1 per cent fuel savings at Caltex, 20.2 per cent at Esso

• Cons
  • 0.3 per cent rebate on general spend
  • High $800 minimum spend requirement

• Annual fee: $192.60 (automatic annual fee waiver with min annual spend of $10,000)
• 6 per cent rebate on local, overseas dining and online food delivery
• 3 per cent rebate on local, overseas and online groceries
• 3 per cent rebate on land transport, utilities (telco and electricity bills) and online travel
• 5 per cent rebate on petrol (up to 22.1 per cent fuel savings at Caltex and 20.2 per cent with Esso)
• 0.3 per cent cashback on all other spend
• Visa Concierge services

OCBC 365 card offers a great no-fee way to earn cashback on daily purchases. Cardholders earn up to six per cent rebates on dining and three per cent on groceries, land transport, online travel bookings and recurring electricity and telco bills.

READ ALSO: Which corporate credit card should small businesses use for their operations?

There are no merchant restrictions (unlike competitors) and rewards are capped at a lofty $80/month. Another perk is that cardholders can enjoy a fee waiver with $10,000 annual spend — that's just $833/month. This spend level also meets minimum spend requirements, ensuring top rewards rates. Overall, OCBC 365 Card is definitely one of the best everyday options with a fee-waiver.

offers a great no-fee way to earn cashback on daily purchases. Cardholders earn up to six per cent rebates on dining and three per cent on groceries, land transport, online travel bookings and recurring electricity and telco bills. There are no merchant restrictions (unlike competitors) and rewards are capped at a lofty $80/month.

Another perk is that cardholders can enjoy a fee waiver with $10,000 annual spend — that's just $833/month. This spend level also meets minimum spend requirements, ensuring top rewards rates. Overall, OCBC 365 card is definitely one of the best everyday options with a fee-waiver.

UOB One credit card: High flat rebate for dining

• Stand-out: Up to 10 per cent rebate on all spend, $300/quarter
• Annual fee: $192.6, one-year waiver
• 5 per cent rebate on general spend, up to $300/quarter ($2,000 min spend)
• Up to 10 per cent on Grab and select UOB travel, 6 per cent on utilities bills
• 3.33 per cent rebate, up to $100/quarter ($1,000 min spend)
• 3.33 per cent rebate, up to $50/quarter ($500 min spend)
• UOB SMART$ rebate programme

UOB One card. Cardholders earn based on a tiered rebate system, based on their minimum spend within a quarter. Those with consistent $2,000/month spend earn five per cent general cashback — including for dining locally and overseas — up to $300/quarter.

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This rate is boosted to 10 per cent for Grab transactions and select UOB Travel spend and six per cent for recurring utilities bills. Lower spenders earn 3.33 per cent cashback up to $50 or $100/quarter (depending on spend level).

If you regularly spend at least $2,000/month, you could potentially earn $1,200+/year with. Cardholders earn based on a tiered rebate system, based on their minimum spend within a quarter. Those with consistent $2,000/month spend earn five per cent general cashback — including for dining locally and overseas — up to $300/quarter.

This rate is boosted to 10 per cent for Grab transactions and select UOB Travel spend and six per cent for recurring utilities bills. Lower spenders earn 3.33 per cent cashback up to $50 or $100/quarter (depending on spend level).

UOB One Card’s high flat rebate is great for earning on dining, but the card also comes with a few extra food-related perks. Cardholders earn up to an extra 10 per cent rebate through the UOB SMART$ Programme. Every transaction with select vendors like BreadTalk, Cold Storage and more earns one SMART$ (equal to $1), which can be used to offset future purchases.

Even better, this spend also counts towards the monthly minimum. Another perk is access to Epicurean Delights via Dining Advisor, which offers discounts and freebies with restaurants, FoodPanda, Deliveroo and more. Ultimately, if you want top rebates on all of your spend–including when you dine out — UOB card is the best option for you.

UOB Evol card: Rebates on contactless and online spend

In addition to being the first bio-sourced card in the region offering discounts on eco-friendly merchants, UOB Evol card offers young spender eight per cent cashback on all online and contactless spend.

• Pros
  • Easy to use cashback card
  • Great for budgets of at least $600/month
  • Rewards all online and mobile spend

• Cons
  • Lacks cashback on essentials (i.e. groceries, bills)
  • Cashback capped at $60/month

• Annual fee: $192.60 (first year-waived)
• 8 per cent cashback on online and mobile contactless spend
• 0.3 per cent cashback on all other spend
• $600 min spend, $60 cashback cap
• Southeast Asia’s first bio-sourced card

UOB Evol Card offers an excellent way to earn cashback on a wide variety of spend. Cardholders who reach the $600 minimum spend requirement earn eight per cent cashback on two broad categories: Any purchases made online and any purchases made with contactless pay apps such as Apple Pay and Google Pay.

This versatility makes UOB Evol card a great choice for just about any type of spend, including entertainment expenses. Cardholders are able to earn up to $60 in monthly rebates, split across the three categories of online, contactless and general spend. An annual fee of $192.60 is waived in the first year, and can be avoided later on by making at least three transactions with your UOB Evol Card every month for 12 months.

Maybank Platinum Visa: Top rebates for small budgets

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Maybank Platinum Visa rewards consistent spenders. Those who spend at least $300/month for a quarter will earn up to 3.33 per cent cash rebate on all local and foreign currency spend (cashback capped at $100 per quarter).

• Pros
  • Great starter card for young adults
  • Good fit for budgets between $300 and $500/month
  • $80 annual fee

• Cons
  • Few extra perks
  • Doesn't award specialised spend (ie dining, shopping)

• Annual fee: $80 (three years fee waiver)
• Subsequently quarterly service fee is waived with card use at least one time per quarter
• Up to 3.33 per cent on all local and foreign currency spend
• $30 quarterly rebate with at least $300 monthly spend
• $100 quarterly rebate with at least $1,000 monthly spend
• Free travel insurance

If you spend between $300 to $500 monthly, Maybank Platinum Visa card is the best way to maximise cashback on nearly all of your purchases. Most rebate cards require $500+ minimum spend, but consumers with Maybank Platinum Visa Card receive $30/quarter with just $300/month spend.

That adds up to $120 annual earnings with just $1,200 annual spend — far more than you could earn with the 0.3 per cent base rate offered by competitors.

Consumers who spend $1,000/month can earn $100/quarter, but it’s worth mentioning that competitor cards offer better rates at this spend level. Nonetheless, Maybank Platinum Visa card is an exceptional option for lower spenders because it offers access to high rates with minimal spend. Even better, quarterly fees are waived simply with card use, making Maybank Platinum Visa Card essentially maintenance-free.

HSBC Advance card: Best for affluent advance customers

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HSBC Advance Card offers 3.5 per cent boosted cashback on min $2,000/month spend and meeting additional requirements, making it a great cashback card for wealthy customers.

• Pros
  • Great fit for budgets between $2,000 and $8,000/month
  • Easy, low-maintenance cashback

• Cons
  • Not suitable for average or below-average spend
  • Lacks travel perks
  • Doesn't fit highly specialised spend behaviors

• Annual fee: $192.60 (first year- waived)
• 2.5 per cent base cashback on purchases of $2,000 and above
• 1 per cent bonus cashback when deposit min $2,000 per month
• Up to 16 per cent fuel savings with Caltex and 14 per cent petrol discount with Shell
• Visa Concierge and e-Commerce purchase protection

HSBC Advance card is one of the best flat rebate cards on the market for higher spenders with no minimum spend requirements. With a recent update to the HSBC Advance credit card cashback programme, all customers regardless of whether they have an HSBC Advance banking relationship or not can earn the same cashback for their spend.

READ ALSO: Should you own a credit card in Singapore?

Base cashback is at 1.5 per cent for $2,000 and below, and 2.5 per cent for spend above $2,000 with cashback capped at $70 per month.

Customers can also earn an additional one per cent bonus cashback when they deposit a minimum of $2,000 per month in fresh funds to their HSBC Everyday Global Account and charge five transactions to their HSBC Advance credit card monthly.

When these qualifying criteria are met, you can earn a total cashback of 3.5 per cent with a monthly cap of $300, which is $3,600 savings per year — the highest earning potential for a capped card on the market!

Ultimately, HSBC Advance card stands out because it allows Advance customers to earn more cashback per month than with most competitors (who frequently limit rewards to $100/month) and provides a higher flat rate than most unlimited cards.

Maybank Family & Friends MasterCard: Best for everyday household spend

• Stand-Out: Up to $125/month with just $800/month spend
• Foreigners are eligible for this promotion: Apply for a new Maybank credit card an charge a minimum of $350 for each of the first two consecutive months upon approval
• Subsequent approved applicants will receive $100 cash credit. Terms and conditions apply.
• Annual fee: $180, 3-year waiver then with $12k annual spend
• Up to 8 per cent rebate on fast food and food delivery, groceries, transport, petrol and online TV streaming in Singapore and Malaysia, after $800 min spend (5 per cent rebate with $500 min spend)
• 0.3 per cent rebate all other spend

Maybank Family & Friends card offers a great way for average consumers — and even lower spenders — to maximise spend in Singapore and Malaysia. Cardholders earn five per cent rebate on fast food and food delivery, groceries, transport, petrol and data communications/online TV streaming (and more) after just $500 spend.

Those who spend $800 earn eight per cent cashback. Rebates aren't restricted by vendors for the most part, but are limited to spend in Singapore and Malaysia. Overseas purchases earn just 0.3 per cent cashback.

Maybank Family & Friends Cardholders also have access to special lifestyle and dining privileges. These include discounts of up to 20 per cent at all kinds of establishments, from bakeries to hotel restaurants and beyond. In addition, Maybank F&F card’s $180 fee is waived three years, then with just $12,000 annual spend.

Because of the low minimums and fee-waiver, this is a great card for lower spenders; the high rewards rates on fast food and restaurant discounts make it an excellent option for frequent diners.

Take note of the terms and conditions of the card

Apart from understanding your spending habits and patterns, it is also imperative to check the terms and conditions of your card. These include the annual fee, interest rates, minimum spend requirements, and cashback limit.

Cost of owning a cashback credit card: Annual fee and interest rate

Defined as the yearly amount charged by banks for the use of their credit cards, most cashback credit cards often carry a high annual fee. However, many banks now offer fee waivers for the first few years of holding a card. For subsequent years, some banks offer fee waivers for customers whose annual spend exceeds an amount specified by the bank which typically starts from $10,000.

The annual fee and interest rates contribute to the cost of owning a cashback credit card. Such costs are crucial when deciding whether getting a cashback credit card will be worth it in times of inflation. Should the cost exceed the cashback you will be receiving, owning a cashback credit card may not be as worth it for you in curbing inflation. As such, it is important to plan ahead and crunch the numbers before you decide to own a cashback credit card.

READ ALSO: Are annual fee credit cards in Singapore worth it?

For those looking for a low-maintenance card with fee waivers that are relatively easier to get, you can consider the HSBC Visa Platinum.

• Promo: Stand to enjoy AirPods Gen 3 or S$250 Cash with minimum spend of $500 within 30 days of card approval

HSBC Visa Platinum offers five per cent cashback on family spend such as dining, groceries and fuel.

• Pros
  • Great local dining and groceries rewards
  • Suitable for moderate budgets ($1,600+/month)
  • Cashback and miles rewards

• Cons
  • Limited miles and travel perks
  • Not suitable for frequent online shoppers

• Annual fee: $192.60 (waived for two years)
• 5 per cent cashback on local dining, groceries and petrol (up to $250/quarter)
• 0.4 miles per $1 general spend, unlimited
• Up to 21 per cent fuel savings with Caltex, Shell (including 5 per cent card rebate)

HSBC Visa Platinum Card is not only affordable (its $180 fee is waived two years, then with each $12,500 annual spend), it also rewards consumers with both miles and cashback — which is rare in the current market.

Cardholders earn 0.4 miles per $1 general spend and five per cent rebate on local dining, groceries, and petrol. These categories account for the majority of an average consumer’s monthly budget, so most people can take advantage of this high cashback rate and maximise their earnings.

It’s worth noting, however, that in order to earn five per cent cash rebate consumers must spend at least $600/month — every month — per quarter. Lower or inconsistent spenders earn just 0.4 miles per $1 on all spend. Also, earnings are capped at $250/quarter, or about $83/month.

However, spending $1,667/month on food and petrol not only maxes out this reward, but also exempts cardholders from the annual fee. HSBC Visa Platinum card is not only unique, it also offers great earning potential.

The amount you have to spend to be eligible for cashback

Especially important for low spenders, some cashback credit cards require cardholders to spend an amount before being eligible for the cashback offered. Thus, do take this into account when choosing a cashback credit card. For those looking for a cashback credit card without minimum spend requirements, you can consider the Citi Cash Back+ card.

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Citi Cash Back+ Card offers one of the highest unlimited cashback rates on the market — 1.6 per cent, on all spend without restrictions, boosted to 4.5 per cent for the first three months since card approval.

• Pros
  • Affluent consumers spending $7,000/month
  • People interested in an easy-to-use flat rate card
  • Those looking to avoid spend requirements or rewards caps
• Cons
  • Average or lower spenders looking to maximise rewards
  • Those with specialised spend (i.e. dining, shopping)
  • Consumer looking to avoid an annual fee

• Annual fee: $192.60 (first year — waived)
• 1.6 per cent cashback on all local and overseas spend
• No minimum spend
• No cap on cashback
• Welcome gift of 4.5 per cent cashback on up to $5,000 in first 3 months

Individuals spending about $7,000+/month can truly maximise their earnings with. Cardholders earn an unlimited 1.6 per cent cashback on all spend, which is higher than the 1.5per cent offered by most competitors. In most cases, consumers with very large budgets end up feeling restricted by typical capped rewards cards. With Citi Cash Back+, however, affluent cardholders can continue to earn on all of their spend, up to their full rewards potential.

READ ALSO: Latest petrol prices in Singapore and all the petrol credit card discounts

The maximum cashback you are entitled to

Apart from the requirements needed to be eligible for the cashback, you should also take note of the cashback limit. Credit cards with high or unlimited rewards caps can increase affluent consumers' rewards potential.

For those looking for unlimited cashback credit cards, the Standard Chartered Unlimited cashback card is a great choice.

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Standard Chartered Unlimited Cashback offers customers 1.5 per cent cashback on all spend, boosted to five per cent for the first three months since card approval.

• Pros
  • Unlimited 1.5 per cent flat cashback
  • No minimum spend requirement
  • Up to 21 per cent fuel savings with Caltex

• Cons
  • No boosted rates in specific categories
  • No travel perks

• Annual fee: $192.60 (waived for two years)
• Unlimited 1.5 per cent cashback on all spend
• Caltex petrol discounts up to 21 per cent

Standard Chartered Unlimited cashback card not only rewards 1.5 per cent cashback on all spend, but also offers notably high petrol savings rates. Cardholders earn up to 21 per cent fuel savings with Caltex. Other perks include dining privileges and discounts.

It’s worth pointing out that unlimited cards are best for high spenders because there’s no earnings cap. SC Unlimited cashback cardholders would need to spend at least $7,000+/month for rewards to become competitive. This is simply because alternative cards that do have caps tend to have higher rewards rates.

It is time for you to decide

In times when the prices of nearly everything are rising, owning a cashback credit card may reduce your financial stress. However, while it may sound enticing, do remember to take note of your lifestyle and the terms and conditions of the cards before settling on one.

READ ALSO: Your guide to credit card applications in Singapore

This article was first published in ValueChampion.