Understanding Credit Cards: Interest-Free Period, Cash Advances, and Minimum Payments

Credit cards charge up to 29% interest p.a. — do you know exactly how yours works? Understanding the key features of credit cards can help you manage your finances better.

Key Features of Credit Cards

Credit cards come with several features that affect how you borrow and repay. Paying only the minimum sum due means the rest of your balance will incur interest charges.

To apply for a credit card, you must meet the bank’s eligibility requirements, including a minimum annual income of $30,000. Even if you meet the eligibility criteria, you will also be subject to the rules on unsecured credit limits set by the Monetary Authority of Singapore.

Understanding Credit Card Interest and Charges

Credit card companies charge interest on the outstanding balance if you do not pay the full amount by the due date. It is also helpful to know about other charges such as fees for cash advances, which typically incur interest from the day you withdraw the money.