Differences Between the Australian and Singaporean Credit Card Markets

Last Updated: 20 Aug 2018 – minor wording changes and added a reference to the CIMB Platinum Mastercard and YouTrip – the closest I’ve found to a Credit Card with no overseas transaction fees.

This is quite a specific topic and probably only relevant to a specific subset of people. How many (tens of?) thousands of people have done the jump between Singapore and Australia, and out of those people, how many people actually care enough about the differences between the Credit Card markets to feel interested enough to read up on it?

I’m gonna write about it anyway, because I feel like it.

For some of my more regular readers, you would be aware that I recently made the hop from down under to “the little red dot”. Here’s what I’ve noticed in terms of the differences between the Credit Card market in Australia and Singapore.

• Earning points is not necessarly in 0.5 point increments per dollar, unlike Australia (e.g. the earn rates of cards can be 1.2 miles per point)
  • In Australia, it’s almost always “earn 1pt/$”, or “earn 1.5pt/$”.

• Earning cashback is far more common in Singapore than in Australia. In Australia, the most prominent cashback player was ING, and then we had Citibank, MEBank, HSBC and Commonwealth Bank all doing it at different points in time for limited periods of time (3-6 months). Pretty much every bank in Singapore has a combination of both miles and cashback Credit Cards
• In Australia, cashback was earned on all expenditure at a flat rate. In Singapore, cashback is divided into different categories, e.g. dining, public transport, petrol, groceries, air travel, hotels – similar to what I’ve noticed in Malaysia. I’m going to guess this is a South East Asian thing!
  • For this reason, it’s not uncommon for people to have multiple cards covering different cashback categories
  • This also makes it very admin-intensive for you on a personal level to try and remember what cards get you what amount of cashback at which places. You’ll also need to consider minimum spend and whether there are any monthly or quarterly caps!
  • Banks “cover” themselves from “Credit Card sluts”, or simply cover their financial downside by implementing minimum spend thresholds on monthly expenditure to be eligible for cashback, and cashback is also capped on either a monthly or quarterly basis.
  • Notice what I said: there are minimum monthly spend requirements. It can get a little tedious to manage.
• Most banks charge “transfer fees” for when you do eventually wish to transfer your points/miles from the banks own proprietary rewards system to the Frequent Flyer program of your choosing
• Direct-earn cards (cards that earn direct into Qantas Frequent Flyer or Velocity) are not as common here as they are in Australia – both a good and bad thing.
• The “push” for Credit Cards is quite clear to see – you’ll often see salespeople trying to sell you Credit Cards in shopping malls

• There are no Credit Cards that waive foreign transaction fees, which contrasts the situation we have in Australia where we have quite a number of choices
  • This is “offset” by some cards offering increased earn rates on spend in foreign currency, which can actually sometimes be worth it
  • These types of cards exist in Australia too, but the earn rates often still don’t make paying the foreign transaction fee worthwhile.
  • [UPDATE] 20 Aug 2018: I found the CIMB Platinum Mastercard. There’s no “admin fee” on foreign transaction charges, but under “Fees & Charges”, there is a 1% fee for “all foreign currency and cross-border transactions levied by Mastercard and Visa”.
  • [UPDATE] 20 Aug 2018: I’ve also stumbled upon YouTrip which is a prepaid card with no foreign transaction fees. However, this is still not quite a Credit Card. This is probably the best option I’ve found so far for overseas expenditure with no additional fees.

• KrisFlyer is extremely dominant in Singapore, but hardly surprising when you consider that even amongst the “point nerds” in Australia, KrisFlyer is generally considered one of the better point currencies
• Qantas Frequent Flyer lack presence and are very insignificant. There’s only one transfer partner in Singapore, and I would be very curious to know what proportion of customers have ever made a transfer to Qantas Frequent Flyer
• Due to KrisFlyer’s dominance and their partnership with Velocity, it means it’s actually significantly easier to indirctly earn Velocity points in Singapore than it is Qantas.
  • Keep in mind the conversion rate between KrisFlyer to Velocity is 1:35:1 (from the transferring program to the receiving program) and it doesn’t make much sense (value-wise) to do this conversion from KrisFlyer to Velocity.

• American Express cards are even less accepted in Singapore than they are in Australia
• American Express cards are nowhere near as “valuable” here as they are in Australia, from a points-earning point of view and a lack of American Express-specific “spend $X and get $Y cashback” type of promotions
• Anecdotally, I’ve been told annual fees on Credit Cards are “just for show”. To be more precise, annual fees can be readily waived. In fact, when you call up your bank’s Customer Service, one of the options is “press X to waive your annual fee”!
  • I have not tested this yet, but I’m also under the impression that if you just hold a card and never use it, it might be a bit harder to have your annual fee waived. Thus far, it’s been described to me that pretty much all cards can have their annual fees waived except the most expensive ones.
• Sign-up bonuses for miles/points in Singapore are much lower than in Australia.
  • In Australia the largest bonuses tend to be around 70-120k points (often Qantas or Velocity) for new sign-ups upon meeting some kind of criteria.
  • In Singapore, the highest I’ve seen so far is about 40k in KrisFlyer points.
    • Even then, the criteria is typically more than just “spend $3000 or more within 3 months”. It’s more like “spend $1000 within 3 months, add a supplementary card and spend $200 on the supplementary card within 3 months. Oh, also excludes EZ-Link top ups”
• On the other hand, you can often get sign-up bonuses where you get a fixed amount of cash (e.g. $80, $120, $160). In Australia, whilst these are offered, the sheer magnitude of bonus points awarded often means the cash incentives are less attractive.
  • Alternatively, they sometimes offer other goodies, such as a suitcase.
• Restaurants often have discounts if paying with cards from specific banks, e.g. “Pay with Citibank and get 15% off your bill”
  • It’s for this reason that if you wish to “cover all your bases” and ensure you get discounts everywhere, it’s not uncommon for people to have 5-8 cards!
• Annual fees are charged at strange figures, e.g. $188.75 (as opposed to nice rounded figures like $175, $200)
• Expenditure on Credit Cards can affect the amount of interest you earn on the money sitting in your bank account, assuming your money sits in a bank account issued by the same financial institution as your Credit Card.
  • As a simple example, the DBS Multiplier account requires some sort of Credit Card spend on a linked Credit Card for you to be eligible for a higher interest rate.
• There are some interesting partnerships, branding and marketing that banks have, e.g. FC Barcelona, “Lady’s cards”, YOLO card
• There are Credit Cards with extreme annual fees and income requirements. I’m talking about $4000 annual fees and $500k annual income requirements

Which market is better? Hard to say.. I’ll make a dedicated post about that in the future.

Here’s what I plan to post about in the future:

• The Difference Between Bank Accounts in Singapore and Australia
• How to Setup your Bank Account in Singapore (for Foreigners)
• How to Setup your Credit Card(s) in Singapore (for Foreigners)
• Which Market is Better for Credit Cards – Australia or Singapore?
• Which Market is Better for Bank Accounts – Australia or Singapore?

Feel free to ask any questions you may have on the topic!